text: [House Hearing, 106 Congress] [From the U.S. Government Printing Office] LESSONS FROM THE LABORATORIES OF DEMOCRACY: ENVIRONMENTAL INNOVATION IN THE STATES ======================================================================= HEARING before the SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH, NATURAL RESOURCES, AND REGULATORY AFFAIRS of the COMMITTEE ON GOVERNMENT REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTH CONGRESS SECOND SESSION __________ SEPTEMBER 13, 2000 __________ Serial No. 106-263 __________ Printed for the use of the Committee on Government Reform Available via the World Wide Web: http://www.gpo.gov/congress/house http://www.house.gov/reform U.S. GOVERNMENT PRINTING OFFICE 74-705 WASHINGTON : 2001 ____________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpr.gov Phone: toll free (866) 512-1800; (202) 512�091800 Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001 COMMITTEE ON GOVERNMENT REFORM DAN BURTON, Indiana, Chairman BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California CONSTANCE A. MORELLA, Maryland TOM LANTOS, California CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania JOHN L. MICA, Florida PATSY T. MINK, Hawaii THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington, MARK E. SOUDER, Indiana DC JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio Carolina ROD R. BLAGOJEVICH, Illinois BOB BARR, Georgia DANNY K. DAVIS, Illinois DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts ASA HUTCHINSON, Arkansas JIM TURNER, Texas LEE TERRY, Nebraska THOMAS H. ALLEN, Maine JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois DOUG OSE, California ------ PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont HELEN CHENOWETH-HAGE, Idaho (Independent) DAVID VITTER, Louisiana Kevin Binger, Staff Director Daniel R. Moll, Deputy Staff Director James C. Wilson, Chief Counsel Robert A. Briggs, Clerk Phil Schiliro, Minority Staff Director ------ Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs DAVID M. McINTOSH, Indiana, Chairman PAUL RYAN, Wisconsin DENNIS J. KUCINICH, Ohio BOB BARR, Georgia TOM LANTOS, California LEE TERRY, Nebraska PAUL E. KANJORSKI, Pennsylvania GREG WALDEN, Oregon BERNARD SANDERS, Vermont HELEN CHENOWETH-HAGE, Idaho HAROLD E. FORD, Jr., Tennessee DAVID VITTER, Louisiana Ex Officio DAN BURTON, Indiana HENRY A. WAXMAN, California Marlo Lewis, Jr., Staff Director Barbara F. Kahlow, Professional Staff Member Gabriel Neil Rubin, Clerk Elizabeth Mundinger, Minority Counsel C O N T E N T S ---------- Page Hearing held on September 13, 2000............................... 1 Statement of: Hackney, Joe, North Carolina State Representative, chairman, environment committee, National Conference of State Legislatures; Lynn Scarlett, executive director, Reason Public Policy Institute; Jim Seif, secretary, Pennsylvania Department of Environmental Protection; Langdon Marsh, director, Oregon Department of Environmental Quality; Karen Studders, commissioner, Minnesota Pollution Control Agency; Lisa Polak Edgar, deputy director, Florida Department of Environmental Protection; Erik Olson, senior attorney, Natural Resources Defense Council; and Christopher Recchia, deputy commissioner, Vermont Department of Environmental Conservation............................................... 32 Letters, statements, etc., submitted for the record by: Chenoweth-Hage, Hon. Helen, a Representative in Congress from the State of Idaho, prepared statement of.................. 30 Edgar, Lisa Polak, deputy director, Florida Department of Environmental Protection, prepared statement of............ 115 Hackney, Joe, North Carolina State Representative, chairman, environment committee, National Conference of State Legislatures, prepared statement of........................ 35 Kucinich, Hon. Dennis J., a Representative in Congress from the State of Ohio, prepared statement of................... 23 Marsh, Langdon, director, Oregon Department of Environmental Quality, prepared statement of............................. 85 Olson, Erik, senior attorney, Natural Resources Defense Council, prepared statement of............................. 123 Recchia, Christopher, deputy commissioner, Vermont Department of Environmental Conservation, prepared statement of....... 137 Ryan, Hon. Paul, , a Representative in Congress from the State of Wisconsin: Dr. Goklany's papers..................................... 4 Prepared statement of.................................... 18 Scarlett, Lynn, executive director, Reason Public Policy Institute, prepared statement of........................... 56 Seif, Jim, secretary, Pennsylvania Department of Environmental Protection, prepared statement of............ 76 Studders, Karen, commissioner, Minnesota Pollution Control Agency, prepared statement of.............................. 91 LESSONS FROM THE LABORATORIES OF DEMOCRACY: ENVIRONMENTAL INNOVATION IN THE STATES ---------- WEDNESDAY, SEPTEMBER 13, 2000 House of Representatives, Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs, Committee on Government Reform, Washington, DC. The subcommittee met, pursuant to notice, at 2:45 p.m., in room 2447, Rayburn House Office Building, Hon. Paul Ryan (vice chairman of the subcommittee) presiding. Present: Representatives Ryan, Terry, Kucinich, and Sanders. Staff present: Marlo Lewis, Jr., staff director; Barbara F. Kahlow and Jonathan Tolman, professional staff members; Bill Waller, counsel; Gabriel Neil Rubin, clerk; Elizabeth Mundinger, minority counsel; Ellen Rayner, minority chief clerk; and Jean Gosa, minority assistant clerk. Mr. Ryan. The hearing will come to order. This is a hearing of the Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs. I am Paul Ryan from Wisconsin. I will begin with a brief opening and then I will yield to my colleague from Nebraska, Mr. Terry, and then the ranking member, Mr. Kucinich, who I think is on his way over. Let me begin by thanking the witnesses, all of you, for coming some great distances to testify today. We are very interested in what you have to say on this very enlightening and important topic. In the Almanac of American Politics, 2000, Michael Barone wrote, ``the initiative in shaping public policy is leeching out of Washington to the States, to the localities, to the private sector.'' Although Barone primarily had in mind State, local, and private sector achievements in welfare reform, crime reduction and wealth creation, an impressive, albeit seldom publicized shift in the initiative from Washington to the States is also occurring in environmental policy. Today's hearing will showcase innovative environmental solutions that may surprise many of us in Washington-solutions tested in the ``laboratories of democracy,'' otherwise known as the States. Today's panel of witnesses include some of America's leading environmental policy innovators. I am very pleased to welcome Langdon Marsh, the director of Oregon's Department of Environmental Quality; Jim Seif, secretary of Pennsylvania's Department of Environmental Protection; Karen Studders, the commissioner of Minnesota's Pollution Control Agency; and Lisa Polak Edgar, the deputy director of Florida's Department of Environmental Protection. Each of you has a major environmental success story, or several such stories, to tell. We are eager to learn why your agency instituted those reforms, what results you have achieved and what lessons, if any, your experience offers for other State and Federal policymakers. I would also like to extend a warm welcome to North Carolina Representative Joe Hackney, who chairs the National Conference of State Legislatures' Environment Committee; and Lynn Scarlet, the executive director of the Reason Foundation Public Policy Institute. Mr. Hackney, among other things, will discuss what changes in national policy would encourage the kinds of environmental success stories our State agency witnesses will be sharing with us today. Ms. Scarlett's organization maintains the most comprehensive research program on State environmental innovation of any think tank in the country. Thank you for your intellectual leadership. Finally, I would like to welcome our minority witnesses, Erik Olson, the senior attorney at the Natural Resources Defense Council, and Christopher Recchia, a member of the Northeast States for Coordinated Air Use Management and deputy commissioner of the Vermont Department of Environmental Conservation. Over the past 30 years, the United States has taken a largely top-down command-and-control, one-size-fits-all approach to environmental protection. When the environmental problems facing this country were of the big and obvious variety--``haystack'' problems like burning rivers, soot-belching smokestacks, and haphazardly dumped toxic wastes-the technologically prescriptive, centralized-from- Washington approach was feasible and reasonably effective. However, after three decades, the old approach is beginning to produce diminishing returns and even, in some cases, counterproductive results. For example, Superfund was an extremely popular program when it was enacted. But today, most observers acknowledge Superfund is mired in litigation, it squanders billions of dollars, and yields little discernible benefit to public health. Another example, one that I am very familiar with as a Wisconsinite, is the oxygenate requirement for gasoline in the Clean Air Act Amendments of 1990. To meet that mandate, petroleum producers had to put MTBE in the gasoline supply. Regrettably, MTBE is now contaminating groundwater in some areas of the country. We really felt this one in my home State. The original centralized, command-and-control approach cannot easily solve today's more elusive and dispersed ``needle in a haystack'' issues, such as species habitat conservation, agricultural runoff, and watershed management. Yet, national priorities and methods have changed little since the Environmental Protection Agency was founded in 1970 with its major focus on point source pollution and traditional toxins. While Federal environmental policy has largely remained static over the last several decades, State environmental agencies have been moving to fill the void. States are setting priorities, developing partnerships with the EPA and the private sector and achieving measurable results. States are experimenting with incentive-based programs that foster technological innovation and encourage companies to go beyond mere compliance. In addition, States are basing environmental decisions on sound science, risk assessment, and other tools that maximize benefits with limited resources. Ultimately, States may be the key to successfully solving the environmental issues of the 21st century. Of course, the topic of today's hearing is not without controversy. Some critics of State environmental performance warn that any shift of authority from Washington to the States will trigger a ``race to the bottom.'' The critics fear that absent rigorous control by the EPA the States will compete for business investment by lowering environmental standards and relaxing environmental enforcement. In part, such fears are based upon the opinion that the States allowed or even promoted environmental degradation until President Nixon and Congress created the EPA in 1970 and Federalized environmental policy. This reading of the historical record is very questionable. Recently, using the EPA data, Indur Goklany, a manager of science and engineering at the U.S. Department of Interior, shows that air quality began to improve substantially in the decade before federalization, especially for pollutants, such as particulate matter and sulfur dioxide, which were generally recognized as public health problems at the time. Goklany further notes that between 1960 and 1970, the number of State air quality programs increased from 8 to 50. That is pretty startling. Many jurisdictions tightened their air quality standards during that decade. Such actions, some of which were quite innovative, look more like a race to the top than a race to the bottom. I would like to request that two of Dr. Goklany's papers be included in the record. Without objection. [The information referred to follows:] [GRAPHIC] [TIFF OMITTED] T4705.001 [GRAPHIC] [TIFF OMITTED] T4705.002 [GRAPHIC] [TIFF OMITTED] T4705.003 [GRAPHIC] [TIFF OMITTED] T4705.004 [GRAPHIC] [TIFF OMITTED] T4705.005 [GRAPHIC] [TIFF OMITTED] T4705.006 [GRAPHIC] [TIFF OMITTED] T4705.007 [GRAPHIC] [TIFF OMITTED] T4705.008 [GRAPHIC] [TIFF OMITTED] T4705.009 [GRAPHIC] [TIFF OMITTED] T4705.010 [GRAPHIC] [TIFF OMITTED] T4705.011 [GRAPHIC] [TIFF OMITTED] T4705.012 [GRAPHIC] [TIFF OMITTED] T4705.013 Mr. Ryan. Whether or not Goklany's historical scholarship is correct, current reality suggests that States are ready, willing, and able to exercise greater authority and responsibility for environmental protection. States today are running most of the clean water programs, clean air programs, safe drinking water programs, and toxic cleanup programs Congress created. According to the Environmental Council of States, States conduct about 75 to 80 percent of environmental enforcement actions taken by the EPA and the States combined, including at least 97 percent of all enforcement inspections. States also do most of the spending for environmental protection--a point that should not be overlooked--about $12.5 billion in fiscal year 1996, which is almost twice as much as the EPA's entire budget. States are prolific environmental legislators, enacting over 700 environmental laws in 1997 alone, at least half of which dealt with programs not mandated by Federal law. Moreover, 80 percent of the States have at least one Clean Air Standard that exceeds the Federal minimum standard, according to a study by the Council of State Governments. Clearly, Washington does not have a monopoly on environmental experience, wisdom, or talent. I am very eager to learn from those of you who have traveled great distances, who work in the environmental laboratories of democracy. I would like to thank all the witnesses for participating in today's hearing. [The prepared statement of Hon. Paul Ryan follows:] [GRAPHIC] [TIFF OMITTED] T4705.014 [GRAPHIC] [TIFF OMITTED] T4705.015 [GRAPHIC] [TIFF OMITTED] T4705.016 Mr. Kucinich. Thank you very much, Mr. Chairman. I appreciate the fact that this hearing is being held on State innovations in environmental policy. I welcome all the witnesses to our committee room. Today we are going to hear from a few of the States that have taken the lead in finding new and innovative ways to more efficiently and effectively implement our environmental laws. Many of these programs are still in the testing phase; however, they hold a great deal of promise and I am looking forward to hearing about them. We will hear about States that are shifting resources to regional offices that are better suited to address local issues, States that are shifting their focus to the results of environmental protections instead of the process, States that are focusing on incentives instead of punishment, and States that are working together to implement changes that would not be feasible if only applied within one State's borders. All of these ideas are worth exploring and I look forward to hearing about them. Mr. Chairman, because different States have different environmental problems, they should be able to target local priorities. In addition, States often have expertise in local issues and can more easily consult with the people in the affected community. They are laboratories for new ideas--some of which will work well for that one State and other ideas which may improve environmental performance across the Nation. In many respects, the Federal Government has recognized the important role of the States. A number of Federal laws call for the Environmental Protection Agency to delegate to the States primary responsibility for program implementation. States have assumed responsibility for approximately 70 percent of the programs eligible for delegation. The administration has passed a federalism Executive Order encouraging State participation in the development and implementation of Federal law. In addition, it has established programs like the National Environmental Performance Partnerships System which provide greater flexibility and encourage better communication between the Federal and State governments. Although there is still room for improvement, we should not forget that the current system of national environmental laws has been a great success. Mr. Chairman, many States have invested in a cleaner environment by passing laws that are more stringent than Federal minimum standards. And others, like the ones we will hear about today, are taking the lead in developing environmentally sound innovations. Nevertheless, not every State has made the same commitment to a cleaner environment. In fact, by 1995, 19 States have adopted some version of a clause which prevents the States from adopting rules that are more stringent than Federal standards. States often need a nudge from the Federal Government. For instance, when there were significant outbreaks from cryptosporidium in tap water, and over 100 people died, no State adopted a cryptosporidium standard until the Federal EPA mandated one. We should not forget the basic fact that pollutants are carried in the air, rivers, lakes, rain, crops and otherwise across State lines. And, in some cases, the polluter causes greater damage in neighboring States than in its own home State. The Federal Government needs to stay involved in environmental protection in order to: address interstate transportation of pollution; establish and enforce minimum standards; ensure a level playing field so one State does not gain an unfair advantage over others; help States develop environmental protection plans that are effective and efficient; provide a means of sharing technologies and expertise; enforce the law when local political pressures or the lack of resources or expertise makes it difficult for States to enforce the law; and prevent a ``race to the bottom'' when States lower environmental standards in order to court business. In conclusion, Mr. Chairman, I look forward to hearing about important State innovations and what we can do to encourage States to develop and implement successful ideas. However, I would like to do so in a manner that recognizes the Federal Government's critical role in protecting the public health and the environment. I