[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



 
                     THE EROSION OF COMMUNITIES BY
                   LEAKING UNDERGROUND STORAGE TANKS
=======================================================================


                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   HOUSING AND COMMUNITY OPPORTUNITY

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 12, 2002

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 107-81








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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa                 JOHN J. LaFALCE, New York
MARGE ROUKEMA, New Jersey, Vice      BARNEY FRANK, Massachusetts
    Chair                            PAUL E. KANJORSKI, Pennsylvania
DOUG BEREUTER, Nebraska              MAXINE WATERS, California
RICHARD H. BAKER, Louisiana          CAROLYN B. MALONEY, New York
SPENCER BACHUS, Alabama              LUIS V. GUTIERREZ, Illinois
MICHAEL N. CASTLE, Delaware          NYDIA M. VELAZQUEZ, New York
PETER T. KING, New York              MELVIN L. WATT, North Carolina
EDWARD R. ROYCE, California          GARY L. ACKERMAN, New York
FRANK D. LUCAS, Oklahoma             KEN BENTSEN, Texas
ROBERT W. NEY, Ohio                  JAMES H. MALONEY, Connecticut
BOB BARR, Georgia                    DARLENE HOOLEY, Oregon
SUE W. KELLY, New York               JULIA CARSON, Indiana
RON PAUL, Texas                      BRAD SHERMAN, California
PAUL E. GILLMOR, Ohio                MAX SANDLIN, Texas
CHRISTOPHER COX, California          GREGORY W. MEEKS, New York
DAVE WELDON, Florida                 BARBARA LEE, California
JIM RYUN, Kansas                     FRANK MASCARA, Pennsylvania
BOB RILEY, Alabama                   JAY INSLEE, Washington
STEVEN C. LaTOURETTE, Ohio           JANICE D. SCHAKOWSKY, Illinois
DONALD A. MANZULLO, Illinois         DENNIS MOORE, Kansas
WALTER B. JONES, North Carolina      CHARLES A. GONZALEZ, Texas
DOUG OSE, California                 STEPHANIE TUBBS JONES, Ohio
JUDY BIGGERT, Illinois               MICHAEL E. CAPUANO, Massachusetts
MARK GREEN, Wisconsin                HAROLD E. FORD Jr., Tennessee
PATRICK J. TOOMEY, Pennsylvania      RUBEN HINOJOSA, Texas
CHRISTOPHER SHAYS, Connecticut       KEN LUCAS, Kentucky
JOHN B. SHADEGG, Arizona             RONNIE SHOWS, Mississippi
VITO FOSSELLA, New York              JOSEPH CROWLEY, New York
GARY G. MILLER, California           WILLIAM LACY CLAY, Missouri
ERIC CANTOR, Virginia                STEVE ISRAEL, New York
FELIX J. GRUCCI, Jr., New York       MIKE ROSS, Arizona
MELISSA A. HART, Pennsylvania         
SHELLEY MOORE CAPITO, West Virginia  BERNARD SANDERS, Vermont
MIKE FERGUSON, New Jersey
MIKE ROGERS, Michigan
PATRICK J. TIBERI, Ohio

             Terry Haines, Chief Counsel and Staff Director

           Subcommittee on Housing and Community Opportunity

                    MARGE ROUKEMA, New Jersey, Chair

MARK GREEN, Wisconsin, Vice          BARNEY FRANK, Massachusetts
    Chairman                         NYDIA M. VELAZQUEZ, New York
DOUG BEREUTER, Nebraska              JULIA CARSON, Indiana
SPENCER BACHUS, Alabama              BARBARA LEE, California
PETER T. KING, New York              JANICE D. SCHAKOWSKY, Illinois
ROBERT W. NEY, Ohio                  STEPHANIE TUBBS JONES, Ohio
BOB BARR, Georgia                    MICHAEL E. CAPUANO, Massachusetts
SUE W. KELLY, New York               MAXINE WATERS, California
BOB RILEY, Alabama                   BERNARD SANDERS, Vermont
GARY G. MILLER, California           MELVIN L. WATT, North Carolina
ERIC CANTOR, Virginia                WILLIAM LACY CLAY, Missouri
FELIX J. GRUCCI, Jr, New York        STEVE ISRAEL, New York
MIKE ROGERS, Michigan
PATRICK J. TIBERI, Ohio















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    September 12, 2002...........................................     1
Appendix:
    September 12, 2002...........................................    25

                               WITNESSES
                      Thursday, September 12, 2002

Kanjorski, Hon. Paul E., U.S. Representative from the State of 
  Pennsylvania...................................................     2
Eachus, Hon. Todd, State Representative, 116th Legislative 
  District, Pennsylvania.........................................     6
Urban, Hon. Stephan, Commissioner, Luzerne County, Pennsylvania..     7
Bartsch, Charlie, Executive Director, Northeast-Midwest Institute    10
Harvey, William C., President, William C. Harvey & Associates, 
  Inc. on behalf of The Appraisal Institute......................    12
Tomsho, Patricia, Resident, Laurel Gardens Community, Luzerne 
  County, Pennsylvania...........................................    13

                                APPENDIX

Prepared statements:
    Oxley, Hon. Michael G........................................    26
    Green, Hon. Mark.............................................    27
    Clay, Hon. Wm. Lacy..........................................    29
    Israel, Hon. Steve...........................................    30
    Kelly, Hon. Sue W............................................    31
    Kanjorski, Hon. Paul E.......................................    32
    Bartsch, Charles.............................................    35
    Eauchus, Hon. Todd...........................................    45
    Harvey, William C............................................    48
    Tomsho, Patricia.............................................    60
    Urban, Hon. Stephan A........................................    62








                     THE EROSION OF COMMUNITIES BY
                   LEAKING UNDERGROUND STORAGE TANKS

                              ----------                              


                      Thursday, September 12, 2002

             U.S. House of Representatives,
 Subcommittee on Housing and Community Opportunity,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 10:04 a.m., in 
Room 2128, Rayburn House Office Building, Hon. Mark Green 
[acting chairman of the subcommittee] presiding.
    Present: Representatives Green, Kelly, and Frank.
    Mr. Green. [Presiding.] The hearing of the Subcommittee on 
Housing and Community Opportunity will come to order. Without 
objection, we will proceed, even though we do not have a quorum 
at this time. Our understanding is there may be a vote as soon 
as at 10:15. At least this way, we could get through our first 
panel and then go on to our second panel.
    Without objection, all members' opening statements will be 
made part of the record. And the chair will recognize himself 
for five minutes for purposes of making a brief opening 
statement, before introducing our first panel.
    Today, the subcommittee meets to examine the effects of 
leaking underground storage tanks on homeowners and 
communities. In 1980, the Environmental Protection Agency 
determined that this country was facing a very serious problem 
in that area.
    Many of the more than two million underground storage tanks 
in the U.S. were nearing the end of their useful life 
expectancy and were expected to leak in the near future. With 
over half of the United States relying on ground water for its 
drinking water, the fact that leaking tanks were the leading 
source of ground water contamination made finding a solution 
all that more critical.
    In 1984, Congress established a Leak Prevention, Detection 
and Correction Action Program to address this nationwide 
problem of leaking storage tanks. And in 1986, Congress created 
the Leaking Underground Storage Tank Trust Fund to help states 
cover the cost of cleanup.
    Much progress has been made in the cleanup efforts. The EPA 
estimates that since the Federal Underground Storage Tank 
Program began, 1.5 million of the roughly 2.2 million petroleum 
tanks under the program have been closed. As of September 30, 
2001, 419,000 releases have been identified; more than 279,000 
cleanups had been initiated; and nearly 269,000 cleanups had 
been completed; with 150,000 sites awaiting cleanup.
    Despite this progress, however, several important issues 
have emerged. With the implementation of the 1998 regulation, 
the workload for states has increased significantly. States and 
localities are looking to the federal government to provide 
additional resources to assist them in the cleanup and cost.
    The discovery of the chemical MTBE at several of the 
underground storage tank sites and its detection in drinking 
water supplies has further complicated cleanup efforts and 
added to the initial cost of the original program. Finally, 
many of the affected communities are looking to the federal 
government to help them deal with the effects that leaking 
underground storage tanks have on public health and home values 
in their community.
    While there is a program in place to assist with the 
cleanup of these sites, the federal government has no program 
in place to assist the innocent homeowners affected by these 
leaking underground storage tanks. Many of these communities 
will likely face the evaporation of home equity, a lack of 
buyers for the contaminated property and a scarcity of 
financial institutions that are willing to make loans in the 
contaminated areas.
    We all remember the well publicized relocation actions in 
Love Canal and Times Beach that were taken under special 
federal order or through the Superfund Program. Because 
Superfund explicitly excludes petroleum pollution, the 
residents in the communities affected by these tanks have 
little recourse.
    At today's hearing, we will begin to examine this problem.
    I will place the rest of my statement in my record. And at 
this time, we will recognize our first panel and invite Mr. 
Kanjorski, the Honorable Paul Kanjorski, to begin with his 
testimony.
    Mr. Kanjorski, welcome. Sorry to put you under the gun. But 
welcome. It is good to hear from you.

