[Senate Hearing 107-996]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-996

                    SUPERFUND PROGRAM: CLEANUPS AND
                             FUNDING ISSUES

=======================================================================

                                HEARING

                               BEFORE THE

     SUBCOMMITTEE ON SUPERFUND, TOXICS, RISK, AND WASTE MANAGEMENT

                                 OF THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                                   ON

 OVERSIGHT OF THE ENVIRONMENTAL PROTECTION AGENCY'S MANAGEMENT OF THE 
                           SUPERFUND PROGRAM

                               __________

                             APRIL 10, 2002

                               __________

  Printed for the use of the Committee on Environment and Public Works




                                 ______

83-691              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                      one hundred seventh congress
                             second session
                  JAMES M. JEFFORDS, Vermont, Chairman
MAX BAUCUS, Montana                  BOB SMITH, New Hampshire
HARRY REID, Nevada                   JOHN W. WARNER, Virginia
BOB GRAHAM, Florida                  JAMES M. INHOFE, Oklahoma
JOSEPH I. LIEBERMAN, Connecticut     CHRISTOPHER S. BOND, Missouri
BARBARA BOXER, California            GEORGE V. VOINOVICH, Ohio
RON WYDEN, Oregon                    MICHAEL D. CRAPO, Idaho
THOMAS R. CARPER, Delaware           LINCOLN CHAFEE, Rhode Island
HILLARY RODHAM CLINTON, New York     ARLEN SPECTER, Pennsylvania
JON S. CORZINE, New Jersey           BEN NIGHTHORSE CAMPBELL, Colorado

                 Ken Connolly, Majority Staff Director
                 Dave Conover, Minority Staff Director
                                 ------                                

     Subcommittee on Superfund, Toxics, Risk, and Waste Management

                  BARBARA BOXER, California, Chairman

MAX BAUCUS, Montana                  LINCOLN CHAFEE, Rhode Island
RON WYDEN, Oregon                    JOHN W. WARNER, Virginia
THOMAS R. CARPER, Delaware           JAMES M. INHOFE, Oklahoma
HILLARY RODHAM CLINTON, New York     MICHAEL D. CRAPO, Idaho
JON S. CORZINE, New Jersey           ARLEN SPECTER, Pennsylvania


                            C O N T E N T S

                              ----------                              
                                                                   Page

                             APRIL 10, 2002
                           OPENING STATEMENTS

Baucus, Hon. Max, U.S. Senator from the State of Montana.........    51
Boxer, Hon. Barbara, U.S. Senator from the State of California...     4
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..    17
Chafee, Hon. Lincoln, U.S. Senator from the State of Rhode Island    12
Clinton, Hon. Hillary Rodham, U.S. Senator from the State of New 
  York...........................................................    13
Corzine, Hon. Jon S., U.S. Senator from the State of New Jersey..    15
Jeffords, Hon. James M., U.S. Senator from the State of Vermont..    50
Smith, Hon. Bob, U.S. Senator from the State of New Hampshire....    52

                               WITNESSES

Cope, Grant, staff attorney, U.S. Public Interest Research Group, 
  Washington, DC.................................................    43
    Prepared statement...........................................    59
    Responses to additional questions............................    65
Cornell, Kenneth, executive vice president and chief underwriting 
  officer, AIG Environmental, New York, NY.......................    46
    Prepared statement...........................................    74
    Responses to additional questions from Senator Jeffords......    77
Horinko, Marianne Lamont, Assistant Administrator, Office of 
  Solid Waste and Emergency Response, Environmental Protection 
  Agency.........................................................    18
    Prepared statement...........................................    53
Lopez-Reid, Norma, city council member, Montebello, CA...........    36
    Prepared statement...........................................    55
Nelson, Hon. Bill, U.S. Senator from the State of Florida........     1
    Prepared statement...........................................     3
Spiegel, Robert, executive director, Edison Wetlands Association, 
  Inc., Edison, NJ...............................................    38
    Prepared statement...........................................    57
Steinberg, Michael W., Morgan, Lewis & Bockius, Washington, DC, 
  representing the American Chemistry Council....................    44
    Prepared statement...........................................    66
    Responses to additional questions from Senator Smith.........    72

                          ADDITIONAL MATERIAL

Charts:
    The Bush Administation has Decreased the Pace of Cleanups....  5, 9
    Under the Bush Administration, Taxpayers are Paying More and 
      Polluters are Paying Less, Superfund Funding Source........    10
E-Mail to 31 EPA Management & Staff..............................     6
Letter from the Committee on Environment and Public Works, March 
  8, 2001, to Wayne Nastri, Regional Administrator, Environmental 
  Protection Agency..............................................     7
Responses by EPA Administrator Christine Todd Whitman to 
  additional questions from Representative Dingell...............     8
Statements:
    Friends of a Clean Hudson....................................    80
    Peone, Alfred, chairman, Spokane Tribe of Indians............    79
    Spitzer, Elliot, attorney general, State of New York.........    83