ask unanimous consent to include relevant materials in the record and I thank the chair. Mr. Ryan. Without objection. [The prepared statement of Hon. Dennis J. Kucinich follows:] [GRAPHIC] [TIFF OMITTED] T4705.017 [GRAPHIC] [TIFF OMITTED] T4705.018 [GRAPHIC] [TIFF OMITTED] T4705.019 [GRAPHIC] [TIFF OMITTED] T4705.020 [GRAPHIC] [TIFF OMITTED] T4705.021 Mr. Ryan. Mr. Sanders. Mr. Sanders. Thank you very much, Mr. Chairman, for holding this important hearing. I am especially pleased that a fellow Vermonter will be testifying on your panel, Chris Recchia, the deputy director of the Vermont Air Pollution Program. Mr. Chairman, I realize that the focus of this hearing will be on environmental initiatives in the States. The premise, as I understand it, is that giving States as much flexibility as possible in combating pollution is the best approach to take. Mr. Chairman, I do not fully believe in this premise and let me tell you why. Nationwide, more than 30 percent of residents still live in regions with poor air quality. Vermont is no exception. Even though Vermont has some of the toughest air quality standards in the Nation, our health and the health of our forests, lakes and streams continues to suffer from acid rain, ozone haze, mercury and dioxin deposition. This pollution is not coming from the State of Vermont. So the State of Vermont could do everything that it possibly could to correct the problem. It would not succeed. This pollution is a result of pollution from outdated fossil fuel power plants in different States. So, I think that is why we need a national perspective as well as encouraging States to develop their own local initiatives. In other words, the biggest threats to Vermont's environment are not under the control of Vermont. In some ways they are, but often they are not. They arrive in the winds in the form of air pollution emitted in other States. Vermonters have a proud tradition of protecting our environment. Yet despite this proud tradition of environmental stewardship, we have seen how pollution from outside our State has affected our mountains, lakes and streams. Acid rain caused from sulfur dioxide emissions outside Vermont has drifted through the atmosphere and scarred our mountains and poisoned our streams. Mercury has quietly made its deadly poisonous presence into the food chain of our fish to the point where health advisories have been posted for the consumption of several species. Despite Vermont's own tough air laws and small population, the EPA has considered air quality warnings in Vermont that are comparable to emissions consistent for much larger cities. Silently each night, pollution from outside Vermont seeps into our State and our exemplary environmental laws are powerless to stop or even limit the encroachment. The Clean Air Act of 1970 was a milestone law, which established national air quality standards for the first time and attempted to provide protection of populations who are affected by emissions outside their own local and State control. While the bill has improved air quality, there is a loophole in the law that needs to be fixed. More than 75 percent of the fossil fuel fired plants in the United States began operation before the 1970 Clean Air Act was passed. As a result, they are ``grand fathered'' out from under the full force of its regulations. To end this loophole, I am a co-sponsor of the Clean Smokestacks Act introduced by Mr. Waxman. I am also a co- sponsor of the Clean Power Plant Act introduced by Mr. Allen to crack down on mercury pollution. Congress must pass these laws as quickly as possible. Another important Federal environmental regulation that must be strengthened deals with the Corporate Average Fuel Economy [CAFE] standards. These standards are especially important today when American cars and light trucks are responsible for consuming 40 percent of the oil used in the United States. Twenty-five years ago Congress passed, with bipartisan support, the simple provision requiring cars and light trucks to go further on a gallon of gasoline. This sensible and efficient law, which was signed by President Gerald Ford, created a standard for the number of miles per gallon that cars and trucks must meet. In retrospect, it was one of the most successful environmental laws of all time, a Federal law signed by a Republican President. CAFE standards helped curb climate change by keeping millions of tons of carbon dioxide out of the atmosphere. They also cut pollution, improve air quality and help polluted regions achieve the goals of the Clean Air Act. CAFE standards provide an efficient and relatively painless way of achieving a cleaner and safer environment for all Americans. The CAFE standards program is a bargain for Americans because it saves them money. I think most of us know that. Let me just conclude, Mr. Chairman, by suggesting that I think it is important that we learn what various States around this country are doing, that we learn from each State. I am proud of the environmental record of the State of Vermont. But I do wish to emphasize that while we learn from each State, it would be irresponsible to suggest that the Federal Government does not have a very, very important role in protecting our environment. I thank you, Mr. Chairman, for the opportunity to make those remarks. Mr. Ryan. I thank you, Mr. Sanders. I thank you for your passion on this issue as well. I would also ask unanimous consent that Representative Chenoweth-Hage's statement be included in the record. Without objection. [The prepared statement of Hon. Helen Chenoweth-Hage follows:] [GRAPHIC] [TIFF OMITTED] T4705.022 [GRAPHIC] [TIFF OMITTED] T4705.023 Mr. Ryan. First, let me swear in all the witnesses. Would each of you please stand? [Witnesses sworn.] Mr. Ryan. We will begin with Representative Hackney. STATEMENTS OF JOE HACKNEY, NORTH CAROLINA STATE REPRESENTATIVE, CHAIRMAN, ENVIRONMENT COMMITTEE, NATIONAL CONFERENCE OF STATE LEGISLATURES; LYNN SCARLETT, EXECUTIVE DIRECTOR, REASON PUBLIC POLICY INSTITUTE; JIM SEIF, SECRETARY, PENNSYLVANIA DEPARTMENT OF ENVIRONMENTAL PROTECTION; LANGDON MARSH, DIRECTOR, OREGON DEPARTMENT OF ENVIRONMENTAL QUALITY; KAREN STUDDERS, COMMISSIONER, MINNESOTA POLLUTION CONTROL AGENCY; LISA POLAK EDGAR, DEPUTY DIRECTOR, FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION; ERIK OLSON, SENIOR ATTORNEY, NATURAL RESOURCES DEFENSE COUNCIL; AND CHRISTOPHER RECCHIA, DEPUTY COMMISSIONER, VERMONT DEPARTMENT OF ENVIRONMENTAL CONSERVATION Mr. Hackney. Mr. Chairman and members of the subcommittee, I am Representative Joe Hackney, Speaker Pro Tem of the North Carolina House. I appear before you today on behalf of the National Conference of State Legislatures. I currently serve as the Chair of NCSL's Environment Committee of the Assembly on Federal Issues. NCSL is a bipartisan organization representing all State legislators from all 50 States and our Nation's commonwealths, territories, possessions, and the District of Columbia. The focus of NCSL's policies and advocacy activity is the preservation of State authority, protection against costly unfunded mandates, the promotion of fiscal integrity and the development and maintenance of workable Federal-State partnerships. I appreciate the invitation to speak to you today about the Federal-State relationship and the changes needed to assist States in further protecting and enhancing environmental quality. Let me say first of all that NCSL urges the Federal Government to renew its commitment to the Federal-State relationship in environmental protection. For nearly 40 years, Federal environmental laws have recognized the primacy of State governments. From the very first Federal law, Congress determined that States and local governments were in an optimal position to implement environmental standards that are established by the Federal Government. States acting in partnership with the Federal Government play an indispensable role in a mutual effort to protect natural resources and combat environmental degradation and pollution. New environmental problems have arisen and new approaches are required. Except for the amendments to the Safe Drinking Water Act of 1996 and the Clean Air Act in 1990, most of our major environmental acts were last visited in the 1980's. Although during that time we have made great progress, a significant amount of pollution no longer comes from the end of a pipe, but from some other source. We think improvements are needed. We want to urge Congress to use this hearing as the first step in a new commitment to the Federal-State partnership for the 21st century. We urge Congress and the new administration to work with NCSL and its Assembly on Federal Issues to convene regular summits of State, Federal and local lawmakers, administrators and other stakeholders to identify areas of our Nation's environmental law that are outdated, ways in which current laws and regulations can be modernized, and tools to improve the Federal-State relationship. It is time to move forward to the 21st century level in protecting our water and air. Together we need to identify smarter goals and strategies for keeping pollutants out of the water or air. We need to make much more progress in reducing the emissions from power plants and other stationary sources. We need to continue and expand upon the progress we have made in reducing mobile emissions. NCSL was a strong supporter of the move to low-sulfur gasoline. I might note that my State, North Carolina, was moving along on that track before EPA acted as well. We need to pay more attention as a Nation to whether the ways in which we grow our economy can have positive rather than negative effects on environmental protection. For example, we need to do a better job of preserving farms and open space as we grow. Together, we can move so much further ahead. The people expect us to lead in these matters and NCSL would be pleased to be a part of this effort. Let me make a few points in summarizing the rest of my testimony. No. 1, we commend the EPA in its efforts to encourage States to develop innovative approaches. We don't always find that those efforts work or are realized, but we support a more formalized working relationship between the States and the EPA which recognizes the role of the States and their agencies as partners in the decisionmaking process as contemplated in the original environmental statutes. Second, and this is important, I think, in the context of what others are going to say today, we recognize and support the role of the Federal Government in establishing uniform national environmental standards. But States must always have the right to go beyond these standards and use their creativity to pursue novel solutions to identified problems. In fact, in North Carolina our concentrated animal feeding operations laws are more comprehensive then EPA's. And we are moving ahead with research at the North Carolina State University to try and do the best job we can with that problem. Third, improved flexibility. States have a compelling interest in the uniform application and enforcement of Federal laws in order to prevent pollution havens and prevent States with lax enforcement from obtaining unfair economic advantages. But, States need as much administrative flexibility as possible, consistent with superior protection of our environment to achieve environmental protections. Several examples are given in the written text. Next, let me mention just briefly a greater Federal role when it comes to interstate pollution. We have to address interstate pollution. We are, at our December meeting, going to take up some aspects of that problem. We invite the participation of the Congress. We oppose any preemption attempts. We do not believe centralized decisionmaking in Federal courts for compensation for land use and other regulatory actions represents something that you should get into. That would be a major threat to our constitutional system of federalism. Improving the efficiency of the State and local process is an issue for State legislatures, not the Congress. We continue to oppose unfunded mandates. Let me just say in closing that the Federal-State partnership has been in many respects a success story. The public interest has been well served. Environmental standards--health-based air quality standards, water quality criteria which supports swimming, fishing, drinking and biological needs--all of these have given States environmental objectives that they can share, and each State can then implement programs by delegation to solve those problems. I appreciate the opportunity to appear before you today on behalf of the National Conference of State Legislatures. I welcome your questions on this testimony. [The prepared statement of Mr. Hackney follows:] [GRAPHIC] [TIFF OMITTED] T4705.024 [GRAPHIC] [TIFF OMITTED] T4705.025 [GRAPHIC] [TIFF OMITTED] T4705.026 [GRAPHIC] [TIFF OMITTED] T4705.027 [GRAPHIC] [TIFF OMITTED] T4705.028 [GRAPHIC] [TIFF OMITTED] T4705.029 [GRAPHIC] [TIFF OMITTED] T4705.030 [GRAPHIC] [TIFF OMITTED] T4705.031 [GRAPHIC] [TIFF OMITTED] T4705.032 [GRAPHIC] [TIFF OMITTED] T4705.033 [GRAPHIC] [TIFF OMITTED] T4705.034 [GRAPHIC] [TIFF OMITTED] T4705.035 [GRAPHIC] [TIFF OMITTED] T4705.036 [GRAPHIC] [TIFF OMITTED] T4705.037 [GRAPHIC] [TIFF OMITTED] T4705.038 [GRAPHIC] [TIFF OMITTED] T4705.039 [GRAPHIC] [TIFF OMITTED] T4705.040 [GRAPHIC] [TIFF OMITTED] T4705.041 Mr. Ryan. Thank you, Representative Hackney. I would like to ask each of the witnesses if we could try to confine your remarks to the 5-minute rule, since there are so many witnesses and we would like to have ample time for questioning. Ms. Scarlett. Ms. Scarlett. Thank you, Congressman Ryan, Congressman Kucinich and Congressman Sanders and other members of the subcommittee for having these hearings. My name is Lynn Scarlett. I am executive director of Reason Public Policy Institute, a Los Angeles-based nonpartisan research organization. Briefly, we have experienced three decades, as many of the Members of Congress have pointed out here, of environmental policy since the first Earth Day. Those three decades have indeed yielded some successes, but there are four recurring policy challenges. First, how can policies better ensure environmental innovations, both technological and institutional innovations? Second, how can they better focus on results and take into account the many interrelated goals rather than a silo-by-silo or medium-by-medium approach? Third, how can they better foster private stewardship, give us a Nation, if you will, of self-motivated environmental stewards? Fourth, how can they better take into account local knowledge, what Congressman Kucinich referred to in terms of the knowledge of time, place, and circumstance, the devilish details of each location and each State? In this context of questions, a new environmentalism is emerging and States are at the forefront of this discovery process. There are four features to this new environmentalism. First is a move by the States toward greater flexibility in how they work with their regulated entities to achieve goals. Second is a focus on performance rather than process as the primary point of emphasis. Third is an enhanced role for incentives rather than punishment as the strategy of choice. Fourth is a move toward place-based decisionmaking where the devilish details of local circumstances are evident. I am going to give you just a brief thumbnail sketch of these innovations and defer to the State innovators to describe them in more detail. First, on enhanced flexibility, I want to underscore that this is not about rollback, as Congressman Ryan noted. It is in fact quite the opposite. It is about extending the environmental performance envelope both upward and outward. I just want to give you one example. New Jersey embarked on a facility-wide permitting program replacing 80 permits on a source-by-source basis at one plant with a single facility-wide permit. This enabled a system-wide evaluation of that plant and through that the firm was able to reduce 8.5 million pounds of emissions in a very short time. The second type of innovation is the move toward developing very robust performance indicators. Examples, of course, occur in Florida. You have a representative from Florida here, and Oregon. I presume you will hear more about those efforts. But these emphases on performance indicators have two key attributes that are worth noting. First is linking those indicators to priority setting and second is a broadening beyond enforcement bean counting to an emphasis on actual environmental performance. The third type of innovation is in the realm of incentives. One example would be the Texas Clean Industries 2000 Program. In this program over 200 firms commit to a 50 percent reduction in toxic chemical emissions in a 2-year timeframe. Other examples would be Illinois's Clean Break Amnesty Program in which the State offers compliance assistance to small emitters of pollution to help them clean up rather than taking a more permitting and fine-oriented approach. Finally, there is a move toward place-based decisionmaking, particularly in the realm of watershed management. Watersheds involve often cross-boundary problems and challenges. Two examples I would mention are both Minnesota and Idaho, which have pioneered effluent trading programs, in particular, between point sources, the old-fashioned focus on emissions that has been the center of attention, and nonpoint or farm run-off problems, with some substantial benefits. Let me turn now to challenges and opportunities. I think there are three categories of challenges that these State endeavors face. First is the set of challenges posed by fitting new programs within the old regulatory context. Perhaps in the question and answer period we can discuss in more detail what the fitting together involves. The second set of challenges is technical, that is, developing performance indicators is, for example, not easy. How does one measure? How does one decide which indicators? Again, we can go into more detail later. The third set is which stakeholders are at the decision table and how does one incorporate them, particularly as one moves to place-based decisionmaking. The final question, and I think of most interest to the Congressman today, is whether Congress can be a facilitator of this new environmentalism. What changes, if any, are needed to encourage innovation and improve environmental