   STATEMENT OF HON. PAUL E. KANJORSKI, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF PENNSYLVANIA

    Mr. Kanjorski. First of all, I want to thank the committee 
for holding this hearing. It is an unusual problem. It is not 
unique to Pennsylvania. But I think the example that we will 
see in Laurel Gardens in Pennsylvania highlights some of the 
missing parts of the need for a federal program to address this 
issue.
    I want to thank particularly Marge Roukema, the chairman of 
the subcommittee, for setting this hearing today and even under 
theunusual and strange circumstances, to have that type of 
compassion for these people.
    To address the nationwide problem of leaking underground 
storage tanks, Congress established, as the chair has 
indicated, various programs, starting with the act in 1984. And 
then in 1986, setting up the fund to help the Environmental 
Protection Agency cover the costs of cleanup with the various 
states.
    Since then, a great deal of progress has been made, mostly 
taking the potential leaking tanks out and replacing them and 
the technology of double barreling the tanks and devices--
electronic devices--signaling leaking has certainly lessened 
the likelihood that leaking tanks in the future will have an 
impact.
    But the impact that it has today is multi-sized. And the 
federal government's direction to this impact has only been to 
help the states and the communities do the cleanup. What we 
have left out is probably the most important issues, and that 
is the issue of the effect on the community, the economic 
impact, the community impact, the fear and the dread and the 
desire for people to use usually their only and largest source 
of equity to either rearrange their lives and relocate or to 
refinance their properties.
    And if you have ever had the experience, as my constituents 
have in Laurel Gardens, when you go to the bank, there are very 
few banks that want to lend money on properties that are 
clearly located by the EPA in a hazardous waste site or a 
contamination site. And furthermore, the efforts made in 
cleanup are the type of efforts that cannot have an absolute, 
100 percent certainty that cleanup has occurred.
    So there is a wide range of citizens--some that accept what 
the government has done in cleanup and they are perfectly 
satisfied to remain and stay within the community; others that 
are in dead fear that the community cleanup has not been 
successful and, in fact, they may be exposed to severe hazards. 
One of the great hazards, of course, under gas spills is 
Benzene.
    Now when we saw this effort in Hazleton, Pennsylvania, we 
moved very quickly to bring the EPA on board after the 
Department of Environmental Protection of the Commonwealth had 
been onsite for more than 10 years. They did not take swift 
action. They did not move to remedy the situation.
    But in the year 2000, EPA did step in. And I was fortunate 
enough to convince the Coast Guard to provide, out of the Coast 
Guard fund, under the Oil Pollution Act, $25 million to direct 
toward the cleanup effort here, that otherwise could not have 
occurred. And of course, that occurred only because, by 
stretches of imagination, this oil spill would eventually get 
to the Susquehanna River, which was a navigable waterway. And 
the Oil Pollutions Act covers potential spills for navigable 
waterways.
    But it was, nevertheless, an extreme stress and compassion, 
expressed by the Coast Guard and the federal officials, that 
opened up the federal purse of $25 million to address this 
problem.
    Most recently, because we have had other less than 
satisfactory results in the cleanup, we have now convinced the 
EPA to do the entire collection system, sewer system, in the 
area to prevent any further leakage, if that is possible. Our 
problem is the land is saturated. There are still several homes 
whose levels of Benzene are a concern for chronic exposure.
    There have been studies made recently that have indicated 
Benzene-related cancer and higher than average cases of lupus 
in the Laurel Gardens area. All of these health hazards have 
certainly contributed to the anxiety of the residents.
    And they have asked a simple question. And they have asked 
it of me. They have asked it of other elected officials who 
testify today. It is basically this: ``Yes, we understand the 
response of the federal government, the state government, in 
cleaning up the hazardous area. But what do you do for us to 
allow us to get our lives back in order?''
    And I think that is the plea that will be made here today. 
These people live in a contaminated area. Their price--value of 
their home has significantly plummeted, if not disappeared 
entirely. They cannot get refinancing to reduce their 
mortgages, even though the rates are significantly lower, 
because no institution wants to provide that.
    They cannot get a home equity loan, even though they had 
built up equity in their home over a period of years. They 
cannot even get a loan to take care of medical expenses, 
because of some of the illnesses that are least suggestively 
traced to this spill.
    In effect, we have taken care of the cleanup for the 
general public. We have stood in for the bankrupt company that 
caused the damage. But the people that feel the effect--the 
homeowners in the community--have really not received any type 
of lenient treatment by the federal or state government in the 
nature of allowing them to get their lives back in order and on 
place.
    As a matter of fact, further complicated with that, because 
we do not have an organized system, the Luzerne County, which 
is the base county for taxing purposes, in order to provide 
relief, did provide that relief and made the assessment zero. 
But what that caused is it took away any semblance of trying to 
find out what the financial value of these properties would be. 
So that even in the help of reducing the tax burden on the 
homeowners, it took away their capacity to argue what value or 
equity they had in their homes and how they could refinance to 
either leave, improve themselves or treat their diseases with 
the monies necessary from the mortgage or refinancing 
operation.
    What we have here are a number of homes--more than 200--
that have been affected, a number of people that are satisfied 
to remain, have gone back and reconstructed their lives, but a 
small portion of people that either are still getting very 
positive readings of Benzene and other pollutants. And they 
really want to have the capacity to relocate their families and 
take them out of harm's way. And we do not have a federal or 
state program that allows that to happen.
    What I have presented in draft form to many of my 
colleagues and have circulated to the executive agencies of HUD 
and EPA is a draft form taking the concept of creating a master 
and then creating a program, whereby the federal government, 
under HUD, would insure the loans made by financial 
institutions to people in designated areas such as this. So 
that while lawsuits are pending, while situations are occurring 
that the people have to wait for their redress over a period of 
years, they can nevertheless refinance and relocate themselves 
and their families into a situation to allow them to get on 
with their lives.
    I think it is absolutely essential that the Congress 
address this issue. It is not only a special issue that occurs 
in Hazleton, Pennsylvania, but is occurring throughout the 
United States. And as witnesses that will testify here further 
today will indicate, this is just the tip of the iceberg as to 
what will and is going to occur in the very near future. So we 
need a remedy.
    Also today, Mr. Chairman, we will have the advantage of 
having testimony by two great public officials: a friend of 
mine, the Luzerne County Commissioner, Stephen Urban and 
Pennsylvania State Representative, Todd Eachus, who have both 
committed themselves to this program and have worked very hard 
with this neighborhood over the years to try and solve this 
problem.
    Both gentlemen are expert in the field, as one could 
classify a political leadership as being expert. But they 
certainly are.
    What I think we have to do together is to recognize that we 
can no longer ignore the plight of the people that are impacted 
by hazardous waste spills, such as leaky tanks. In order to do 
that, while they are waiting for whatever remedy the law 
allows, I think it is most essential that we create a program. 
And as a result, the Solid Waste Disposal Act to authorize the 
Housing and Urban Development to guarantee loans to homeowners 
living with the effects of leaky underground storage tank 
contamination has been circulated. I think it is one of the 
many remedies. I look forward to others.
    Mr. Green. Mr. Kanjorski, I do not mean to cut you off. We 
have now five minutes remaining for you and I to get over and 
vote.
    Mr. Kanjorski. Okay.
    Well, Mr. Chairman, I will ask that my remarks be admitted 
as part of the record.
    Mr. Green. Without objection.
    Mr. Kanjorski. I urge the committee seriously--and I 
appreciate your attention to this. It is an issue that needs to 
be attended to. And the appreciation of this community and 
myself to this committee for taking it up at this time.
    Thank you.
    [The prepared statement of Hon. Paul E. Kanjorski can be 
found on page 32 in the appendix.]
    Mr. Green. Thank you, Mr. Kanjorski. We will reconvene 
immediately after this vote. Thank you.
    [Recess.]
    Mr. Green. Call the subcommittee back to order. And we will 
introduce the next panel of witnesses.
    Our panel includes the Honorable Todd Eachus, who has 
represented the 116th legislative district of Luzerne County in 
the Pennsylvania General Assembly for the past six years. He is 
a member of the Aging and Older Adult Services Committee, the 
Insurance Committee and the Labor Relations Committee.
    Next, we have the Honorable Stephen Urban, who was elected 
in January of 2000 to the Luzerne County Board of 
Commissioners. Previously, he had served 24 years in the U.S. 
Army. Lt. Colonel Urban is a veteran of both the Vietnam and 
Persian Gulf wars.
    Third, we have Mr. Charlie Bartsch, who is a senior policy 
analyst at the Northeast-Midwest Institute, specializing in 
economic development issues, including federal and state, 
technical and financial assistance, tax incentives and 
industrial site reuse. He has appeared before congressional 
committees in the past on the issues of economic development 
and recovery.
    Mr. William Harvey is here today on behalf of the Appraisal 
Institute. He has been an appraiser in the Washington, DC 
metropolitan area for over 20 years and is the president of 
William C. Harvey and Associates. He is both a certified 
general real estate appraiser and a certified instructor for 
the Virginia Real Estate Appraisal Board.
    Ms. Patricia Tomsho comes to us from the Laurel Gardens 
Community in Luzerne County, which has been affected by leaking 
underground storage tanks. Since 1985, she has served as the 
executive director of United Charities and the United 
Children's Homes.
    Without objection, the written statements for each of our 
witnesses will be made part of the record. You will each be 
recognized for a five-minute summary of your testimony.
    It is my understanding that the lights on your end do not 
work, in terms of notifying you as to when your time is running 
short. I will try my best to do that gently and let you know it 
is time to summarize your testimony. But again, your full 
written statement will be made part of the record for those of 
us on the subcommittee.
    So without further ado, we will recognize Todd Eachus at 
this time.
    Mr. Eachus, welcome.