performance? It seems to me that while we have an efflorescence of State innovations, these are taking place in many respects in the interstices between the current regulations and to some extent at the margins. To foster these initiatives, therefore, I think that we do need what Deborah Knopman of the Progressive Policy Institute called ``transitional legal space.'' This is not the place for outlining those details, but I want to make two points. First, one needs a delicate balance between asserting congressional commitment to flexibility and these innovative approaches, but resisting prescription and micro-management of that process, a recognition of what Congressman Kucinich noted about the different needs and different circumstances of each State. Second, the expression of commitment may not be enough. One may need more resources, more Federal resources devoted to monitoring and also to helping States invest in developing their indicators. Finally, congressional action must recognize, as Congressman Sanders pointed out, that on the one hand there is a State leadership in new environmentalism, but on the other hand, one does need backstop enforcement mechanisms, cross- boundary facilitating role for Congress and for the EPA, continued monitoring and an information clearinghouse. I think with that I will close and say that the new environmentalism is a discovery process and that is what these State efforts are largely about. Thank you. [The prepared statement of Ms. Scarlett follows:] [GRAPHIC] [TIFF OMITTED] T4705.042 [GRAPHIC] [TIFF OMITTED] T4705.043 [GRAPHIC] [TIFF OMITTED] T4705.044 [GRAPHIC] [TIFF OMITTED] T4705.045 [GRAPHIC] [TIFF OMITTED] T4705.046 [GRAPHIC] [TIFF OMITTED] T4705.047 [GRAPHIC] [TIFF OMITTED] T4705.048 [GRAPHIC] [TIFF OMITTED] T4705.049 [GRAPHIC] [TIFF OMITTED] T4705.050 [GRAPHIC] [TIFF OMITTED] T4705.051 [GRAPHIC] [TIFF OMITTED] T4705.052 [GRAPHIC] [TIFF OMITTED] T4705.053 [GRAPHIC] [TIFF OMITTED] T4705.054 [GRAPHIC] [TIFF OMITTED] T4705.055 [GRAPHIC] [TIFF OMITTED] T4705.056 [GRAPHIC] [TIFF OMITTED] T4705.057 [GRAPHIC] [TIFF OMITTED] T4705.058 Mr. Ryan. Thank you. That is a lot for 5 minutes. Ms. Scarlett. I have been told I would be good on the Fed- Ex commercial. Mr. Ryan. Yes, absolutely. That was very comprehensive. I appreciate that. Just so everybody knows, all of the contents of your opening statements will be included in the record should you decide to summarize your remarks. Mr. Seif. Mr. Seif. Thank you. Pennsylvania appreciates this chance to be here this afternoon. We especially agree with your thesis of the laboratories of democracy on behalf of Governor Tom Ridge and ECOS, the Environmental Council of the States, which a number of us are proud to be members of. We are very happy that the Beltway has taken notice of what some of us guys are doing out there. My written testimony, as you have intimated, is far too long and I am not even going to try to summarize it. It does showcase three of the innovations that are particular sources of pride to us in Pennsylvania. As to each, I would like to make a couple of points. First, the Land Recycling Program. Land recycling occurred, unlike most Federal statutes, without any delegation at all. Superfund is one of those statutes that doesn't provide for the standard Federal package of deferring to the States after certain hoops have been jumped through. That may account for its innovativeness. It was not subject to a long, EPA recipe of, ``here is what you have to do, here is the kind of statutes, here are the regs, here are how many FTEs you have to devote to it,'' and so on. I don't necessarily recommend that delegation be altered; I think it is a great idea, a very important innovation in American jurisprudence, but it sure needs to be loosened up, especially at this time when 71 percent, by EPA's measure, of programs have been delegated. We need some of what Lynn Scarlett has mentioned, that maneuvering room in between the statutes where we can do more innovation, but still with Federal guidance, which I think, is overall very important. Congressman Sanders has pointed out, someone has to be in charge and someone has to watch over all the 50 States. The question about delegation is, should there be some protection of the brownfields programs? I do commend to the committee's attention work being done by other committees and in the Senate on the subject of protecting the brownfields programs from perhaps some action by this Federal Government, by the Superfund, that would do harm to them. At different times different statutes need different levels of delegation. The Clean Water Act needed a lot at the beginning and needs less now. The Clean Air Act may need more now simply because of the nature of pollution. There is not a single sort of role for where delegation should be. EPA needs to have that kind of maneuvering room. Growing Greener is a $645 million expenditure in Pennsylvania for what we have dubbed ``green infrastructure.'' Infrastructure is usually thought of, in the green area, the environmental area, as bricks and mortar and pipes and pumps and so on. In Pennsylvania we have discovered that most people still think that we can argue about parts per million of this or that pollutant as the environment, as the trees and streams and the clean air. Green infrastructure is simply tending to that broad aspect of the environment beyond pipes and pumps. It is undeveloped flood plain. It is a farm that is still a farm or other kind of open space. It is a stream that has the right kind of buffer. It is a network of land strung together to encourage and enhance biodiversity. It is a watershed that has a community organized behind it or a broad arrangement such as has been pioneered in the Everglades recently. It is a watershed that has a real TMDL, a sensible common sense community measurement of what are we trying to do here and how can we, point source and nonpoint source, get it done. Green infrastructure is also an environmental leadership style--the kind of people who will reach for hip boots and a shovel instead of a microphone when they see a problem and won't run off to the State capital or the national capital to complain and demand new Federal laws. The 21st century economy requires green infrastructure of the sort that I am talking about. No community can live long on smokestacks or dot-coms. You need to have a quality of life, and that is green infrastructure. In Pennsylvania we are glad we were able to fund this amount of green infrastructure without going into any debt. It is considered an investment and not something that our grandchildren need to pay for. Finally, I would like to talk about measuring the right things. If I ever get a chance to brag to my grandchildren about what I did when I was on the public payroll, it will be the attempt not to build green infrastructure and revitalize this or that acreage and industrial land, but rather to change the way we count things, to change the very nature of the public debate about the environment. When I started out in the 1970's, any target you shot at you could hit, and say you got a polluter and throw somebody in jail. In the environmental area we have tarried too long in counting enforcement as a surrogate for public administration progress against a known enemy which is pollution. It is not how tough we are but how effective we are. That means we can use and should use other tools, not instead of but in addition to the traditional shoot 'em up cops and robbers stuff that makes for good press. The fact is that I would be happy to make available to the committee the program that we have undertaken in Pennsylvania to measure who is in compliance and who is not. It is not ``Did we zing them last night?'' But did they do what they were supposed to under the laws of the land, both State and Federal. We can tell you that now. The fact is that when we can tell you that, it changes the public debate about what should the department be doing. We are tired of being just a police force. We want to be a police force and an ag extension agent as well as to the broader problems of pollution. I would like to conclude with some observations and state an agreement with Congressman Sanders. Vermont is a little bit like western Pennsylvania, the victim of pollutants elsewhere. We could stop every car in Pittsburgh and still be in trouble when we wake up in the morning at that end of our State. The fact is air pollution is different from water pollution and it is different from pollution underneath the land as a result of hazardous waste and so on. We do need a strong Federal Government. We do need careful, thoughtful administration of the Federal system, not bureaucrat bashing, which I am always guilty of myself, including EPA bureaucrats. But give them some maneuvering room in the State and at EPA to do sensible things and they can be different at different times and with different pollutants. Thank you. [The prepared statement of Mr. Seif follows:] [GRAPHIC] [TIFF OMITTED] T4705.059 [GRAPHIC] [TIFF OMITTED] T4705.060 [GRAPHIC] [TIFF OMITTED] T4705.061 [GRAPHIC] [TIFF OMITTED] T4705.062 [GRAPHIC] [TIFF OMITTED] T4705.063 [GRAPHIC] [TIFF OMITTED] T4705.064 [GRAPHIC] [TIFF OMITTED] T4705.065 Mr. Ryan. Thank you, Mr. Seif. We will next turn to Langdon Marsh, the director of the Oregon Department of Environmental Quality. Mr. Marsh. Mr. Marsh. Chairman Ryan, Congressman Sanders, my name is Langdon Marsh. I am the director of the Oregon Department of Environmental Quality. I am very glad to be here to talk about some of our environmental policy innovations in Oregon. We have a long history of innovative environmental programs in our State, some of the first air pollution control laws in the 1950's, the first bottle law, local land use planning laws and a number of other programs designed to protect the environment and quality of life consistent with economic growth. Over the past 5 years we have made a number of strides in improving how environmental programs are carried out, streamlined the permitting process, worked with neighborhoods on cleaning up pollution and gotten many regulated facilities into programs that produce effective results. I would like to talk about one of those programs which we believe is a real first and is being duplicated in other States and within EPA. It is called green permits. This program encourages companies to go beyond compliance with environmental standards and actively improve their environmental performance. It has a tiered approach offering different kinds of green permits in which increasing levels of performance receive increasing benefits. This legislation authorizes our agency to modify regulatory requirements for facilities that qualify, making it possible for us to do things like consolidated reporting, modified monitoring and alternative controls that allow for flexibility. The payoff is that facilities must qualify by demonstrating that they exceed the minimum requirements for compliance, that they implement environmental management systems that truly incorporate environmental concerns into day-to-day business decisionmaking and that they also communicate widely and openly with the public about their environmental performance. We have currently five companies that have applied for green permits. We are working with each of them. Each has demonstrated a commitment to the environment and a willingness to discuss its performance with the community. Each has made significant gains in environmental improvements like reducing chemical use and wastes, eliminating wastes sent to a landfill and reducing air emissions to less than 10 percent of the levels allowed in the permit. They are also working on new projects that don't necessarily relate just to the things that we as an environmental agency regulate, like a reduction of water use which benefits the larger community. The regulatory efficiencies that these companies will benefit from include consolidated reporting, flexibility in their permits and enforcement discretion to recognize that a company that has made the commitment, stepped up to the plate, is making improvements and is accounting for it publicly does not need the same kind of scrutiny as other companies. We have also worked closely with EPA in developing its own national performance track program, which is a very similar program that was announced earlier this summer. It recognizes the leadership of many in the private sector. The ideas that are incorporated in that program have been tested in Oregon. I think it offers some benefits for those States that have a program like ours so that facilities can participate in both and get benefits from both. I would like to mention a couple of other things that we are doing with innovation in dealing with the business community. Small businesses, we recognize, are a source of a significant amount of pollution that has not been traditionally regulated under the Clean Air and Clean Water Acts and the hazardous waste laws. So, we have developed as one way of dealing with this a partnership program with the automotive services industry in the Portland area to certify auto shops that exceed regulatory goals. We give them assistance and help publicize their certification as green businesses, which are designed to help them in the marketplace. We have also participated in the Natural Step Network. Natural Step is an international organization and movement to promote sustainable business practices among companies that sign up for it. We are very pleased to be participating with companies like Nike on the one hand and a small house parts company on the other, working in partnership with them to lower their environmental footprint and to share their success stories with other businesses in the State. Our Governor Kitzhaber has recently issued an executive order on sustainability, the first of perhaps several that will put the State on the path toward encouraging sustainable actions by businesses, industry and the public. We have been working very closely with the Governor on that. So, in conclusion, we are working in partnership with many proactive, progressive companies to protect the environment, trying to solve problems, not just run programs. But as others have said, we can't disregard the more traditional environmental programs. Permits, inspections, and enforcement actions have to be continued to ensure that we continue to protect the environment. Thank you very much. [The prepared statement of Mr. Marsh follows:] [GRAPHIC] [TIFF OMITTED] T4705.066 [GRAPHIC] [TIFF OMITTED] T4705.067 [GRAPHIC] [TIFF OMITTED] T4705.068 Mr. Ryan. Thank you, Mr. Marsh. Next we have Karen Studders, the commissioner of the Minnesota Pollution Control Agency. Ms. Studders. Mr. Chairman and members of the subcommittee, I want to thank you for the opportunity to be here before you today to share what we are doing in the State of Minnesota. The three areas that I would like to discuss with you today will focus on ``the second wave of environmental protection'' in the United States; the reorganization of our State agency to meet new environmental challenges; and water pollutant trading in the Minnesota River Basin. I have spent my entire professional career working in the environmental arena. I began as a bench chemist with the Environmental Protection Agency and then I spent 17 years directing the environmental regulatory programs for a large energy provider. Over the last 18 months I have been serving under Governor Ventura as Commissioner of the Minnesota Pollution Control Agency. I would tell you that I am very excited that you asked for this hearing today on this subject. I think it is a very important matter that needs attention and we need to work together on this. What I would like to do is talk a little bit about this ``second wave of environmental protection'' in the United States. The first wave of protection began in the early 1970's and it focused on regulating large, industrial polluters. It was very successful in using command and control to address what we call point source pollution, out of the stack and also out of the pipe. However, to solve the environmental problems we have today, we need to transition to the ``second wave of environmental protection.'' We need new tools in this second wave to address nonpoint sources of pollution. For example, in Minnesota it is estimated that more than 50 percent of our air pollution comes from mobile sources, that is cars, trucks, and airplanes. And 90 percent of our lakes, rivers and streams are affected by nonpoint sources of pollution such as urban runoff, agricultural activities, and failing septic systems. If we are to be truly innovative and effective, States need flexibility. That is only available through Federal authorization. Let me tell you that in 1996 Minnesota passed legislation to authorize environmental regulatory innovation experiments. We did this so that Minnesota could take advantage of Federal innovation programs such as project XL and the common sense initiative. However, the Federal programs did not deliver the promised flexibility we needed. As a result, Minnesota has been unable to use its State innovations statute. To address the new environmental challenges, this agency underwent a major reorganization about 2 years ago. We are no longer structured based on air, water and land, what we once called ``silos.'' We redesigned the agency's service delivery system to match three distinctly different geographic areas of our State. This overhead that we are putting up shows the North district where we have most of our recreational lakes, including Lake Superior, as well as mining activities. The South district, which is mostly agricultural crop land, and the Metro district where one half of the population of the State resides in the Twin Cities. We also decentralized operations because different environmental priorities exist in different parts of our State. We now have six offices in greater Minnesota with 110 employees delivering services in each of their respective regions. We also created two additional divisions within our agency. One is devoted to policy and planning and the other environmental outcomes. It is the job of the environmental outcomes division to monitor the environment, to analyze the environmental data we get and to evaluate the effectiveness of our programs. For years we have tracked progress by the number of permits we have issued, the enforcement actions we have taken and the inspections we have made. That is what EPA requires us to do. We have made the assumption that these activities result in positive environmental outcomes. But we need a better handle today on the very diffuse activities that are degrading our environment, the nonpoint sources. The reorganization we went through is about performance and measurable results. In order to achieve those results, we have tied individual work plans to our agency's 5-year strategic plan, which is actually linked to our 2-year contract with the Environmental Protection Agency, our Environmental Performance Partnership Agreement that we have with EPA. I would like to share another environmental innovation from the State of Minnesota. Because the Minnesota River is so seriously polluted, the Minnesota Pollution Control Agency actually strictly limits any new wastewater discharges that can occur in that river basin. If you look at the overhead that is up there, there is a picture of both the Minnesota and Mississippi Rivers as they come together. You can see the distinct discoloration of the Minnesota River, which is shown on the upper top half of the screen. In 1988, EPA and our agency established a total maximum daily load for that river because it was so polluted. This cap placed tight restrictions on all existing wastewater treatment plants that discharge into that river. It left little room for expanded discharges. So, how do we allow industrial expansion in this part of our State while at the same time protecting our water quality? Since 1997, we have used a technique called ``pollution trading.'' In this case we are talking about water pollution, specifically phosphorus and nitrogen. Our first experience in pollutant trading was a partnership with Rahr Malting. As the name implies, Rahr is a malting company and the product is used in brewing. The pollutant trading that they went through entailed not just point source, but also nonpoint source pollution. Let me tell you how it works. Rahr trades its increased point source discharges of pollutants for a decrease in nonpoint source pollution coming from agricultural land that we don't currently regulate under our regulations. To achieve this, Rahr established a trust fund of a quarter of a million dollars, supervised by an independent board of directors. Farmers and other landowners, including municipalities, apply to the fund for projects aimed at reducing nonpoint pollution in the river basin. Rahr's offset provisions prevent 14,700 pounds of nitrogen and 7,370 pounds of phosphorus from going into that river annually. In conclusion, I would like to tell you that to be effective in this ``second wave of environmental protection'' we need to do more than just build partnerships with industry. We also need to work with individuals on behavior change. We must create environmental literacy within our citizens and we must start instilling a sense of environmental awareness in our young people. I am optimistic that the citizens will respond to our invitation to become environmental stewards. The State recently published the Minnesota Environment 2000 Report, which I have provided to you. It is a snapshot of the environmental past, present and future over the last 30 years. I would like to tell you that there is a growing understanding by the States of the need to move into this ``second wave of environmental protection.'' In this second wave, both point and nonpoint source pollution programs are addressed using a myriad of tools, education, assistance, voluntary and incentive-based programs as well as command and control regulatory programs. EPA has an important role to play at the Federal level and an important role in supporting our State innovations during this second wave. To make such innovations possible, however, Congress must provide authorization necessary in order for regulatory innovation experiments to occur. Thank you very much. I look forward to answering questions later. [Note.--The publication entitled, ``Minnesota Environment 2000,'' may be found in subcommittee files.] [The prepared statement of Ms. Studders follows:] [GRAPHIC] [TIFF OMITTED] T4705.069 [GRAPHIC] [TIFF OMITTED] T4705.070 [GRAPHIC] [TIFF OMITTED] T4705.071 [GRAPHIC] [TIFF OMITTED] T4705.072 [GRAPHIC] [TIFF OMITTED] T4705.073 [GRAPHIC] [TIFF OMITTED] T4705.074 [GRAPHIC] [TIFF OMITTED] T4705.075 [GRAPHIC] [TIFF OMITTED] T4705.076 [GRAPHIC] [TIFF OMITTED] T4705.077 [GRAPHIC] [TIFF OMITTED] T4705.078 [GRAPHIC] [TIFF OMITTED] T4705.079 [GRAPHIC] [TIFF OMITTED] T4705.080 [GRAPHIC] [TIFF OMITTED] T4705.081 [GRAPHIC] [TIFF OMITTED] T4705.082 [GRAPHIC] [TIFF OMITTED] T4705.083 [GRAPHIC] [TIFF OMITTED] T4705.084 [GRAPHIC] [TIFF OMITTED] T4705.085 [GRAPHIC] [TIFF OMITTED] T4705.086 [GRAPHIC] [TIFF OMITTED] T4705.087 [GRAPHIC] [TIFF OMITTED] T4705.088 [GRAPHIC] [TIFF OMITTED] T4705.089 Mr. Ryan. Thank you very much, Ms. Studders. Our next witness is Lisa Polak Edgar, the deputy director of the Florida Department of Environmental Protection. Ms. Edgar. Ms. Edgar. Thank you, Mr. Chairman, members of the committee. Thank you for inviting Florida to participate on this panel today. My name is Lisa Polak Edgar and I am deputy secretary for planning and management for the Florida Department of Environmental Protection. I am here representing the Florida DEP and Secretary David Struhs. I would like to talk to you today about two innovative projects that we have been working on in Florida and also briefly discuss our performance measurement system. You may or may not be familiar with d-limonene. D-limonene is a VOC, a volatile organic compound that is released into the air during the citrus processing process. It is a gas that comes from the oil that you get when you squeeze citrus for juice. D-limonene is volatile. It reacts with nitrogen in sunlight to form ozone and as such is regulated under the Clean Air Act. However, unlike many other VOCs, it is not toxic. In fact, it is being used increasingly as a substitute for toxic solvents and some industry pollution prevention programs. D-limonene emissions in Florida generally occur in the winter as the citrus is processed after the growing season in the summer. Of course, ozone formation is not as serious a problem in the winter. For these reasons, Florida had never developed a serious regulatory plan for this VOC emission for the 26 citrus processing plants in Florida. This left the industry vulnerable under the Clean Air Act and left our State regulatory program incomplete. As the industry is currently going through some consolidation and plant modernization, our air program discovered that the VOC emissions from these plants were higher than had been estimated. The time was right to rationalize our regulatory strategy. We began discussions with the industry association and key State legislators resulting in a bill that created a new State- wide standard that will cut VOC emissions in half from the average citrus plant. The law also provides the ability for plants that exceed the standard to sell credits to other citrus processing plants. We were successful at the State level because we used the collaborative approach up front, working with the industry and State legislators, because of new technology that allows plants to reduce the d-limonene emissions, and because the emission production credit possibility allows more efficient deployment of new capital investments by the industry for emission control. I would like to take a moment and share two quotes with you about this program. One is from one of the legislators who worked on it. ``It is win-win. Companies have a financial incentive to be cleaner and those that can't afford to upgrade equipment have a way to stay in business.'' From the industry, executive vice president of the Processors Association, ``We are going to have less paperwork, but a higher standard of performance. We are also going to have more flexibility to meet that standard and that was our preference.`` This initiative requires EPA approval of an amendment to Florida's SIP, the State Implementation Plan. We will be submitting this to EPA later this year. I would also like to talk to you briefly about our performance measurement system. The concept of better measuring and reporting our environmental performance is a central challenge to all environmental managers. This is not about reducing standards; it is about better understanding the impacts and outcomes of our environmental protection programs. Performance indicators inform important decisions, thereby increasing our ability to protect the environment. Likewise, free and open assessments of performance foster and promote innovation by pointing out where it is most urgently needed. At the Florida DEP we have had a performance measurement system in place for about 3 years with information published in a Secretary's quarterly performance report. For performance measurement to add value requires thorough data analysis, trend identification, and a commitment to productive action to address both longstanding and emerging trends that are troubling. Tools that we use in this process include focus and watch designations and environmental problem solving. One project that used these tools we called ``Team SOS.'' Data showed that sewage overflows in Orange County, the Orlando area, were totalling over 1 million gallons a year. That is hundreds of thousands of gallons of raw sewage flowing into rivers, lakes, and even homes. A team was formed to work with Orange County utilities. The point was to find ways to fix the problem, not to just report it. In this instance, the data already existed. Sewage overflows and spills are required to be reported and have been for years. The difference now was that the data was analyzed and a trend of sewage overflows and spills in certain areas and under certain conditions was identified. Working with the Orange County utilities, over 20 no-cost or low-cost actions and innovations were identified that would help reduce the problem. The annual amount of gallons spilled was reduced by over 60 percent. As I mentioned earlier, our performance measurement system has been in place about 3 years. We are now in the process of evaluating our measures, our data collection systems, and our data quality. It is a performance measurement of our performance measurement system, if you will. Secretary Struhs is committed to the continuous improvement of the ability for all of us to make informed decisions about our environmental quality and this includes improving the functionality of our performance measurement system. The mission statement of the Florida Department of Environmental Protection is ``more protection, less process.'' Performance indicators should promote informed decisionmaking at all levels and help us evaluate our activities. It should also help us determine whether some activities are serving process more than protection and aid us in shifting resources and efforts that serve only process toward the higher purposes of protection. I would like to end by sharing a quote attributed to General George Patton. ``Don't tell people how to do things. Tell them what to do and let them surprise you with the results.'' Thank you. [The prepared statement of Ms. Edgar follows:] [GRAPHIC] [TIFF OMITTED] T4705.090 [GRAPHIC] [TIFF OMITTED] T4705.091 [GRAPHIC] [TIFF OMITTED] T4705.092 [GRAPHIC] [TIFF OMITTED] T4705.093 [GRAPHIC] [TIFF OMITTED] T4705.094 [GRAPHIC] [TIFF OMITTED] T4705.095 Mr. Ryan. Thank you, Ms. Edgar. Now, we will hear from Erik Olson, the senior attorney, at the NRDC. Mr. Olson. Mr. Olson. Thank you. Thank you for having me this afternoon. I wanted to talk a little bit about some of the debate that has been going on about this very issue for some time. Obviously, this is not a new issue. I also want to talk about some of the innovations that we have embraced that States have adopted. Finally, I wanted to note some of the basic criteria that we think need to be met so that we can ensure continued, ``cooperative federalism,'' as it has often been called by academic commentators. As we all know, since EPA was created 30 years ago, there has been enormous improvement in environmental protection and in public health standards and in results. Much, if not most, of that has been the result of vigorous work at the State level because EPA simply doesn't have the resources or the knowledge or the ability to put into effect most of the Federal regulations without State cooperation and help. Many State innovations have occurred that you have heard about, and some of them have been very impressive. They often occurred because there was a Federal requirement that there be air quality improvements or that there be some other improvement. The States were creative and thought of new ways to achieve those goals. There are many other examples that are cited in our testimony such as improved right to know requirements that have been adopted in California and New York that ended up being part of the Federal law. Another example is in Wisconsin and in Iowa and in New Jersey. There are strong groundwater protection programs that still haven't made it into Federal law that were a result of innovative State programs. Similarly, in California the citizens adopted a proposition, Proposition 65, that imposed right-to-know requirements for polluters that were creating toxic emissions or toxic exposures to consumers. This law which resulted in huge reductions in toxic exposures to citizens simply because there were right-to-know requirements that flowed if there were exposures that had not been otherwise known about. So, I think that there are many lessons that we can learn from innovations at the State level and many success stories that could be told, certainly more than can be told in a 2-hour hearing. There are a couple of very important principles that need to be taken into account in developing cooperative federalism at the Federal level. First of all, we need to recognize that there is huge variation among the States. You have on the panel today represented some of the leaders in State innovation and in going beyond what minimum Federal requirements there are. Unfortunately, there are many followers and there are even some that oppose Federal standards or even oppose going forward with many of the basic environmental protections and health protections that are necessary. We need to keep that in mind. Second, obviously, there are many reasons that States have a very important role to play. First of all, as has been mentioned, they have greater local knowledge of environmental conditions locally, very often. They have more resources and expertise and political support locally than the Federal Government does often. They also have more local political knowledge, which can be extremely important. As has been mentioned, they are the laboratories of democracy and often can be very innovative. However, there are certainly some countervailing principles that have always been important to consider. For example, it has been mentioned that some States can be susceptible to brown mail, where a large, powerful company tells a State that if the State cracks down on it, it threatens that it will see fit to move out of the State, move its operations elsewhere. Second, there is a concern about inaction by some States on very basic public health problems. Mr. Kucinich mentioned the cryptosporidium issue where there have been disease outbreaks, yet many States, in fact, virtually all States, if not all States, failed to adopt any standards for cryptosporidium until they were federally required. There are underground storage tanks and other examples where States did not act until they were federally required to do that, for many reasons. Very often it was for lack of resources and other reasons. Third, the level playing field is very important to many States. There can be a race to the bottom, certainly not by all States, but some States trying to attract business or trying to avoid political problems will go ahead and adopt less stringent standards. Probably one of the better-demonstrated examples of that is where 19 States have adopted laws that prohibit the State from going beyond the Federal minimum requirements. So, there are many reasons that we need to make sure that there is a so-called Federal gorilla in the closet. Someone there at the Federal level that can help State officials who are trying to do their job by giving them someone to point to-- Federal presence--to make sure that they can do their job well. Many recent examples of polluter lobby groups trying to cut State regulatory agency funding simply because they are trying to reduce the State's ability to take regulatory enforcement action are additional examples of the need for a Federal presence. So, we do believe that States have an important role, that they should and must be innovators and that the Federal Government has an important role in encouraging that. The Federal Government needs to set national standards and set health goals, and in addition, some minimum safeguards for citizen participation. But States should be free to go beyond that and certainly should not be preempted from going beyond that. Thank you. [The prepared statement of Mr. Olson follows:] [GRAPHIC] [TIFF OMITTED] T4705.096 [GRAPHIC] [TIFF OMITTED] T4705.097 [GRAPHIC] [TIFF OMITTED] T4705.098 [GRAPHIC] [TIFF OMITTED] T4705.099 [GRAPHIC] [TIFF OMITTED] T4705.100 [GRAPHIC] [TIFF OMITTED] T4705.101 [GRAPHIC] [TIFF OMITTED] T4705.102 [GRAPHIC] [TIFF OMITTED] T4705.103 [GRAPHIC] [TIFF OMITTED] T4705.104 [GRAPHIC] [TIFF OMITTED] T4705.105 [GRAPHIC] [TIFF OMITTED] T4705.106 Mr. Ryan. Thank you, Mr. Olson. Last, but not least, we have Mr. Recchia, the deputy commissioner of the Vermont Department of Environmental Conservation. Mr. Recchia. Mr. Recchia. Thank you, Chairman Ryan. Thank you very much for the opportunity to be here, Representative Kucinich and Representative Sanders. I appreciate the invitation and I am very pleased to be here. As Commissioner Studders has pointed out, I am a cleanup hitter, so I get to say all the things that I don't think have been said yet. But, to be honest with you, I think most of the things have been said. I think knowing my colleagues here and working with them on ECOS and on the Ozone Transport Commission and a variety of other groups that are trying to address State's interests and how we manage our environmental