     STATEMENT OF TODD EACHUS, STATE REPRESENTATIVE, 116TH 
                   LEGISLATIVE DISTRICT (PA)

    Mr. Eachus. Thank you, Chairman Green. And I would like to 
thank Chairman Roukema for calling this committee before the 
Committee on Housing and Community Opportunity and allowing me 
to submit my testimony for the record.
    I would personally like to thank Congressman Paul Kanjorski 
for his efforts on behalf of the citizens affected in my 
legislative district in the Tranguch gasoline spill and others 
nationally who are adversely affected by petroleum spills.
    More than a decade ago, a minimum of 50,000 gallons of 
gasoline leaked into the Laurel Gardens neighborhood in my 
district, affecting about 400 homes and 1,500 residents. For 
more than 10 years, the residents of those homes have been 
living in a virtual nightmare. The government, both on and 
federal government, has continuously downplayed the severity of 
the situation, trying to reassure--or mislead, depending upon 
how you look at it--the people that there is nothing to worry 
about.
    The reality for these citizens is quite different. Their 
homes are virtually worthless. They fear for their health. If 
they had the financial means to leave the neighborhood, I have 
no doubt that they would have done so.
    Because a program to help people affected by environmental 
disasters is not included in the Oil Pollution Act, Congressman 
Kanjorski's legislation to provide low-interest loans to 
affected residents so that they may escape the pollution that 
cripples their health and the quality of their life is a good 
concept and one that is long overdue.
    As you move forward in discussing its merits, I ask that 
you keep in mind the citizens that this legislation is designed 
to assist and protect. I have a few observations and 
recommendations and I urge the committee to consider on behalf 
of the residents of the spill that I represent, as well as 
people who are living in this country who are victims of 
gasoline spills, leaks and other environmentally related 
hazards.
    As the concept of the low-interest program progressed, it 
was determined that the Department of Housing and Urban 
Development--HUD--would be the best equipped to administer 
these loan programs, as well as the forgiveness provisions 
within this bill. In addition to being an impartial party in 
this process, HUD is better equipped and has the knowledge 
necessary for this kind of assistance. I strongly urge the 
committee to keep HUD in this process.
    Additionally, I believe the loan program should be 
available to everyone affected by environmental hazard, not 
based on family income. The spill in my district did not 
distinguish between rich and poor. It did not decide which 
families it would harm. Every family affected by this spill has 
suffered substantial hardship. Every family should qualify for 
assistance.
    I also have some concerns in the bill's language relating 
to the low-interest loans. Although the bill puts the final 
decision on loan rates in the hands of the Secretary of HUD, 
who is expected to ensure the loans be at the lowest interest 
rate, the bill does not guarantee the rates will be at the 
lowest rate. Under the bill, the rates of the loans are agreed 
upon by the borrowers and the lenders and found reasonable by 
the secretary. However, it also says that the rate cannot 
exceed--quote--``the generally charged rates in the area for 
home mortgage loans not guaranteed or insured by any agency or 
instrumentality by the federal government.''
    Since these loans under this legislation are loans that are 
guaranteed by the federal government, why shouldn't the cap be 
based on rates generally charged for federally guaranteed 
loans? Those rates definitely would be lower than loans that 
are not guaranteed by the federal government.
    Also under the bill, the borrower can obtain a loan to buy 
or lease new property or use the equity in the home for 
whatever purpose they chose. While the bill is clear that the 
loan amount can be 100 percent of the pre-release value, I 
would recommend clarifying that for loans based on the equity 
in the property as described on page three, line 12 of the 
bill, the equity is also determined based on the pre-release 
value. I also say that the market value--the equity in these 
homes--may be, at this point, zero.
    Mr. Green. Mr. Eachus, if you could summarize your 
testimony?
    Mr. Eachus. I sure can.
    Mr. Chairman, I say to you that the citizens in my district 
have been aggrieved by this process. And even though something 
is being done today, something done is better than nothing at 
all. And not only that, I say to you not only by providing 
residents of my district a relief from this horrible situation 
that has faced them for 10 years, but also for other Americans 
facing the same tragic situation. And I urge the committee's 
action.
    [The prepared statement of Todd Eachus can be found on page 
45 in the appendix.]
    Mr. Green. Thank you, Mr. Eachus.
    Mr. Urban?