programs, I would say that we have much more agreement than we do disagreement. That said, I think a couple of points really do need to be made from Vermont's standpoint and I wanted to give you that perspective. In addition to being the deputy commissioner of Vermont's Department of Environmental Conservation, however, I am here representing also NESCAUM, which is the Northeast States for Coordinated Air Use Management. It sounds a lot better in acronym form than it does when you say the words. That is New England, New York, New Jersey, basically trying to coordinate their air use management programs to achieve the best level of performance we can. We have been successful in moving forward on joint air issues through this organization. Really, as we cross into the 21st century, I want to emphasize that we should be and we are celebrating, really, three decades of environmental awareness that has been founded in the recognition that there is an important Federal regulatory role to be played in protecting our health and the environment. This has not always been an easy relationship. It is surely an understatement to say that the State and Federal relationship is certainly a complex one. I guess in this discussion I would urge us to remember that innovative and flexible is not necessarily the antithesis of command and control. They are not mutually exclusive. They can both work hand in hand and indeed, I think, although we have all struggled a little bit in trying to make it so, I think it has been working in that direction. So, I would ask us to remember that as we enter this debate and focus on how to best improve the next decade of environmental management that we recognize that even in hindsight very few in government or in industry would make the claim that the past 30 years of success in environmental management would have happened in the absence of these Federal laws and standards. They indeed have made a difference and I think it is important to acknowledge that. So, the debate really becomes improving our environmental regulatory system in the form of a pursuit to refine the role of the Federal Government and not replace Federal enforceable standards. With those introductory remarks, let me quickly turn to some areas where we in Vermont have been doing innovative programs and have had some successes working both with NESCAUM and independently, and then briefly describe to you where I believe the right emphasis should be on the Federal role and the State role in managing environmental resources. I will not go through in detail the examples that I have provided in written testimony. You will find them in a revised version in appendix A and B of the testimony that I am providing. Let me briefly tell you about one or two in air areas and then I would like to focus on some water and mercury issues that Representative Sanders alluded to. First of all, in terms of air issues, this is an example. The diesel regulation or control of large diesel engines has been a problem in the sense that we have been preempted by EPA, unintentionally, through the process of regulation and have required some creative work to figure out how to overcome that. Working cooperatively with a variety of engine manufacturers, EPA, and the State regulators, we were able to get, throughout the New England/New York region, various innovative efforts in place to voluntarily upgrade those diesel engines, well in advance of EPA. You will find details of that in the back of my testimony. In addition, we, too, have been working on what we call P4 pollution prevention in the permit process. I think Langdon Marsh recognized that and presented some of those examples in the context of the Oregon green permits program. Really, for Vermont I want to focus on two areas which I think exemplifies where the Federal role can help and where it can hurt. One is in protection of our watersheds and that was mentioned earlier as an option of where States can work. Certainly, even more so with air issues, the Federal Government can allow and support flexibility in the management of our State waters. We have developed a watershed improvement project that builds on local citizenry taking charge and taking responsibility for their water resources and supporting those uses, not only for themselves, but to take stewardship of them for the rest of the members of the State and the community. That is working very well. I piloted a program this year that is actually getting in the ground restoration work of rivers that have been damaged and degraded for the better part of 50 years. Now, a mechanism exists already to be able to get the support of EPA necessary to support these types of programs. It was mentioned earlier that it is through our Performance Partnership Agreements. That is a mechanism by which the EPA can provide and should provide State flexibility for this type of work. The final example shows where Federal programs are still necessary and warranted. We have been working in New England very, very hard to address mercury pollution and proper management of mercury-containing wastes to protect public health and our water resources. Despite limited direct pollution sources, all of Vermont's waters are under fish advisories for consumption of certain fish species because of mercury contamination that comes from elsewhere. Now, we will do our part and we are willing to do our part and to step up to the plate and do that. We have worked very hard both with the other New England States and the Eastern Canadian Provinces to achieve a regional goal of virtual elimination of emissions of mercury. Nonetheless, all that work will be for naught if other States and areas do not step up to the plate as well. Now, our program is serving as a model, not only on the national level, but internationally we keep on hearing of people who cite our program, which is a little bit scary, but somewhat rewarding. I would just say that what that points out is that I think there are opportunities for States to design and implement innovative, cost-effective, and geographically relevant control strategies, but we can't do it all. In short, I believe there are four main areas where the Federal Government still has an appropriate role and should continue to work. Three of these are what I will call substantive and one of them is financial. The three substantive ones are: First, we must have the Federal Government setting minimum national standards of environmental performance. This does not mean providing a number of enforcement actions we ought to take. It is a true level of environmental performance we ought to be achieving. Two, provide research and technical support to support technology development. Three, we need their assistance and active participation in resolving interstate transport conflicts. As much as I enjoy working with all my colleagues from across the 50 States, it is difficult when we get 22 of us in a room to try and negotiate out how we are going to change the pattern of air polluting flow from West to East. Last, I would say the financial point again reiterates the need to work through the Performance Partnership Agreements to provide adequate funding to the States for the work you wish us to accomplish and let us be flexible in making those resources available to accomplish that work through the Performance Partnership mechanism. With that, I will stop. I thank you very much for your time and I look forward to answering any questions. [The prepared statement of Mr. Recchia follows:] [GRAPHIC] [TIFF OMITTED] T4705.107 [GRAPHIC] [TIFF OMITTED] T4705.108 [GRAPHIC] [TIFF OMITTED] T4705.109 [GRAPHIC] [TIFF OMITTED] T4705.110 [GRAPHIC] [TIFF OMITTED] T4705.111 [GRAPHIC] [TIFF OMITTED] T4705.112 [GRAPHIC] [TIFF OMITTED] T4705.113 [GRAPHIC] [TIFF OMITTED] T4705.114 [GRAPHIC] [TIFF OMITTED] T4705.115 [GRAPHIC] [TIFF OMITTED] T4705.116 [GRAPHIC] [TIFF OMITTED] T4705.117 [GRAPHIC] [TIFF OMITTED] T4705.118 [GRAPHIC] [TIFF OMITTED] T4705.119 [GRAPHIC] [TIFF OMITTED] T4705.120 [GRAPHIC] [TIFF OMITTED] T4705.121 [GRAPHIC] [TIFF OMITTED] T4705.122 Mr. Ryan. Thank you, Mr. Recchia. That is the 10-minute bell, so I think what we will do is briefly recess. The three of us will go vote and then come back as fast as we can and then we will resume questioning. So, the hearing will be recessed for 10 minutes. [Recess.] Mr. Ryan. The hearing will come back to order. I am very fascinated with the whole race to the top versus race to the bottom issue. I would like to explore that. But before I do so, I would like to ask some of the State officials about your particular problems in implementing your reforms and your programs vis-a-vis Federal regulations. Ms. Studders, you talked about your Project XL and you talked about a law you have which is basically lying dormant because of the inflexibility of a supposedly flexible program. Could you elaborate on specifically what Federal laws and regs have given you problems in exercising the discretion you need to benefit from Project XL? Is that a clear question? Ms. Studders. Yes, it is a clear question. I don't think I have the specific reg. I can tell you the language that is causing us trouble. Mr. Ryan. Sure. See if you can just give me the nature of it. Ms. Studders. I apologize. Mr. Ryan. That's OK. Explain the nature of the inflexibility. Ms. Studders. OK. I don't know the statute. There is terminology, and I am going to use quotes around this, called ``superior environmental performance'' that is in the Federal law. When the initial explanation was in the Federal Register, we felt we had some creativity that we could work with based on the preamble in the Federal Register. Ultimately, when EPA interpreted those regulations, their interpretation was narrower than ours. Literally, it is requiring companies to provide a guarantee if they try to do something that there will be ``x'' percent reduction of pollutants. When you are out there on the front edge and doing something for the first time, it is very difficult to provide a guarantee. That is my understanding of the issue. Mr. Ryan. So, it is difficult to get the thing off the ground in the first place? Ms. Studders. Well, the guarantee piece. If you can't honor the guarantee, then EPA doesn't want you to go forward. I can tell you that most States will have to get similar legislation in place in order to participate in something like this. But absent some tweaking at the Federal level, it is where the partnership is really critical, that both the Federal Government and the States together work on this one. Mr. Ryan. OK. Thank you. Mr. Seif, you mentioned the Federal liability problems with the brownfields. Specifically you mentioned that Federal Superfund liabilities are discouraging companies from participating in your State brownfield redevelopment programs. What do the Pennsylvania business and community leaders tell you about this problem? Would eliminating or reducing the threat of Federal enforcement at sites cleaned up to Pennsylvania standards significantly expand participation in your program? What have been the roadblocks you have faced in trying to get these sites cleaned up? Mr. Seif. We are facing fewer as time goes on. I think earlier on when our program was new--it was signed into law in the summer of 1995--there was a great deal of concern that if you did everything we asked you to--and it was laid out clearly about what you should do and that was one of its advantages compared to Superfund--you still might look at Superfund as a threat. If you don't have a finality to a business deal, you don't have a business deal. You can't bank on an uncertain time period or on a certain amount of money. Our statute provides that. The feeling was that the Federal Government could come in, or the regional office or Washington, and say, ``It is not quite how we like it. Let us start over.'' I think as time has gone on, and now upwards of 35 or 40 States have brownfields laws and you have an EPA alert to the harm it can do to an essentially functioning State program, there is more forbearance. There are also more practitioners, whether they are legal or consultants or landowners or redevelopment authorities that are willing to go through the State process and have less fear of a potential Federal intervention. It is still probably a good idea, however, to see some statutory reform of Superfund--if we can't get the whole thing reformed, which would be, of course, Tom Ridge's first choice-- to at least provide some kind of safety, some kind of borderline between Federal and State jurisdiction in this area. A great deal has been debated about what that language would be, but I would say the need for it is somewhat diminished over the years, but probably still important to have. Mr. Ryan. OK. Mr. Recchia, I wanted to examine something you said that I found interesting. In your testimony you noted that while cost- effective retrofit technologies exist that significantly reduced emissions under your diesel program, States are substantially preempted by the Clean Air Act from taking large steps to reduce pollution from existing diesel vehicles. Do you regard this as an undesirable Federal intervention in State environmental prerogatives? Also, do you believe that the better alternative system would be to have EPA set performance-based standards or goals and then allow the States to develop their own technologies, instead of EPA dictating which States may use technology to achieve these goals? Mr. Recchia. Thanks. I would like to answer the second one first if I could, which is, yeah, I would agree with that. I think generally if EPA can establish scientifically based performance standards that we will do better in terms of being able to come up with innovative technologies to do this. The difficulty there, and I don't have an easy answer for it, is that for EPA to justify a scientifically based standard there have to be technologies out there that they can point to demonstrate ``This is achievable and feasible right now.'' That makes it very difficult to not point to a particular technology and say, you know, we think that is ``the best'' and most straightforward control and at the same time not be forcing industry to use that technology because that is what the standard was based on and they are usually on a timeframe that needs to implement it quickly. So, I don't know how you will address that concern. Generally, I think performance-based standards are a better way to go. Going back to the first question on the diesel emissions, I think that was an unintended consequence. I don't see that as, you know, EPA going out of their way to try and mess around with States' prerogatives. But I do think that between that and the engine manufacturers suing EPA, trying to get them to encompass a group of off-road diesel vehicles, which are basically all the construction equipment primarily responsible for a lot of the particulate emissions, into a rule that was meant to be dealing with on-road vehicles and successfully appealing that in court, that caused some of the tension there. I would call it more unintended consequence, but nevertheless, the Federal Government, by intent or otherwise, was preempting the ability to effectively move forward. Mr. Ryan. OK. Mr. Olson, I would like to ask you about that same exact point. What is your take on a gradual transition to a regime where the Federal Government establishes environmental performance standards based on the best peer-reviewed science, and then allows States to design their own implementation strategies and hold States accountable for the results? Here is what the best peer reviewed science say are the correct standards. You achieve the results. You employ and develop the technologies that work the best. What do you think about that approach? Mr. Olson. Well, I think it is actually the approach which is embraced in some Federal statutes. There are many examples, for example, parts of the Safe Drinking Water Act. EPA adopts standards which say, ``You do it however you want to do it, but you can allow no more than this level of a given contaminant in your drinking water.'' There are technology-based standards under the Safe Drinking Water Act. They similarly say, ``You do it however you want to do it, but however you do it, it has to be at least as good as this technology.'' So, there are some examples where that has been tried, and it can work. In the Clean Air Act and the Clean Water Act there are also examples where EPA will set a basic performance standard, a new source standard, for example, and allow innovation to happen. My concern would be that a wholesale transition to that approach without having thought through what the implications are. A broad re-writing all the statutes, I think, certainly could upset the apple cart and retroactively impair some of the progress we have made. Mr. Ryan. I want to stick to the 5-minute rule so that everybody else gets a chance to ask their questions. We will do another round. I will yield to Mr. Sanders. Mr. Sanders. Thank you very much, Mr. Chairman. I think this is an interesting and important hearing. I think there should be very little disagreement that States should be learning from each other and that the Federal Government should be learning from the States. The more ideas that are out there, the better it is. I think we need to improve our cooperation. Let me start off with Mr. Recchia, if I might, with one question. Then, others please jump in. Do you believe that we need to end the Grandfather Clause in the 1970 Clean Air Act for fossil fuel power plants and if we did, what impact would this have on the Northeast, including the State of Vermont? Mr. Recchia. I think that is a very critical area for Vermont. In particular, we are the only State in the region that is in compliance and in attainment for our ozone levels. But we are just barely in compliance and we are just barely meeting our particulate matter standards, through no fault of our own. The issue here is, you know, we talk about the race to the top and the race to the bottom. The bottom line is, factually, these plants have been around for 30-some odd years, have been going forward and not putting on a level of control that the rest of us are putting on in our own region and yet we are the recipients of those emissions. This is a perfect example where the Federal Government needs to establish the minimum performance level that is going to be necessary, the minimum limit of emissions that are going to be acceptable. Mr. Sanders. So, I am hearing you say that you think that we should eliminate that Grandfather Clause? Mr. Recchia. Yes. I am sorry. I should have just answered the question, right? The answer is ``Yes.'' Mr. Sanders. Are people in agreement with Mr. Recchia or is there disagreement? Mr. Seif. I would definitely like to agree with Mr. Recchia and point out that Pennsylvania was the first or among the first States to deregulate electricity. So, we have the anomalous and economically unfair situation of having Pennsylvania power plants produce power with pollution under very tight controls, that is the Northeast Ozone Transport Region, and then facing competition from power plants producing them without such controls and sending the cheap electricity to compete with us and the even cheaper ozone to jack up our monitoring numbers. What is wrong with this picture? The level playing field doesn't exist. Mr. Sanders. Do I hear any disagreement with the need to end the grandfather clause or are we all in agreement on that? Ms. Studders. Representative Sanders, Minnesota is in complete agreement. We have even gone so far as to send EPA a letter asking EPA to take action in this area. With all the work that is going on with electricity, this definitely is a national issue that we need help with. Mr. Sanders. OK. Thank you. Let me ask another question if I might, a similar one. What are your feelings about the need to strengthen CAFE standards and put an end to the loophole for SUVs, minivans and pickup trucks? What is your view on that? Do you think we should strengthen CAFE standards? Mr. Marsh. I am Langdon Marsh from Oregon. The States played a very strong role over the last couple of years in encouraging EPA to go as far as possible in eliminating the differentiation in emission controls between SUVs and other light trucks and cars. EPA did adopt some very good regulations in 1999 to require for much cleaner cars starting in 2004 and also to establish lower sulfur in gasoline fuel standards starting in the same year. That was a major victory, I think, in terms of national standards. I don't have any specific background myself on the CAFE standards, but I think it is that type of cooperation that is going to be necessary on a number of fronts, including off-road engines, both diesel and non-diesel and on issues like corporate average fuel efficiency. I think that issue could be moved forward. Mr. Hackney. Congressman, may I jump in on that? In this respect, I am not speaking for NCSL, but as an individual legislator from North Carolina. I think that we need to take a larger view of both the questions that you have asked and move beyond that to ask what do we want our air to be like in 50 years or 40 years or 30 years? How do we want our rivers to look like then? When I said in my testimony that we need to take the next step, what I meant was let's do some serious thinking about how we want the environment it to be. In my State we are working really hard on air quality problems. But even though we are moving to low-sulfur gas and there is hope on the horizon for air quality because of all the improvements that the Congress has put into effect and that we have done locally as well, the vehicle miles traveled are going up so fast that it may not make any difference in helping out with our air quality. So we need to take a long, serious look as we begin the 21st century as to what our air is going to be like in 25 or 50 years. We need to do some serious planning about that. You have mentioned two specific areas which are very important. We need to move ahead. Mr. Sanders. You mean look at transportation as a whole? Mr. Hackney. Yes. Mr. Sanders. Do I have time for one more question? Mr. Ryan. Go ahead. Mr. Sanders. This question is a little bit outside of the scope of what we have been discussing, but it concerns me a great deal. It is a very serious problem in Vermont and I suspect in your States as well. There seems to be an epidemic of asthma in this country. I know we have many kids from the State of Vermont who need inhalators and nurses have inhalators in schools. Is there a serious problem in your States? What is your judgment as to the cause of the problem and what are your States attempting to do to address the epidemic of asthma? Mr. Seif. If I knew the cause of the asthma problem, of course, I would be investing in whatever company I sold that solution to. In terms of whether there is an increase or not-- -- Mr. Sanders. Is there a serious problem in Pennsylvania? Mr. Seif. Of course. Mr. Sanders. A growing problem? Mr. Seif. Especially with younger people and other kinds of respiratory problems with other people who are at risk or indeed the general public. The mix of indoor chemicals, the mix of unsafe buildings, buildings that aren't green, the kinds of activities that people are involved in. They are not as athletic as they used to be and sometimes there may be an issue there. We are also hearing that there may be a rise of asthma vulnerability because of the extensive use of antibiotics in our medical history in the last 30 to 40 years, that is, a reduction of the amount of immune capacity in systems so that vulnerability to asthma is heightened. It doesn't have anything to do with what is external in the air. It could be the same amount but a heightened vulnerability. But we do have to have transportation controls. We do have to have a national fuel strategy and a national CAFE strategy. Whatever it is, it should be national. It is uniquely a national issue. Mr. Sanders. What about indoor air quality? You started off by talking about that. Mr. Seif. That is a very important issue. Mr. Sanders. Is that something Pennsylvania is doing much on? Mr. Seif. We have done a fair amount on it. We are building and have just cut a ribbon on a new green building. It is so environmental efficient that it sells power back to the grid. Mr. Sanders. Do you help schools? Mr. Seif. Yes, we do. Mr. Sanders. Do you provide funding for schools that want to clean up their ventilation and so forth? Mr. Seif. Yes, and we are building it into State bidding standards or standards for grants to school systems to make buildings green in energy efficiency. Mr. Sanders. For schools to get funding from the State they have to have certain types of standards; is that what you are saying? Mr. Seif. Or head in that direction. The fight is on. Mr. Sanders. I won't tell the chairman that. Do you have other comments on asthma? Mr. Hackney. Well, again, speaking individually and not for NCSL, in North Carolina I introduced the mobile air emissions bill. This last time we had hearings we had an emergency room physician from UNC Hospitals in Chapel Hill come in. On the days when the ground level ozone levels were very high the very young and the very old show up at the emergency room. It is a serious problem. So, the answer briefly is yes. Mr. Sanders. OK. Are there other thoughts on asthma? Mr. Recchia. If I could tie it back to the diesel emission issue, that was one of the most frustrating parts about some of the diesel issues because we were trying to work with the non- road vehicles in urban areas, Boston, for example, when they were doing the big dig. In New York City, obviously, asthma issues are significant in an urban area like that, at least the reports are that they are increasing dramatically, even beyond what we are experiencing in Vermont. So, you know, to be able to get cooperation to control those vehicles and get them retrofitted because, you know, they were going to be onsite for 2 or 3 years, was very important. Ms. Scarlett. Perhaps I could loop this back to the discussion of State innovations in general and make the following comment on the several questions you have asked, which have really been about whether we are clean enough, safe enough, healthy enough with our standards, and say that I think you have heard concurrence that, you know, environmentalism is a journey, not a destination. We are not at that final destination and there are many unattended problems. But the issue is not just do we need grandfathering and do we need CAFE standards, do we need greater standards or changes emission control requirements? It really does get back to, in any event, how does one do this? On the grandfathering, for example, it is not just ought those facilities to be grandfathered, but the question is how is it that they are going to be enabled to achieve those goals and, for example, will they and other facilities who are already regulated still be faced with a source-by-source--for example, best available control technology--rule, which sometimes inhibits them from looking facility-wide at all their sources and optimizing their reduction across multiple emissions. A case in point is in Florida, with an electric utility who had a non-BACT technology which would have reduced multiple emissions across the board, albeit for one of the emissions not quite as low as the BACT technology. But the question is do we want this multiple ability to address all sources? Then on the SUV issue. I chair for the State of California the Inspection and Maintenance Review Commission, which oversees and evaluates that program. One of the challenges we have is that the SIP process, the State Implementation Plan process, in a sense is kind of an up front and modeled exercise, that is a State develops a series of programs it is going to implement. Attributed to those programs are certain kinds of modeled guesses at what reductions will be achieved, and EPA approves up front or does not approve up front, as the case may be, that plan. So, some States don't get credit for programs that they want to implement which they think have a good chance of reducing emissions, California being the case in point with some ideas that it has on that front. Then again to the asthma issue, as for example the State of Texas grapples in Houston, grapples with its problem. One of the challenges is that many of the remaining emissions, particularly the ozone forming emissions, are from small sources, dry cleaners, bakeries and so forth. This is what we grapple with in California. The question is do you try the permit-driven approach with a kind of BACT technology, where you have to have this smoke stack scrubber approach, or do you try, for example, what Illinois has done with its Clean Break Amnesty Program, which is to say, ``We know you as a dry cleaner don't have on your staff an environmental engineer. Let us help you understand the problems and solve them.'' So, let us not separate the standard from the ``how,'' which I think is a lot of what the State innovation discussion here is trying to get at. Mr. Sanders. Mr. Chairman, thank you very much for the extra time. Mr. Ryan. I would like to get back to the whole idea of this race to the bottom, race to the top notion. I would like to engage Ms. Scarlett and Mr. Olson first and then the rest of the witnesses. Ms. Scarlett, you wrote a study called ``Race to the Top, the Innovative Face of State Environmental Management.'' I take it that you do not believe that the States, if allowed greater autonomy and discretion in setting environmental policy would engage in a race to the bottom. Could you explain why? Similarly, what we have heard just from witnesses here today is that there are innovative, exciting programs out there in the States right now under the current kind of regime. If these things are happening right now, where is the problem? Please address these two issues. Ms. Scarlett. OK, well, let me try to make it brief. I don't want to be Pollyannaish and suggest that there is never any challenge, that there aren't some ill-deed doers out there, whether it is an individual firm or a State itself that has made fewer investments in environmental protection than others. Certainly, that occurs. But there are several reasons to think that we are more in an era of race to the top rather than race to the bottom. One is that most American citizens at this point, 85 percent, when asked, say ``I am an environmentalist.'' Remember that environmental laws don't spring from nowhere. They spring from constituent interest. That interest resides not simply at the Federal level but at the State level and fairly strongly. Second, remember too, as several of the Congressmen pointed out, that State legislators are often closer to those constituents than one is often in Congress. So, when things are bad, I think that Jim Seif next to me will say that he hears about it. He hears about those environmental problems and fairly quickly, whether from environmental activists and/or from other members of the public. So, that general psyche is out there. It is driving in the direction of race to the top. Now, is this merely hypothetical? No. What we have tried to do is to document what is going on. You have programs like the Massachusetts Environmental Performance Program. They had a dry cleaner and a photo processor program. Through that program they achieved a 43 percent reduction in perchlorethylene emissions, 99 percent reduction in silver discharges. You have the brownfields programs. You have heard several of the State innovators mention them, but in a very short number of years you had Pennsylvania cleaning up-how many sites is it now? Mr. Seif. 777. Ms. Scarlett. You had Illinois with over 500 brownfield sites cleaned up. Mr. Ryan. You guys did better than---- Ms. Scarlett. But this is actually what you have going on to some extent, a competition to do better. So, I think that observationally and empirically we see improvements. Mr. Ryan. Right. It is great to see the competition among these brownfield programs. Mr. Olson, I want to ask you because I was intrigued by something you said in your testimony. I can't remember the number you mentioned. I think you said 19 States adopted at least one statute prohibiting their State environmental regs from being any more stringent than existing Federal regs. Mr. Olson. Right. Mr. Ryan. And that is to buttress your point that you believe a race to the bottom would occur if States were given more autonomy. Isn't that kind of a one-sided point of view? I mean given what Ms. Scarlett just mentioned, also given the Council of State Governments' finding that 80 percent of the States have at least one clean air standard that exceeds the Federal minimum? Isn't there more to the picture than just the fact that these 19 States have these regs out there? Mr. Olson. Sure there is. I guess what I would say is if you lifted all the Federal laws right now, environmental laws, and I know nobody is suggesting that, but if you did, I think as soon as the gun went off there would be a race in both directions. Some States would race forward and some States would race backward. It would probably depend on the program. There are significant pressures to weaken standards, and I am sure the State representatives here would tell you that there are significant pressures. In some cases you have a major employer or a major industry who is threatening to move out of the State. There are many other reasons that there are pressures for States to go below the Federal standards. I would be happy, for the record, to submit examples where States in fact are not currently living up to minimum Federal standards. Mr. Ryan. Do you think that may be partly because of the prescribed technology they have to have or do you think they just won't do it because they want to attract the business? I think it is going to be one of these issues where you probably have to go on a case-by-case basis. Lynn just gave us an example where companies had different technologies that would have worked better, but Federal law mandates BACT technologies that are inferior. I think that is very complicated. It is tough to paint that one with a broad brush. Representative Hackney, did you want to make a point? Mr. Hackney. I want to say that I think the reason you hear so much unanimity today on keeping strong Federal environmental standards, is that the examples quoted by Ms. Scarlett and by Mr. Olson are substantially correct. You can find, if you look, places where States have not done as much as they should. You can find, if you look, a lot of places where States have done wonderful things. So, we take the position that policywise that States need the Federal backup, the Federal standard, but with the flexibility to do better and maybe do it in different ways. Mr. Ryan. Yes. It sounds like a case is being made across the board for performance-based standards with autonomy and discretion to go find the best way to meet these standards, find the best technology to accomplish those goals. If anybody disagrees with that, please speak up. I wanted to ask you, Ms. Studders, a quick question. This is an interesting chart you showed us, your geographic breakdown. It is very intriguing that you decided to use a regional approach to configure your agency and controls instead of the silo approach. Is that being done anywhere else and have any of your State counterparts consulted you on doing that? Have you run into any kind of Federal barriers in trying to implement this restructuring? Ms. Studders. I might be corrected by one of my peers who have more time than I. I think Wisconsin did a similar reorganization, slightly different, but geographically based. To my knowledge, we are the only two States that have done that, Congressman. What is different about it or what we have found that is so successful is that we are at the source of the problem. I will be honest, the northern part of my State is mining and it is recreational lakes. The skills of the scientists that I need in the north are very different than the skills I need dealing with feedlot operators in the southern part of the State of Minnesota. In the Karst area, which is southern Minnesota, I know several other States here have the Karst dilemma, which is geology that allows pollution to move very rapidly without knowing where it is going to go. I need experts in the southern part of the State who can deal with that. Where I can tell you that we have had some difficulty, and I will be honest on two fronts, the Federal Government and the entire environmental protection system that we are all speaking about today was created in reaction to crises. We created the Clean Air Act when we had air pollution problems; the Clean Water Act when we had a couple of rivers on fire. The unfortunate part is that you can have staff working in a program in the air area and they don't talk to their counterpart in the water area. That is how you come up with these major enforcement dilemmas that hit the headlines of the paper and they say, ``What is the environmental agency doing wrong?