  STATEMENT OF STEPHEN URBAN, LUZERNE COUNTY (PA) COMMISSIONER

    Mr. Urban. Thank you.
    Thank you, Chairman Green and other distinguished members 
of the House Financial Services Housing and Community 
Opportunity Subcommittee. Thank you for the opportunity for 
appearing before you to discuss our concerns in Luzerne County 
and specifically how leaking underground storage tanks located 
in Laurel Gardens, Hazle Township and Hazleton City have eroded 
the home values.
    In my written testimony, I provided a brief description of 
the underground storage leak in the Hazleton area. This was 
described in a Hazle Township health effect study that was 
provided by the University of Pittsburgh Graduate School of 
Public Health.
    I will go right to my personal experiences in dealing with 
the problem, since this is in the written remarks.
    In January 2001,the Luzerne County commissioners were 
informed through public meetings presented by the U.S. EPA that 
more than 400 residential properties were affected by the 
Tranguch gas spill, caused by leaking underground storage 
tanks. Upon notification of the magnitude of the gasoline 
spill, we also learned that very little immediate help was 
available for homeowners living in the spill site.
    My immediate concerns were for the health and safety of our 
residents living in the gas spill and to determine if funds 
were available from the federal or state governments to assist 
homeowners to relocate outside the spill area. Through work 
with federal and state agencies, I learned that funds were not 
available for homeowners to move permanently outside the spill 
area.
    I believe residents in the community are in favor of 
establishing a program to allow homeowners the opportunity of 
recovering the equity of their property. Over the past two 
years, my office has received numerous phone calls and letters 
from homeowners residing in the Tranguch gas spill site asking 
for help in gaining equity in their homes or to relocate 
outside the spill area. Also, in public meeting's with 
homeowners, many impacted homeowners asked for help in 
relocating from the spill site.
    Many residents have cited health and safety concerns as a 
primary reason for wanting to leave the spill site and because 
fear of the unknown. Residents do not know how long the 
underground storage tanks have been leaking. Residents do not 
know the length of time that they were exposed to Benzene or 
other toxic byproducts of the gas spill. The government does 
not have data that can accurately predict what effect low dose, 
long-term exposure to Benzene and other toxic byproducts of 
gasoline will have on the health of people living in an area 
contaminated with gasoline. And the time period for cleanup of 
the Tranguch site is unknown.
    Based upon a history of the Tranguch spill site, 
underground storage tanks were probably leaking as early as 
1991, when homeowners first began smelling gas fumes. In my 
opinion, the health and safety of our homeowners should be of 
paramount concern and homeowners should be allowed to receive 
equity from their property and be given the opportunity to move 
on with their lives and live in a more safe and healthy 
environment.
    Homeowners residing in the Tranguch site have not been 
treated fairly. Compare the magnitude of the Tranguch site 
spill 50,000 to 900,000 gallons of gasoline that traces its 
origin to 1991 and another oil spill that occurred in Jackson 
Township, Luzerne County in 2000.
    In January 2000, a 5,500-gallon oil spill erupted in 
Jackson Township, Luzerne County. Of the 17 homes impacted by 
the 5,500-gas spill, all residents were offered buyouts. Of the 
17 homes impacted, nine were settlements involving tenants who 
chose to stay on the property and eight were settlements that 
resulted in buyouts of property owners.
    In addition, all impacted property owners received a 
minimum inconvenience payment of $50,000. And impacted tenants 
received a $10,000 payment. In addition, homeowners that chose 
to stay and live in the impacted homes were awarded a maximum 
of $95,000 in return for the release of claims, except personal 
injury, at the end of a five-year period.
    In Jackson Township, Luzerne County, a responsible oil 
company made the right decision and provided equity to 
homeowners impacted by the oil spill. The oil company offered 
equity in the form of a buyout to homeowners.
    Homeowners residing in the Tranguch spill site deserve the 
same type of treatment from the government as the homeowners in 
Jackson Township received from an oil company. Homeowners 
residing in the Tranguch site deserve the option of receiving 
equity from their homes because they are victims of this 
environmental disaster.
    In response to the large number of families affected by the 
Tranguch spill, the Luzerne County commissioners implemented 
several measures to help homeowners in responding to the case 
of environmental contamination. On March the 7th, the Board of 
Commissioners adopted a resolution declaring a state of 
emergency within the city of Hazleton and Hazle Township, 
Luzerne County, Pennsylvania.
    Our resolution stated that homeowners residing in the City 
of Hazleton and Hazle Township, Luzerne County are impacted by 
a gasoline spill, which has entered an underground mine in that 
section of the county. Luzerne County recognized that a 
potential serious health risk exists in the Tranguch gas spill 
area, caused by the exposure to Benzene and other toxic 
byproducts of the gas spill.
    Also, our resolution supported a buyout of the affected 
residential real properties. This state of emergency still 
exists today.
    On February 7, 2001,the Board of Commissioners, at a public 
meeting, unanimously approved a resolution requesting the 
Luzerne County Board of Assessment Appeals to requests to 
reduce to zero the value of realty properties of those real 
estate properties affected by the gas spill, as determined by 
the federal government for the period January 1, 2001 to 
December 31,2002.
    In our resolution, the County Board of Commissioners again 
recognized that homeowners are subject to the potential serious 
health risks which exist due to the exposure to Benzene, as 
well as other toxic byproducts.
    Mr. Green. Mr. Urban, if you could summarize, please. Thank 
you.
    Mr. Urban. What I am really here to say, Mr. Chairman, is 
that the citizens of Hazleton really need help. And we need the 
help of your committee. There is no legislation that is out 
there today that will offer buyouts or will create equity for 
homeowners living in this gas spill site. And the people of our 
community ask for your help.
    Thank you, Mr. Chairman.
    [The prepared statement of Stephan Urban can be found on 
page 62 in the appendix.]
    Mr. Green. Thank you, Mr. Urban.
    Welcome, Mr. Bartsch.