`` When you are arranged by those silos, as I literally refer to them, there is no reason for the air people and the water people to talk to one another, share their information, find out if they maybe have a problem company that they need to sit down and talk about. With our new organization, my staff that are hydro- geologists, that are scientists, that are working in the air, water, the brownfields and the remediation area are on a team working on a facility. They are able to holistically look at that facility and prioritize what we need to do first to get that facility into compliance. So, we are looking at the environment. We are not just looking at a permit regulatory requirement. Mr. Ryan. That is fascinating. Ms. Studders. It is tough, though, when we are trying to interact with the Federal Government and other States. My comment to my staff is we have to make it hard on us and easy on everybody else. Mr. Ryan. That is interesting. Go ahead. Mr. Seif. That is food for thought in that regard. EPA is also ``siloed'' and it does affect, in the same way as Karen has described, their overall stewardship of the environment and the Nation. We also have a very heavily regionalized EPA. Richard Nixon thought in 1970, let us have these 10 standard Federal regions and all Federal agencies were supposed to go with that arrangement. Only EPA has stuck with it; everyone else has gone back to different arrangements--whether better or worse I don't know. EPA is very heavily regionalized and that increases, I think, some institutional myopia in terms of dealing with programs. The very successful Chesapeake Bay Program, the Great Lakes Governors and others have organized around very natural boundaries called watersheds, the boundary that God made. That works a lot better. We hope in Pennsylvania to go in that same direction. Mr. Ryan. Mr. Marsh and then Mr. Recchia. Mr. Marsh. Yes, I think just to supplement what my colleagues have said, many States have regional offices. I am not sure that they are specialized to the same extent as in Minnesota and Wisconsin. But there is a movement, very definitely, to bring environmental agencies across the board out to work with local communities and watersheds, in neighborhoods in urban areas, to try to focus on holistic programs at the local level. This is causing the need for significant cultural change within the State agencies. I think one of the difficulties or lags, if you will, is that the EPA in either the headquarters or the regional offices are not quite there yet. I think one of the promises of the performance partnership process is to bring the Federal agency, EPA, in particular, down to the regional problem-solving level where I think most of the States are going. I think a lot of the successes we are seeing in overall improvement in environmental results are at the watershed and regional air pollution levels. So, I think one of the challenges for the next number of years is bringing all of the resources to bear to solve problems more comprehensively. Mr. Ryan. Mr. Recchia and then Ms. Studders. Mr. Recchia. Thank you, Mr. Chairman. I would actually like to go back to an earlier topic if I could and just touch briefly on the race to the bottom issue again. I generally agree with Lynn that we are moving in the other direction, in general. But I think there is a potential with deregulation to go the other way. I would offer you a thought about how to maybe correct for that, using, if you will, market forces and the constituents that Lynn had mentioned. You know, generally, the public is interested in holding people accountable for good environmental performance. That is a wonderful asset in Vermont and I have no reason to believe it is not true around the country. What that means is the constituents need to know what the environmental performance of those groups are. In other words, there has to be some sort of environmental performance measure or standard index or indices, if you will, of how, if I am producing power in Vermont from a hydroelectric dam, how that equates environmentally to someone producing power out in a Midwestern State from a coal-fired power plant. So, these constituents need to be able to see that. I guess I would offer the same issue on the mercury front. You know, part of the frustration from the region's standpoint is we feel like we are doing a part that the Federal Government should be doing in the form of dealing with consumer awareness of mercury in products and package labeling and things like that really, ideally, would be done on a Federal level. That is the kind of partnership that I think works well. I could explain to you all the great things we are doing on mercury control in our State from the regulatory to the voluntary, but on these broader issues, and particularly on air issues, as you will see, we need more national presence and consistency to help level the playing field. Mr. Ryan. Ms. Studders. Ms. Studders. Thank you. I wanted to supplement the question you had asked in light of what some of my peers here had said to you in responses. We have a contract between the Minnesota Pollution Control Agency and EPA, the Environmental Performance Partnership Agreement. It is a 2-year contract. Not all States have it. I apologize, I do not know the number of States that have that contract. I think it is around 30, but I am guessing at that number. In that we set up expectations of what the State is going to do and what the Federal Government is going to do. To supplement what Secretary Seif said, one of our dilemmas is, we can negotiate that in good faith with EPA and the staff that do the agreement can come to agreement with our staff. When we run into barriers is when it goes into the EPA structure, into the different silos, into the air program, the water program, and the land program. They have specific measurements they want in that contract. They aren't environmental measurements. They are the old style measurements that I spoke about. That is where one of my messages on flexibility is. We have to start looking at that whole body of water, that whole air shed. We have to because just that one indicator doesn't tell us if we are doing our job well. Mr. Seif. There is an even worse silo at EPA than the media--air, water and so on. It is more like a black hole. It is enforcement. OECA pollutes other portions of the agency that have great ideas, great ideas for flexibility, innovative and so on. You can always count on an OECA lawyer or a DOJ lawyer to say, ``Oh, we can't do it that way because in 1982 we did it a certain way.'' I believe the EPA is actually the conservative among the players you see simply because the culture of the agency is that way. It was effective, it was exactly how you would want them to be in 1975. You don't want them to be that way in the coming 10 years. Mr. Ryan. That is interesting. Ms. Scarlett. Ms. Scarlett. I would like to just kind of loop this together in the barrier issue, and then make what I think is perhaps a constructive suggestion. One of the things that Minnesota faced, and other States faced, as they have tried to move to a more holistic and regional approach, is a lack of clarity between the relationship of the old silo-by-silo permits and the new facility-wide or industry-wide or holistic permits that Minnesota and others are exploring. It is a lack of clarity, not a slam-dunk. Obviously, some States have managed to move forward with these endeavors. But a Federal or congressional authorization that made that somehow clear, I think, would be something worth examining and exploring. Second, and also related, there is a mismatch between the reporting requirements, the permit-by-permit reporting requirements, and the more holistic environmental performance indicators that Florida, Oregon, New Hampshire and others are moving toward. So, if there were a way, again, to reorient the Federal focus on performance indicators that mesh with these new directions, I think that would be fruitful. Now, one constructive thought on thinking about the race to the bottom and the race to the top and how does one grapple with the fact that both are obviously possible, and that is to take again a page from the States, the Green Tier Permitting Program in Oregon and also that in Wisconsin, which actually has tiered permits. One could take, for example, the current NEPPS agreement and develop a congressional kind of authorization whereby those States that have NEPPS agreements and have these compacts that have performance requirements in them are then essentially fully responsible for permitting an enforcement and only held to the test periodically on ``are you achieving real results?'' Those States that either do not want the delegated authority, do not have a NEPPS agreement for whatever reason, could still remain in the old environmental regulatory regime. This allows us to move forward without jettisoning the past, if you will. So, it is something to think about. Mr. Ryan. Sure. That is a very provocative way of putting it. Mr. Sanders. Mr. Sanders. Thank you very much, Mr. Chairman. I just have two questions. I don't think there is any disagreement that there are some areas where the local and State government are better equipped to move and there are some areas where the Federal Government must play a very important role. You mentioned the word ``dry cleaning.'' I remember in Williamstown 20 years ago, a small town in the State of Vermont, we had a problem. The water was severely polluted. The State of Vermont could handle that. I don't think we don't need the Federal Government. On the other hand, it is reported that the hole in the ozone layer is now three times the size of the United States. There are, I guess, credible suggestions that causes skin cancer around the world. The State of Pennsylvania is not going to solve that problem, nor even will the great State of Vermont all by itself. Here is where you have a problem. Does anyone disagree that on areas like that the U.S. Government, along with the rest of the world, is going to have to play a very, very active role? That is my question. Ms. Studders. Congressman Sanders, from my perspective, in Minnesota we share a boundary with Canada. I don't just deal with State environmental issues. I am dealing with international environmental issues. Mr. Sanders. That is right. Ms. Studders. The environment is global. The water is all connected. I learned a statistic when I got this job that I will share with you because it shocked me. We know how China pollutes. The 10 most polluting cities in the world, air-pollution-wise, are in China. Mr. Sanders. That is right. Ms. Studders. The air, to get from China to Seattle, takes 4 days. It takes 1 more day to get it to Minnesota. So, we have to start thinking about the question that you asked earlier about what do we want our air and water to look like in the future. This is a global issue. Mr. Sanders. That is right. But you have no argument with the statement that this is not going to be solved at the statewide level. It is going to be a national and international solution. Mr. Seif. I think there is another spectrum along which we must think globally, that is geographic as has just been mentioned. But what goes up a stack is a soup of stuff. It is mercury, let's say. Here I go, I can see Marlo Lewis getting ready. That fact is, to be inflexibly against the regulation of CO2, in a power plant stack, while urging innovation and the like in the control of other kinds of pollutants, say mercury, is not quite realistic. It is not how power gets generated. It is not how planning gets done. It is not good engineering. It may be that there is a good legal case, I believe there is, that EPA doesn't have statutory authority concerning CO2. But if EPA is to be managed or overseen by the Congress in a flexible way, just as we would like it to oversee us in a flexible way, it ought to be able to work with us, with the Ozone Transport Commission, with individual States, with power plants, with power companies, with other nations, to work on all pollutants. It should work to develop technology, techniques, treaties--though I don't favor the one now before the Senate-- and other devises without having its hands sort of tied because someone just doesn't agree with a particular step it may have taken, or with its sometimes ``lead with the chin'' approach about the way it operates. The fact is flexibility is important from the Congress as well as from EPA to the States. Mr. Sanders. But having said that, you would not deny for a second that the Federal Government, in fact the international community has got to be actively involved in addressing this crisis situation? Mr. Seif. Actively and unfettered by particular agendas against particular actions that they might, or ought to, consider or at least research or think about. Mr. Sanders. Let me ask another question, my last question, if I might. I am curious. I don't know what the answer to this one will be. I think that around the country, although not in the U.S. Congress, I should say, there is growing concern about genetically modified organisms, the issue of labeling, the issue of long-term possible health effects is something that is-I will give you one example. There are some companies that are making new fish. I guess they have created a new salmon, which is two or three times larger than the old salmon we used to have. The threat is if that escapes into the waterways it could wipe out the specie that we know today as salmon. It is actually among ordinary people an issue to the degree that they know about it in Europe and there is a great deal of concern about this issue. Is that an issue that is on the agenda of any Statewide environmental agency? Chris. Mr. Recchia. Yes, I would like to respond to that because I probably feel more passionately about this than I ought to because it is sort of beyond the scope of my normal profession, but I will say it is very related to the mercury labeling thing I was just mentioning in the sense that I think that if you want to enlist people of ability to vote with their feet, if you will, or vote with their dollar or do any of that, they must be informed about this. It doesn't mean we have to have all the answers and know necessarily whether it is good, bad or indifferent. The fact that it is different and people have the ability to make their own judgments about it as time goes on, I think, is very, very important. I think it is very important for mercury-containing products, fluorescent light bulbs. If there is no alternative, fine, put the mercury in. But tell people that it is in there. They can judge whether that is good for them or not. Mr. Sanders. You are suggesting labeling of genetically altered products? Mr. Recchia. Genetically altered foods, I would say the same thing. I don't think any of us, at least no one in my profession I know of would sit here and say ``We know all the answers to environmental problems. So, you don't really need to know that, ladies and gentlemen, because we will take care of it for you.'' I think that is very patronizing and presumptuous and I think that we ought to simply inform people of the range of things they are ``concerning.'' Mr. Sanders. Are you supporting Federal legislation or State legislation? Mr. Recchia. On this type of thing I would support Federal legislation for the same reason I would support Federal labeling of mercury-containing products, etc. Mr. Sanders. Yes, Ms. Studders, go ahead. Ms. Studders. If I could do a friendly amendment to what Vermont is suggesting. In Minnesota, we have an organization called the Environmental Quality Board. It is comprised of 10 agencies in the State and five citizens. Our job is to oversee environmental policy, particularly where it crosses into different agencies. I am going to give you an example of your question with GMOs. There are health departments in the United States that have some jurisdiction over that. There are agricultural departments that have jurisdiction over that. There are departments of natural resources or U.S. Fish and Wildlife that have jurisdiction, as well as the Environmental Protection Agency. You have hit on a perfectly good example of why the old system isn't working for us. Our environmental problems today are crossing geography. They are crossing science. They are crossing different disciplines. I don't think you can say one agency has to do this. We need teams now. The genetically engineered organisms, I mean the impact is phenomenal, but I don't think one agency with its expertise can solve that. To the extent we can encourage that at the Federal level and not just give it to one agency, I really think that diversity is needed on issues like that. Mr. Sanders. That is a good point. Are there any other thoughts on GMOs? Mr. Marsh. I would just like to say that I would completely agree with the gentlemen from Vermont's suggestion that some kind of Federal legislation requiring labeling for genetically modified organisms in food would certainly make some sense, so people would know and they could make their own decisions. Mr. Sanders. Some of us are trying to accomplish that. Thank you. Mr. Chairman, thanks very much. Mr. Ryan. No problem. Let me just wrap up and ask a basic question of all panelists. Ms. Scarlett, you mentioned three legislative remedies that you thought might help promote State environmental innovation: amend existing environmental laws by including flexibility provisions, develop an EPA authorizing statute specifying congressional support for State environmental innovations, and develop a statute allocating resources to States based on their achievement of performance goals. In that context, I would like to ask everybody a question what do you think Congress ought to do? The purpose of having you here is to have you advise us. What do you think Congress ought to do to facilitate your ability to improve the health and welfare and environments of your respective States? What kinds of flexibility? What kind of things do you think we ought to focus on doing here? I will just start from left and go right. How does that sound? Mr. Recchia. It sounds not as good as starting from right and going to left. Mr. Ryan. It is your right and their left. OK. Mr. Recchia. But I will. I guess I think that I would agree with Secretary Seif. The weird part of the Federal administrative agency right now in terms of the level of cooperation and moving forward in a cooperative way is the Office of Enforcement and Compliance Assistance [OECA]. So, I would urge you to do something there. I think the other thing you could do, because I believe EPA wants to do the right thing and support us in these areas, is build in the flexibility for EPA to establish standards that are based on scientifically sound information that form the basis of health or environmental performance levels that we need to get to, but where there may not be technology out there to achieve those standards, and allow flexibility for people to see if they can innovatively get to that point. I think right now they are so hounded on both sides that they don't have any room and flexibility to move. I would also agree with Jim's comment about, you know, no one should be muzzled in doing the environmental work of this Nation and I would urge us to not have that type of reaction when we disagree. Mr. Ryan. OK. Thank you. Mr. Marsh. Mr. Chairman, I think that in addition to promoting and permitting flexibility by EPA such as they have done through the regulatory innovation agreement with the States, and I think there may be something that can be done to buttress that flexibility, I think that the resources are probably the major limiting factor for both the EPA and the States to be as flexible as they need to be. I think the business community in our State does recognize that if permits are going to be flexibly administered, you need to have the people there available to do it. Now, it is not all a Federal responsibility, to be sure, but I think that looking at the capacity of both the States and the EPA, through its regions, to work cooperatively and flexibly, there is an element of a resource question there that I think that Congress can address through its budget process. Mr. Chairman, I am going to apologize, but if I am going to get back to Oregon tonight, I have to leave right now. Mr. Ryan. Please go ahead, by all means. Thank you for coming. Mr. Marsh. Thank you very much for inviting me. Mr. Ryan. Mr. Walden sends his regards. He was stuck in another committee, but he wanted to come. Mr. Marsh. Thank you. Mr. Olson. I would make three points in response to your question. First of all, the Federal Government can and should be providing funding to States and to EPA's programs that are trying to encourage innovation at the State level. I think that is one of the most important things that the Federal Government can contribute. Second, it is very important to try to identify better measurements of performance. I don't know if you have looked through the GPRA reviews that EPA does or the so-called Government Performance and Responsibility Act. But many of those, frankly, identify things like the number of permits issued, which are important, but is that really what we are after? Perhaps what we ought to be focusing on is ways to identify actual environmental improvements and making those achievable through some kind of enforceable requirements. I do want to just highlight why OECA, which has been sort of whipped today, and other parts of the agency sometimes put the brakes on the flexibility that has been suggested. I don't know all the examples that may have been cited here, but certainly one person's flexibility can be another person's gutting of a requirement. The concern often is will this requirement be enforceable. Very often some of the proposed flexibility, which sounds good, can end up becoming almost unenforceable. You know, if you give a lot of flexibility to a Midwestern power plant that is belching a lot of pollution, is that going to end up being so much flexibility that you can have no enforceable requirements and it will end up polluting the northeast, Vermont and everywhere else? So, you know, that is obviously one issue that comes up frequently. Ms. Edgar. Florida would echo the comments of our sister States and colleagues regarding some of the difficulties that we have had trying to bring what we considered to be good ideas and innovative ideas and being stalled by OECA. We also would look for some ability to devote financial resources to problems that are identified, to priority problems rather than stovepipe distribution of funding sources. To follow on a comment by Ms. Scarlett earlier, many of the Federal requirements require States to collect reams of data on outputs that really are of marginal use in analyzing and understanding the outcomes of our environmental programs. So, I think direction from the Federal level, from Congress, from EPA to work with the States and help us with our data integration, help us with data quality, data standardization. As an environmental agency, data is what we deal in, data and science. In many instances we are dealing with incomplete data to help us do true assessment, but yet we are required to continue to report and to report and to report. So, again, we need some direction to help us standardize and be able to have indicators that help us with meaningful outcomes. Mr. Ryan. Thank you. Ms. Studders. Minnesota thanks you for this opportunity. I am going to give you seven suggestions that I really need. Some of them are echoed by my peers and in others I am trying to pull together a lot of what we said today. The first is we need statutory flexibility. What I would actually suggest is that you might want to think about a task force or a work group to sit down and talk about what specifically would be needed in that arena to help us with innovations at the State level. I think one of the things you need to understand is our existing environmental statutes do not allow us to function risk-free. When you are experimenting you need to have a safety net that you can function in. We need that. The second thing we have already touched on within OECA. I don't want to beat up OECA, but let me draw an analogy. Today, when I ask people, when something happens and they want to take an enforcement action, the first question I ask them is: ``What was the impact on the environment? What was harmed? What was hurt? What was lost? How serious is it? Is it irreversible? How long will it take to recover?'' That, to me, is a very vital question. When I am having a fight with OECA that is not even on the table. The concern I have is--again, it is not against them; it is the system they were set up to enforce that is 30 years old. Mr. Ryan. What is it? Is it process questions? Ms. Studders. Well, that inspection found this widget out of whack or this piece of paper not there or this many emissions too large and did not look at what was the impact to the environment. I could take a simpler example and it would go back to where we have had our dilemmas with Project XL in Minnesota. One of our examples was a major corporation in our State wanted to go forward early on with Project XL. Part of the reason they actually backed out and why we backed out of the project was because the Federal system was not able to give them credit for changes they had already made that were above and beyond regulatory and that had been done before the passage of a law. It is just literally the nitpicking of ``has there been something already done above?'' We don't get credit for what we have already done. So, if we are innovative and then a law gets passed down the road, there is no credit for that. Actually businesses that choose to be environmental leaders are being penalized under this existing system by OECA. That is what is problematic about it. The third thing has to do with funding flexibility. Not only do we need more money, but also we need money that we can move around to where the biggest environmental threat is. Right now there are so many strings attached to the money, it is very difficult for us to do. The fourth has to do with communication. That is one of my strong messages as Commissioner. There needs to be a better dialog between EPA and the State environmental agency. There also needs to be a better dialog, as Secretary Seif said, between the regions and headquarters of EPA. Often the right hand does not know what the left hand is doing. We at the States get to deal with both entities. That is tough sometimes when HQ says one thing and your region says another. Then you add the complication of the media--air, water and land--within the agency. That communication between the silos has to start happening. The fifth is that I would like to challenge that we need to do environmental regulation based on incentives as opposed to punishments. Let us think about it. Most of us in this room are parents or we have a niece or a nephew or a sibling who is younger than us. We think about what causes someone to change their behavior. It is not getting yelled at. It is not getting beat up. It is getting some positive reinforcement to do a behavior change. I would like to think that is the ``second wave of environmental protection'' we have to put out there, especially when we are going to start dealing with nonpoint source pollution. The sixth thing has already been touched on. EPA needs to look at how it is structurally organized. It worked. It is not working now. We need to look at the media issue. We need to look at the regions issue. I would like to challenge that we may need to take it apart. The final and the seventh one is data integration. I know there is an issue that is before Congress now. I believe it is a $30 million appropriation in EPA's budget. It is for data integration with the States. Let me tell you how complicated it is right now. Fifty of us have computer systems. Fifty of us keep the data differently. EPA keeps the data differently. We don't put the decimal in the same place. The data can't talk to the data. We are spending millions of dollars, probably billions nationally, on this data. And it is kind of useless right now. We have to standardize the system. That is an example where the Federal Government needs to help. But the Federal Government can't design that system without having the States at the table. We have to be there to tell you what our computers can and can't do. Do you know what? With this thing called the Internet we can put that data on the Web and then citizens can start making decisions to help us with the air, water and land because they will see it. It will all be reported the same way and we can be a better informed country. So, my last one has to do with data. Thank you. Mr. Ryan. Thank you. Mr. Seif. Everything that Karen Studders said is absolutely on target and especially, I think, the last one. Unless we start counting the right stuff and try to break down what reinforces the counting of the wrong stuff, which is bureaucratic culture, including mine. While I am here today giving advice on how other people should do stuff, my bureaucrats have done some very dumb things today. I don't know what they are. But I will find out tomorrow. That is because they are pursuing, under statutes or under EPA grant direction, or because of the silos that they have grown up in over 30 years in the agency, or because of external enforcement by environmental groups saying, ``If you are not putting people in jail, you are not doing the job.'' Whatever it is, we have to change what the goals are. Then the same bureaucratic behavior that we decry and love to bash and get headlines about will in fact serve the environment, if we can get them to count the right stuff. That is the key. I think Congress, frankly, could reorganize itself in terms of the committee system to give EPA--well, you asked! Mr. Ryan. Yes, I know. Let us have it. Mr. Seif [continuing]. To give EPA a much better chance of being responsible and responsive rather than perpetually jerked around in terms of what their goals are and in terms of what the oversight objectives are. A good place to begin, as Karen mentioned, would be the budget. But that is only after you handle the data systems, and in particular, please cough up that $30 million so EPA, which has the right approach in mind and has lots of State buy-in---- Mr. Ryan. Is that in the VA-HUD bill? Does anybody know? Ms. Studders. Yes. It is in their budget. Mr. Ryan. Is it in VA-HUD right now? Ms. Studders. I know it is in their budget. Mr. Seif. I don't know where it is. I am told it is in the Senate. You know, if the only tool you have is a hammer, every problem looks like a nail. OECA is a hammer. There are lots of other tools. If we could just incentivize and fairly count their use, it would make a world of difference. Mr. Ryan. Thank you. Ms. Scarlett. Well, Congressman Ryan, I have already mentioned a few, but let me just briefly repeat them. I do think it is worth considering an authorizing statute for EPA that would provide a vehicle to actually include clarification of the respective permitting authority between the States and the Federal Government. As I suggested, this doesn't need to be either/or. One could perhaps use a NEPPS style agreement as the mechanism to make that happen so that some States would still be under the old regime and some would enter the new. Second, I do think that one needs to think about a reorientation, perhaps, of resources toward data integration and development of performance indicators. It could be either resources to the States as they begin to work on those performance indicators. I find it ironic that we have been 30 years into our environmental regulation with so much emphasis on permits and process that we have actually unattended to those indicators and their development. Third, and relatedly, I think funding flexibility, we now do have some block grants that go to the States, but they tend to be silo by silo. So, again, there is not the opportunity for a State that has a water problem to use those resources for water. Instead they must use it for air, which might not, for example, be their primary problem. Then finally, and perhaps more controversial than any of those three, I do think there is a need to reorient--I don't know how this can happen. This is much more complex. I think there is a need to reorient Federal resources toward ongoing monitoring and actual performance--kind of ``the proof of the pudding is in the tasting; how did we actually do'' rather than up front second-guessing of program design. I think the SIP process is a classic example of that up front kind of preemption and second guessing rather than letting States say, ``This is what we want to do.'' Sign a compact, if you will, a Netherlands style compact. ``This is what we are going to do.'' Hold us to the test in 2, 3 or 4 years and if we don't succeed at that point, let us go back to the drawing board. But that up front process actually does keep off the table some very good innovative programs that otherwise might yield performance. Mr. Hackney. Mr. Chairman and members of the subcommittee, thank you for this opportunity. I want to start out by advocating something that you have just done, that we have advocated in our testimony, to establish a better and a more formal communication process between the State legislatures and the Congress. You have certainly started that today. I want to reiterate that. I do think it is a two-way communication process. I think it should be more formal. I think EPA should be intimately involved with it as well. Second, avoid mandates and preemption. Third, send money. Mr. Sanders. And cut taxes? Mr. Hackney. In particular I want to mention send university research money. I think those are some of the best environmental dollars that we spend. I mentioned earlier in my testimony that we have a hog lagoon problem in my State caused by the immense expansion of the hog industry. We have a lot of important cutting edge research going on at North Carolina State University and we are trying to learn what does and doesn't work. Then we are going to put it into effect. We certainly invite the Congress to help us with that, including helping us fund research. We have advocated rewriting the major pieces of environmental legislation in 21st century standards. That is to say, let us look far off into the future and decide what we want our country to look like in terms of the water and the air. Perhaps we need higher standards. Perhaps when we advocate for uniform national goals and standards we need to aim high. Thank you for the opportunity to testify today. Mr. Ryan. Thank you. Let me just finish up by saying thank you to everybody for coming up here. You know, I am a new Member of Congress here and I guess I didn't get the memo which said that I know everything now that I am a Federal legislator. But, I will tell you, there seems to be a bit of arrogance in this town that I have witnessed over the last couple of years. It is basically ``Don't let the facts confuse me. I know the answer and I am right. Here is the way it goes.'' Your ideas are something we need more of, this kind of interaction, this kind of evidence, these kinds of stories help us, in my opinion, to learn about what works, what doesn't, what did work but what doesn't work any more. These are the things that I think we need to hear about up here. I am going to encourage my colleagues to review this testimony. I hope that this hearing is the beginning of a dialog, an understanding. As you mentioned, Ms. Studders, we need a ``second wave of environmental protection,'' one in which we stop making the environment a partisan issue and emphasize getting things done and doing what works. So, I just want to say thank you very much for coming. Bernie, did you want to say anything? Mr. Sanders. I would just add my thanks as well. Mr. Ryan. I really appreciate everybody coming from such great distances. This hearing is adjourned. [Whereupon, at 5:27 p.m., the subcommittee was adjourned, to reconvene at the call of the Chair.] [Additional information submitted for the hearing record follows:] [GRAPHIC] [TIFF OMITTED] T4705.123 [GRAPHIC] [TIFF OMITTED] T4705.124 [GRAPHIC] [TIFF OMITTED] T4705.125 [GRAPHIC] [TIFF OMITTED] T4705.126 [GRAPHIC] [TIFF OMITTED] T4705.127 [GRAPHIC] [TIFF OMITTED] T4705.128 [GRAPHIC] [TIFF OMITTED] T4705.129 [GRAPHIC] [TIFF OMITTED] T4705.130 [GRAPHIC] [TIFF OMITTED] T4705.131