  STATEMENT OF CHARLIE BARTSCH, EXECUTIVE DIRECTOR, NORTHEAST-
                       MIDWEST INSTITUTE

    Mr. Bartsch. Thank you. Thank you for the opportunity to 
testify today.
    The institute has worked closely with the bipartisan 
Northeast-Midwest Congressional Coalition, which is currently 
co-chaired by Representatives Jack Quinn and Marty Meehan. And 
I know that both of them have worked with the subcommittee, on 
different bills that have explored the relationship between 
environmental contamination and community development. And I 
think this is a natural next step.
    My comments are going to focus on the broader aspects and 
concepts related to this bill, focusing more on some of the 
cleanup and reuse aspects. But clearly, these are important to 
owners because you need to do these activities to set the stage 
to restore value.
    These comments are based on the findings of two recent 
reports that I have worked on. One is ``Recycling America's Gas 
Stations.'' And the other one is ``Using State Voluntary 
Cleanup Programs to Support Residential Redevelopment,'' done 
in cooperation with the National Association of Homebuilders.
    Both of these really get at the question which is the focus 
of this hearing, and that is: how significant is the problem of 
leaking underground storage tanks or LUSTs? And what is its 
impact on communities?
    There is no question that the sheer number of single and 
multi-family housing units affected by real or potential LUST 
contamination is unknown. But given the age of so many of these 
structures and their utility systems, there is no question that 
it is significant, potentially hundreds of thousands of units.
    And Mr. Chairman, you gave us numbers in your statement 
that really convey the magnitude of this. And like other 
contaminated sites, LUST sites need to be addressed in a 
comprehensive way, in which contamination is not only detected 
and contained, but also where sites are cleaned up and put back 
into use. And this requires access to affordable resources.
    My longer statement discusses in detail some of the 
specific issues that tank problems raise relative to housing 
and community development--concerns like local capacity for 
technical and financial support to help carry out LUST site 
activities, the lack of needed incentives, legal and 
situational constraints, such as the problems of applying 
existing federal and state resources to LUST cleanup and site 
reuse, and HUD's policy, which largely prohibits use of housing 
program resources for any residential project which includes 
institutional controls.
    So what is currently being done to address the LUST issue? 
Well, states and communities have taken some limited, but 
important initial steps to address problems posed by UST sites. 
I just want to mention three quickly.
    These initial actions, though, could play an important role 
in a HUD-driven homeowner-focused effort to grapple with 
housing site contamination. From an operational standpoint, 
some communities are starting to work to incorporate UST 
project approaches into various parts of their local government 
community development processes. This has led to some general 
site cleanup, new housing and commercial development and 
restoration of property values to increase tax ratables.
    And in terms of federal programs, cities in several 
states--notably those in places like Wisconsin and New York and 
New Jersey have suggested that it would be really important to 
bring a variety of federal program resources to bear on these 
projects. They require packaging. And you need to bring more 
programs into the mix. Programs offered by HUD and EDA and 
other agencies, which are targeted to distressed areas or 
markets, capital market imperfections, have the potential to 
play in a key role. And the bill under consideration by the 
subcommittee would enhance this.
    A second approach is informational. We need to get 
information to private parties--both owners and lenders--to 
show them how to overcome the barriers, to instruct them about 
the economic benefits of cleaning and reusing these sites and 
about the various public incentives and private tools, such as 
environmental insurance, that can really help tie these 
projects together and minimize stigma and enhance site value.
    And clearly, the third thing that is being done, slowly--
and it is clearly the most critical, as the proposed bill 
suggests--we need financial support. It is a key activity. It 
is just now starting to be considered. A small but significant 
number of states and communities have started to address the 
LUST issue and its impact on housing through initiatives of 
their own.
    Again, my statement talks about a number of these 
initiatives. But these are efforts that would really be 
enhanced by additional federal action.
    There is no question that more needs to be done. In my 
recent work on tank sites, several states and cities urged an 
UST field connection to HUD, similar to the one that now exists 
for brownfield efforts, which is in fact a link which this 
subcommittee worked to put into place.
    And I think in the case of expanding and clarifying ways in 
which HUD could encourage things like financing tank cleanup 
and restoring distressed properties to productive use, these 
are activities that really fit within HUD's basic mission. And 
this really gets to the heart of what this proposed legislation 
would do.
    In establishing a HUD loan guarantee program--
    Mr. Green. Mr. Bartsch, if you could summarize for us. 
Thank you.
    Mr. Bartsch. I will just close by pointing out that I think 
the bill is a good one. I would suggest a couple of minor 
modifications, including a finding that makes it clear that 
cleanup and reuse of housing, unused or abandoned because of 
LUST contamination, should be a clear goal of HUD.
    I would allow public housing agencies to delegate the 
authorities that this bill gives them to other capable local 
agencies or non-profit organizations that might be better 
suited to deal with some of the management issues related to 
properties that are acquired through program. I would provide 
an additional incentive--perhaps a 100 percent guarantee--to 
lenders that agree to provide financing for cleanup of the 
original housing property as part of the financing package.
    I would allow the guarantee to be extended to mixed-use 
properties that include commercial uses, as well as housing, 
because this is a good way to get value back into communities. 
And I think finally, I would direct HUD to allow appropriate 
and protective institutional controls to be used in conjunction 
with its other housing programs. HUD does not allow this very 
often now. And I think this could limit the effectiveness of 
this proposed bill.
    I think this bill sets in motion the prospects of a really 
productive public-private partnership between homeowners, 
lenders and communities and HUD to make some of these 
properties better.
    [The prepared statement of Charles Bartsch can be found on 
page 35 in the appendix.]
    Mr. Green. Thank you. Thank you, Mr. Bartsch. Very 
interesting.
    Mr. Harvey, would you please testify for us? Thank you.

 STATEMENT OF WILLIAM C. HARVEY, PRESIDENT, WILLIAM C. HARVEY 
   AND ASSOCIATES, INC., ON BEHALF OF THE APPRAISAL INSTITUTE

    Mr. Harvey. Mr. Chair, members of the subcommittee, thank 
you for the invitation to testify.
    I am William C. Harvey, MAI. And I am here to address the 
issues of valuing pre-contaminated property and the effect of 
contamination from leaking storage tanks on the housing market.
    Appraising contaminated property in its pre-contaminated 
condition requires that the appraiser invoke a hypothetical 
condition that the property is free of contamination and 
clearly indicate such in any report. Three categories of 
effective appraisal dates--retrospective, current or 
perspective--may then be used, according to the purpose and 
function of the appraisal assignment.
    A retrospective appraisal occurs when the effective 
appraisal date is prior to the date of the report. This type of 
appraisal is most commonly developed for purposes of estate 
administration, condemnation proceedings and litigation to 
recover damages. Since a retrospective appraisal is complicated 
by the fact that the appraiser already knows what has occurred 
in the market after the effective appraisal date, it is 
critical that the appraiser establish a logical cut-off date 
for the consideration of subsequent data that no longer 
reflects the relevant market.
    While this can be a difficult determination to make, 
studying the market conditions as of the effective appraisal 
date will aid the appraiser in judging where to make this cut-
off. The effective appraisal date should be considered as the 
cut-off date for data considered by the appraiser, absent 
evidence that data subsequent to the effective appraisal date 
were consistent with the market expectations at that time.
    Once the context of the appraisal is established, a 
retrospective appraisal is developed like any other appraisal 
through the proper development of the applicable approaches to 
value that are typically used to value vacant land and improved 
property. The reliability of an appraisal relates to the extent 
to which the valuation process yields the same results on 
repeated trials. To that end, retrospective appraisals can be 
as reliable as any other appraisal, so long as a complete 
appraisal process is utilized.
    In developing a complete appraisal, the appraiser will use 
all applicable valuation procedures. And the value conclusion 
will reflect all known information relative to the subject 
property, market conditions and available data. By contrast, in 
a limited appraisal, the appraiser and the client agree before 
the commencement of the assignment that the appraiser will not 
use all applicable valuation procedures or that the value 
conclusion will not reflect all known information about the 
subject property, market conditions and available data.
    Thus, to ensure the highest level of reliability, the 
process should involve a complete appraisal.
    On the issue of the impact on the affected housing market, 
my personal experience in appraising properties affected by 
environmental contamination varies from a single residence with 
minor onsite releases to communities comprised of hundreds of 
homes sitting atop large plumes of hazardous materials. 
Notwithstanding the differences in the case studies, the 
effects on value generally follow what has become known as the 
Detrimental Condition Model. This model, a copy of which is 
attached to my written statement and appears in demonstrative 
form to your left, graphically illustrates the fundamental 
effects that environmental contamination can have on housing 
markets.
    While the DC Model recognizes all possible stages, each 
detrimental condition must be analyzed on a case-by-case basis 
because of the potential for a variety of impacts on value 
during the property's life cycle. The first step with any 
detrimental condition analysis is to consider the unimpaired 
value of the property as if there is no detrimental condition. 
This is reflected as Point A on the model.
    Upon the occurrence--or more likely, the discovery--of the 
detrimental condition, the value may fall to Point B if the 
facts and market data support such a decline. The value during 
this period is often the lowest. And in some instances, the 
value is unmarketable until the magnitude of the detrimental 
condition can be ascertained. Nevertheless, in a retrospective 
appraisal where all assessment, remediation and ongoing issues 
are studied, a reliable determination of Point B can be made.
    Mr. Green. Mr. Harvey, if you could summarize your 
testimony for us? Thank you.
    Mr. Harvey. While the DC Model suggests an orderly process, 
each detrimental condition must be analyzed on a case-by-case 
basis due to the variety of impacts on value. Although my 
experience has shown no two cases are alike, the analysis of 
environmental contamination should begin with the DC Model.
    Thank you for the opportunity to testify.
    [The prepared statement of William C. Harvey can be found 
on page 48 in the appendix.]
    Mr. Green. Thank you.
    Now if we could hear from Ms. Tomsho. Welcome.

    STATEMENT OF PATRICIA TOMSHO, RESIDENT, LAUREL GARDENS 
                 COMMUNITY, LUZERNE COUNTY, PA

    Ms. Tomsho. Thank you for having me. On behalf of the 
residents of Laurel Gardens, Hazleton City and Hazle Township, 
Luzerne County, Pennsylvania, I thank you for allowing us the 
opportunity to express our serious concerns. I speak not only 
for our community, but also for the many other communities 
across the United States which are similarly affected.
    In fact, in review of the EPA's web site on Leaking 
Underground Storage Tanks--LUSTs--they cite 418,918 leaking 
underground storage tanks across the country. And these are 
confirmed releases.
    That averages out to about 80,500 per state. Clearly, our 
group is not the only affected group or residential area. And 
therefore, the work you are doing here is so important to all 
of us.
    What I am trying to do is give you the personal side of 
this. That is my role. And that is what I do on behalf of our 
community.
    Gasoline contains benzene, which is a known carcinogen, as 
well as toluene, ethyl benzene, xylene. They are called BTEX. 
And they are volatile organic compounds.
    Also found in unleaded gasoline is MTBE, which is known to 
be hazardous to health and is extremely water soluble. The 
effects of MTBE are not still--they have not been widely 
tested, so they are not well known. However, benzene is well 
known.
    We have the map up there, which shows you the plume across 
our neighborhood, the soil contamination. And underneath, it 
shows you the entire neighborhood.
    The black crosses are the deaths from cancer, gentlemen and 
ladies. The red crosses are people who have cancer illnesses. 
And the green crosses are people who have other kinds of 
illnesses, like the autoimmune diseases.
    Clearly, our area is loaded with cancer deaths and cancer 
illnesses. You will note the yellow outline. That is the mine 
that underlies our property. And that makes our particular 
spill more unique than any other in the country. We looked and 
we could not find another in the country that had an 
underground mine.
    And it is a low point, so all the ground water goes into 
that underground mine. And the gasoline migrated there as well. 
And depending on the amount of rain, the gasoline fumes will go 
up and down and affect the homes.
    So the remediation has been challenging.
    In Hazleton Township, as Mr. Urban and Mr. Eachus have 
noted, we have completed a study from the University of 
Pittsburgh. And what they found is that we are 10 times more 
likely to contract leukemia, eight times more likely to 
contract stomach cancer and three times more likely to contract 
prostate cancer--provided we are males, of course.
    And the Hazleton part of the group is completing the study 
now.
    Additionally, we challenge the national average of lupus. 
Usually in the nation, there is one case in 1,000 people. We 
have five in 250 people--five cases of diagnosed lupus.
    I am testifying today to convey to all of you the fear and 
the hopelessness and mostly the loss of control and personal 
choice that we as victims feel. We have to confront a spill on 
a daily basis.
    And I would like to give you just a few case examples to 
help you understand. One such case is a family who started to 
build a home in the spill zone. The frame was completed, but 
the bank stopped the mortgage. It is now a skeleton of rotting 
wood, a visible reminder of property loss. When you live in a 
gasoline-impacted neighborhood, the loss of freedom and 
control, on which this great country is founded, is absolute 
and very real.
    There are areas over which we have no control--over our 
health, the use of equity in our property and the sale of our 
property. All of these have a financial impact on us. Health 
care is a primary concern. One week of chemotherapy costs 
$15,000. The cost to employers for healthcare for lost workers 
is great.
    People who have small children who cannot leave their homes 
are really very traumatized. They are frightened for their 
children. Mine grew up in that area. I am very happy that they 
live out now. But it is traumatic for a mother to watch her 
children live in a known zone.
    I am moving along.
    Mr. Green. Thank you.
    Ms. Tomsho. There is a heart-wrenching case of a 
grandmother with MDS Leukemia who had to leave her home, but 
had to leave her son and her grandchildren living there. I do 
refer you to the booklets that we prepared. They are very well 
documented. It shows you many of the traumas that we went 
through.
    But I want to finish by telling you that the legislation 
you are considering is crucial to us. It should be across the 
board and not income-related. The spill has been non-
discriminatory, affecting young and old, rich and poor.
    In cases like ours, it is very important to specify the 
forgiveness aspect and who will make that decision. In our 
experience, we have had to become adversarial with EPA in order 
to affect a serious cleanup. And then, that agency having 
control over forgiveness would be frightening to us.
    All I can tell you is, please refer to the personal letters 
that are in the booklets and some of the information. And I 
thank you for your time and attention.
    [The prepared statement of Patricia Tomsho can be found on 
page 60 in the appendix.]
    Mr. Green. Thank you, Ms. Tomsho. I thank all the 
witnesses. That map and chart you have over there is truly 
astounding.
    In terms of questions, Mr. Bartsch, I found your testimony 
and the written statement particularly interesting. You have 
listed some of the state programs--some of the state and local 
programs that have emerged in this area.
    I would invite you to supply some additional documentation 
to the committee. I think we would be very interested to see, 
even in a more comprehensive way, what some of the states are 
doing. Because obviously, that is useful information to us.
    Mr. Bartsch. I can do that.
    Mr. Green. So I would appreciate it if you could do that 
for us.
    And I guess along that line, let me ask you, Representative 
Eachus, has the state of Pennsylvania taken a look at 
legislation in this area? And has it passed any legislation? 
And if not, why? What have been the forces of resistance?
    Mr. Eachus. Well, Chairman Green, we have not addressed the 
housing perspective of residential spills. But I did provide 
the committee--both minority and majority staff--a summary of 
all of the legislative framework in the state of Pennsylvania.
    We do have an indemnification fund. But since this was an 
OPA site and the state handed the role over to the federal 
regulators to do the cleanup, they have been less than 
cooperative in taking financial responsibility for any aspect 
outside the agreed upon issues between the folks at EPA, the 
Coast Guard and the Department of Environmental Protection.
    And I think that is an inhibitor. In these cases, the state 
was on the site from late 1989, 1988, when they first started 
to get concerns from citizens, but really did nothing except 
study the spill until 1999. In 1999, both myself and 
Congressman Kanjorski began to make inquiries. And all of a 
sudden, EPA came in, took over the site under OPA, made it an 
OPA site. And then the state folks from DEP were unwilling 
either to make this an emergency--a state of emergency--which 
we urged them to do and try to bring PEMA funds in for these 
citizens or use any of our tank indemnification fund with 
regard to dealing with housing or buyouts or any other kind of 
relocation strategies.
    That is the problem. Once this is turned over to the 
federal government, I believe the states are going to take a 
walk with regard to responsibility.
    Mr. Green. Yeah, I fear you are right. That is one of the 
reasons I posed that question.
    In terms of our trying to get a more thorough understanding 
of the scope of the problem--and I do not mean in terms of the 
number of sites. I think we have some documentation with 
respect to that. And obviously, there are some programs that 
deal with these issues in the abstract.
    What I think would be real interesting for us is to try to 
get a handle on the loss of value, try to measure some of the 
more human aspects that we have had testimony on, on a national 
level.
    Do any of you have any suggestions as to how we can begin 
to accumulate that information, because I think it would be 
useful for us?
    Mr. Harvey. Mr. Chair, you are talking about a very broad 
database of properties and communities.
    Mr. Green. I understand. I understand.
    Mr. Harvey. But by illustration, a local community here 
that has been a predecessor to this entire process is the 
Mantua community in Fairfax. To give you an idea of the loss in 
value, that spill, which affected 400 homes from a leaking 
storage tank at a tank farm, occurred in late 1990. And the 
full recovery of those home values took 12 years.
    It was augmented by a private property value protection 
plan, introduced by the responsible party, who took liability 
for the cleanup. Your legislation parallels in pretty good form 
the attributes of that private property value protection plan.
    Absent such a return of value, it is likely to be so far 
extended that it just turns the American dream of home 
ownership into a nightmare for the residents. So I think it is 
such a pervasive problem that you would be astounded by the 
numbers.
    But I will be happy to introduce that request to my 
association to see what we could provide this committee.
    Mr. Green. I think that would be helpful.
    Mr. Eachus?
    Mr. Eachus. Yes, Chairman Green. I have one other issue. 
And that is relating to the issue of guaranteeing the loans 
under the Kanjorski bill, there is a requirement that 10 
percent be guaranteed by either mortgage premium insurance or 
other state agencies or community programs.
    I am unaware of anything at the county which would help to 
guarantee those kinds of properties, as well as the 
Commonwealth. And what I am concerned about is that if the 
committee can find out if the mortgage premium insurance 
industry, the guarantee sources, are available for these kinds 
of properties, I am unaware of any in the Commonwealth of 
Pennsylvania that would help to guarantee properties that would 
be contaminated under these sites. So I am concerned about 
that.
    Mr. Green. Mr. Bartsch, can you help us find that 
information as well?
    Mr. Bartsch. I can help with that. And I think that raises 
a good issue.
    Just in the sense--I mean, I understand the need that you 
do not want to have a full guarantee because you set the stage 
for projects that may not be so well underwritten. But clearly, 
there is a gap here that may need to be explored.
    I know that there has been a lot of advances in 
environmental insurance. And I also know that the states are 
going to have access to some resources under the new brownfield 
law to promote environmental insurance. But again, I think 
there is going to be a lot of demands on those. And I would be 
glad to see what I can find out.
    Mr. Green. Great. Much appreciate that.
    The chair recognizes the ranking minority member, Barney 
Frank, for any questions he might have.
    Mr. Frank. It just strikes me, as we talk about that last 
thing, since we have passed legislation getting people out from 
under private mortgage insurance that they have been obligated 
to pay for when they do not need it, maybe we can find 
something more useful for that industry to do now that they are 
not insuring people who do not need the insurance and do not 
want it.
    I am going to pass on to Mr. Kanjorski. I just want to 
acknowledge the fact that this is--we are here because of him. 
This is a subject which he has brought to our attention. He has 
made a very convincing case.
    This hearing is a result of his efforts. And so I am going 
to yield to him.
    I want to thank the witnesses and particularly Ms. Tomsho. 
I am always impressed--it does not happen a lot--when a citizen 
such as yourself becomes not just interested, but as 
knowledgeable as you are.
    And my inference is that you gave yourself a late post-
graduate chemistry and medical course. And the results are very 
impressive. And I thank you for the seriousness with which you 
have shared that.
    And with that, I am going to yield my time, which would be 
in addition to his own time, to Mr. Kanjorski, because he 
really is the driving force on this.
    Mr. Kanjorski. Thank you very much, Mr. Frank.
    I want to bring to the committee members an observation 
that I have made. And Pat, I am going to direct the question to 
you.
    When this all started off, there was great sympathy in the 
very broad community of Hazleton and Hazle Township and some 
sort of an identification between all the residents and then 
the impacted residents. But over the course of years, I have 
sensed a narrowing of support from the unaffected community and 
sort of a feeling like the affected community is asking for 
something that they are not entitled to.
    And Pat, do you sense that? And maybe you can shed some 
light on the idea of--since the people that live in Laurel 
Gardens had nothing to do with this spill, gained nothing 
economically from this spill, were totally innocent parties, 
why is it that, at some point, some of the rest of the 
community starts looking at the affected community with 
annoyance, if you will?
    What is that dynamic that is out there? And do you sense 
it? Am I making an observation that is correct? And what is it?
    Ms. Tomsho. Actually, I have seen a dichotomy in that. Some 
people are very invested and still supporting us. But they tend 
to be the quiet majority.
    What I would say is what--and this is my field. I am a 
social worker by trade. And what you are seeing is the victim 
phenomenon. When people are victimized, people think poorly of 
them and therefore, begin to dislike them. And then they resent 
them for what they get.
    And I think that is an issue that America--that is a 
broader issue America maybe needs to study. But it applies even 
on a small issue like ours. People resent victims. They resent 
what victims get. And even if it is hard won and hard fought, 
they resent it.
    Mr. Kanjorski. One of the observations that we made and I 
want to draw to my colleagues' attention is that this is a 
process that has occurred over 10, 12, 14 years. And up until 
EPA's involvement in 2000, really nothing occurred, not even 
addressing the fix-up of the remedy situation.
    I mean, for all intents and purposes, this was going to be 
solved by attrition, which probably is the least sympathetic 
methodology I could think of solving this problem. But over the 
course of the several years that I have been dealing with Mr. 
Eachus and Mr. Urban and Pat's group, it became eminently clear 
to me that tort law recovery for negligence or other remedies, 
which may be built into the law, just do not lend themselves to 
victims who are living in a community and have most of their 
assets or equity in their homes. They are literally prisoners 
to live in harm's way, subject to--hopefully--the cleanup 
process.
    And if the cleanup process is not complete, they will have 
to carry the burden for the rest of their lives of the exposure 
to their children. I ran into so many families that are saying, 
``You know, if it were just me alone, I would stay and take the 
risk. But every time I look at my young children, I realize 
that it is my inadequacy to go out and buy a new home and to 
relocate and take them out of harm's way, that if they should 
get sick or if something happens to them in the future, it is 
my fault.''
    And that is a terrible burden to put on parents or 
grandparents. And that is occurring in this neighborhood 
because it is a neighborhood of extended families. And very 
often, you will have two or three generations living in the 
same household or within the same neighborhood.
    It is quite apparent, really, the solution to this is very 
simple. Let those people who are in great fear and anxiety find 
a way to recover their equity so that they go out and can 
relocate. And find a methodology, not through the long process 
of condemnation and acquisition that we all experience in 
redevelopment, but by putting in the special master, really 
adopted out of the concept of the World Trade Center, someone 
who could move very quickly, establish cost and expenses and 
have very broad latitude to give these people the appraised 
value of their equity so that they can move on.
    And then allow the normal processes of the law to carry on 
for recovery or for cleanup. But they are in a situation where 
they are damned if they do and damned if they do not. And they 
are stuck there until all the federal and state agencies and 
county agencies and local municipal agencies take their time at 
bat and usually do not hit a home run.
    But the people here are the ones that are scored against. 
They are the ones that lose.
    I see Mr. Eachus wants to add to that.
    Mr. Eachus. I think Congressman Kanjorski is on the mark. 
But from a public policy perspective, I really see these 
gasoline spills as something that have to do with pre-
regulation and post-regulation.
    In Pennsylvania we have forced everybody who is business 
today selling either petroleum or gasoline products to put new 
tanks in that meet modern standards and federal standards. The 
releases that are the most egregious in our region are ones 
that are pre-releases due to a lack of regulation by the 
federal and state authorities.
    So I really see some of these spills as we are in a time 
where the 1960s, 1970s and 1980s tanks that were installed are 
leaking and having an impact on communities, but the new tank 
technology--not to say that it will not be spilled--it is less 
likely that there will be spills. Plus, they have stronger 
indemnification requirements that put money in place to back up 
some of these spills, which could be used as a match toward 
housing credits or other kinds of things.
    So I think we are in a unique time between pre-and post-
regulation of gasoline tanks.
    Mr. Bartsch. And could I add one thing to that, too? Just 
getting at again, the issue of, again, as you suggested, 
ultimately cleanup and reuse. I think that this country has a 
long history of helping people in need. Clearly, this is the 
same situation.
    And at the same time, I think what I like about the bill 
proposal is that you really set the stage for, you know, sort 
of ultimate reuse and cleanup of these things. I mean, you are 
not just moving people out and creating sort of uninhabitable 
wastelands, but you are setting the stage for cleanup.
    And to that extent, you can really look at the resources in 
this bill as really an investment. And these investments will 
be recoverable as these homes are cleaned up and reused, as 
these sites are cleaned up and reused. So it is an investment 
and not just a subsidy.
    Mr. Kanjorski. I have about three minutes, Pat. And since 
you are the person that has led this cause all the way through, 
I am going to ask you to, in your own words, spell out to the 
committee what you would like the Congress to do as a remedy 
for Laurel Gardens, but also for all the other Americans that 
are impacted, through no fault of their own, by leaky storage 
tanks.
    Ms. Tomsho. I would like the Congress to certainly pass a 
law or a bill, not my strong point, that will address the 
financial loss that all of our neighborhood has. I cannot 
explain in enough words how traumatic this has been for the 
neighborhood. And people truly have no choices.
    They need to be able to access the equity in their homes 
and move if they feel unsafe. And at this point, we can do 
neither.
    That is what we need. Thank you.
    Mr. Kanjorski. Thank you, Pat.
    Mr. Chairman?
    Mr. Green. Thank you.
    The chair recognizes Mrs. Kelly for any questions that she 
might have.
    Mrs. Kelly. Thank you very much. I will tell you, coming 
into this hearing, I was on the phone with my husband. And I 
told him I was coming to a LUST hearing. And he said, ``What 
are you doing in Washington?''
    [Laughter.]
    He said, ``Are you sure you are doing your job?'' I said, 
``Yeah, this is a serious situation.''
    And it is a serious situation. In my area of New York, I 
have been working with a township next door to me where I have 
experienced firsthand with people a whole neighborhood that was 
contaminated by MTBE. And it went into their drinking wells 
from a nearby gas station.
    Some of these people had little children. They were told 
they could not drink, could not cook, could not bathe and could 
not even smell the water. They were told not to turn on the 
taps in their sinks and their bathrooms. Flushing the toilet 
was not allowed because it put the MTBE in the air.
    One of the serious things I think we have to look at with 
all of this though is the fact that there is not good 
scientific information on the environmental body contamination 
problems. It is just not well defined on what is in the 
environment and how it affects the body.
    When I see a cluster like you have, this is terribly 
disturbing. It seems it really should be looked at further. And 
I am glad that we are having this hearing.
    In another town near me, one also that I represent, there 
is a young mother who, when her husband died, moved in and 
altered the family bar so that she now has a convenience store 
and a gas station. And she is okay. Her gas station is okay.
    But there is a gas station on the hill up above her. And 
that gas station has old tanks. It is leaking something down 
into hers. And now people think this mother, who is trying to 
clean up the neighborhood and make a better life for her kids, 
they have got a situation where their land is contaminated by 
the gas station up the hill.
    And between the two gas stations is a farm. And the farmer 
is spraying that on--it is a truck farm. That is going on the 
crops.
    So we are having big problems with this. This is a serious 
situation.
    And I just want to go to you, Mr. Bartsch, to ask you a 
couple of questions. What areas--are doing the best job of 
cleaning up the LUST problem?
    Mr. Bartsch. Well, one of the cities that I am most 
familiar with that is doing that is Chicago. And again, it is 
because they have made a significant public sector effort to 
take on these sites. They aggressively take title to the sites.
    Now this is more from a perspective of abandoned gas 
stations and less from the perspective of home heating tanks. 
And one of the things that they have done there that is an 
option that is not available to most places is they have 
basically just forbidden the use of ground water. You cannot 
drill a well. You cannot use any of it.
    That is an option that is not available to most places. But 
I think what is important about what they have done there--they 
have done really good things in a couple of cities in New York 
that I am aware of, as well as, again, cities in Wisconsin--is 
they have really made an effort to figure out the pieces and 
bring to bear all the different kinds of resources that are 
needed. Because it is a patchwork. You cannot deal with one of 
these sites with one source. You need to be able to pull from 
not only a HUD, but perhaps an EDA and perhaps some other 
resources as well.
    The state of Ohio has done a lot of work with the State 
Clean Water Revolving Fund to do some pretty innovative 
financing. So there are some things that can be done. And a big 
piece of this is just getting the information out there and 
also educating the federal agencies about what they really can 
do. Because again, depending on where you go and who you talk 
to, some will allow these kinds of activities and some will 
think that it is not in the mission, which is why I suggested 
putting that direct finding into HUD so that it is crystal 
clear that this should be one of their objectives.
    Mrs. Kelly. Have you found that the agencies, when they are 
dealing with each other, are talking about not just 
remediation, but are they talking about affecting areas when 
they are looking at the totality of the environmental concerns? 
Like an underground aquifer--for instance, I am north of New 
Jersey. A lot of the area I represent supplies water down into 
New Jersey.
    Mr. Bartsch. I think my impression would be that those 
kinds of conversations are hit and miss. But I think there does 
need to be more effort to coordinate that, for the simple 
reason that, again, everybody brings information and resources 
to the table. And it is an expensive problem.
    We have some--it is not only resources. It is also 
liability.
    I know in the case of some of the gas station issues, you 
have some of the big oil companies that have really kind of 
chosen to basically mothball sites and not do anything because 
they are so afraid of what might happen should they start to 
take a good first constructive step. I think it is better to 
get some of these resources used in sort of clean up and reuse 
than litigation.
    Mrs. Kelly. Are the CDBG funds being used? And if they are, 
perhaps we can take a look at maybe helping to coordinate these 
efforts? Are they being used to fund the LUST cleanups?
    Mr. Bartsch. They are being used in some cases. Probably--
again, to go back to the Wisconsin example, the state of 
Wisconsin, through its Small City CDBG, has funded some of 
these. Some entitlement cities have funded this. Again, it 
comes down to sometimes what your HUD area office decides is a 
good thing to do.
    I have talked to people who really wanted to use the CDBG 
funds for something like this, but have decided that sort of 
the extra justification is just--they just cannot do it. They 
do not have the capacity. It is just easier to go rehab 
something than to try to take on something more innovative.
    So again, I think that getting the body of case examples 
out there is a helpful way of making this happen.
    Mrs. Kelly. I would like to ask unanimous consent. I had an 
opening statement. I was not able to be here. May I ask 
unanimous consent to put that statement in the record, please?
    Mr. Green. Unanimous consent has already been granted.
    Mrs. Kelly. Thank you.
    [The prepared statement of Hon. Sue W. Kelly can be found 
on page 31 in the appendix.]
    Mr. Green. Mr. Kanjorski, you were looking with great 
interest. Do you have something that you wish to add?
    Mr. Kanjorski. Ms. Kelly raised a very interesting question 
about using CDBG. Actually, you will find that it is not nearly 
significant enough in amounts to handle these problems. These 
problems are generally in the multimillions of dollars.
    In communities like Pennsylvania--I say it with apology--we 
have 2,500 municipalities, 90 percent of which are under 3,500 
in population. So they receive no direct CDBG money.
    And the Commonwealth has a program of putting money out to 
these communities. But it amounts to sometimes $10,000, 
$50,000, at a maximum of $100,000.
    Mrs. Kelly. If the gentleman would yield, I would 
respectfully say that we need to use every resource possible to 
do coordination and remediation. These people are stuck, 
especially if they are out there in rural communities.
    I know Hazleton. I have known Hazleton for 40 years. And I 
know where it is.
    And I understand that we have to do something. I am 
questioning how we can best position HUD and the monies that we 
have there to help in this problem.
    This is a serious problem. And it is all across our nation.
    Mr. Kanjorski. Mrs. Kelly, the design of my legislation 
really is a public-private solution. Actually, we are not 
called upon here to put up all the money for relief. All we are 
really called upon is to put up some percentage of the money to 
allow these people to relocate and then to recover the real 
equity or value that they have in these homes.
    I would tell you that my judgment is probably 20 percent of 
all of the money insured would ever be at risk from the federal 
government. The other 80 percent will be recaptured when the 
cleanup is done, when the people are adequately relocated and 
their lives started.
    But our problem is we cannot find that 20 percent. And the 
private market cannot be expected to take that risk in a 
contaminated area.
    So we are between the devil and the deep blue sea, if you 
will.
    Mr. Green. Well, I think that is a real good place to wrap 
this up, between the devil and the deep blue sea.
    Thank you to all the members of the subcommittee. And my 
great appreciation to the members of the panel. I think you 
have given us a lot of very useful information.
    There may be members who have additional questions that we 
may forward on to you for response. And again, please, if there 
is additional information you would like us to see, you have 
leave to provide it to us.
    And thanks again. Travel safely.
    [Whereupon, at 11:37 a.m., the subcommittee was adjourned.]



                            A P P E N D I X


                           September 12, 2002


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