 
             SUPERFUND PROGRAM: CLEANUPS AND FUNDING ISSUES

                              ----------                              


                        TUESDAY, APRIL 10, 2002

                               U.S. Senate,
         Committee on Environment and Public Works,
         Subcommittee on Superfund, Toxics, Risk and Waste 
                                                Management,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:10 a.m. in 
room 406, Dirksen Senate Office Building, Hon. Barbara Boxer 
(chairman of the subcommittee) presiding.
    Present: Senators Boxer, Clinton, Chafee, Corzine, and 
Carper.
    Senator Boxer. The committee will come to order.
    We have a very important hearing today on the status of the 
Superfund program at EPA, and we're going to depart from our 
usual way of opening statements of the committee because 
Senator Nelson has 11 university presidents waiting for him in 
his office, and we all understand the importance of his being 
there, so, Senator Nelson, we are very pleased to have you, so 
why don't you proceed with an opening statement.

      OPENING STATEMENT OF HON. BILL NELSON, U.S. SENATOR 
                   FROM THE STATE OF FLORIDA

    Senator Nelson. Madam Chairman, I wanted to come and 
personally give you testimony because the subject matter of 
this hearing today not only affects the Nation, but Florida is 
particularly affected because we are ranked sixth of all the 50 
States in the number of Superfund sites. Currently there are 
listed 51 Superfund sites in Florida that are on the National 
Priority List, and I have visited several of those sites, 
including places like Tampa, Pensacola, and Jacksonville.
    What I'm finding is that the old politics that we've grown 
up with--and this is a new day--we have got to think outside 
the box. The old politics was business versus the environment. 
Well, it doesn't play out like that any more. Take, for 
example, the community of Pensacola. Some of the most vigorous 
people in advocating the cleanup of the environmental pollution 
in that community are the Chamber of Commerce, because they 
recognize that businesses are not going to want to move to 
Pensacola and Escambia County, and those that are there may be 
considering moving away, or certainly not expanding, if they 
don't get that environmental cleanup straightened out.
    I've seen the other human effects, as well. I've walked 
through a neighborhood that was totally abandoned. It was shut 
down. It was located next to something known as ``Mount 
Dioxin.'' All of that mountain of polluted materials is still 
there.
    These are the kinds of things that are facing us, and so 
the old ways of looking at it between business versus 
environmentalists just isn't there. We're talking about the 
quality of life in our communities, so I wanted to come and 
share these thoughts with you.
    Now, I think it is also interesting when you look back at 
the history of Superfund. I had the privilege in 1980 of being 
in the House of Representatives and I voted for it. There was a 
deal that was struck then between oil and chemical companies, 
and there was going to be--under the theory that the polluter 
pays, we were going to create a trust fund and, for future 
cleanups, if you couldn't get the money from the particular 
entity that was responsible for it, if they had gone bankrupt, 
if they had flown the coop, if there weren't any assets, then 
at least you had this fund that you could tap, and that fund 
was funded and re-nourished on a continuing basis under the 
philosophy that the polluter will pay.
    It is also interesting--it is my understanding, and I wish 
you'd correct me if I am in error, but I think this is an 
accurate statement--that part of the negotiation that went on 
back in 1980 with the oil companies was there would be a 
release of liability for those oil companies in exchange for 
them agreeing to have this polluter pay or the funding source 
coming in from the companies.
    Senator  Boxer. That's right.
    Senator  Nelson. Now suddenly the Administration is saying, 
``Well, we want to eliminate that source of funding for these 
trust funds''? Well, wait a minute. That was part of the deal 
22 years ago.
    The bottom line is, with the trust fund running out of 
money--and I think it is down to something pitifully low, like 
about $20 million--so cleanup of Superfund sites, cleanup of 
polluted sites is a very expensive proposition and you're not 
going to always be able to find the person who is responsible 
that has the financial resources to do it, and so in the 
interest of the Nation it is important that we continue with 
the policy, the public policy set forth back in 1980 and 
supported by subsequent Administrations, be they Democrat or 
Republican, that gave a source of funding so that we could 
clean up our neighborhoods and not let our children be exposed 
to these various toxic substances that are there.
    Now, that's the essence of my statement. I have a fancy 
written statement, Madam Chairman, and I'd be happy, with your 
permission, to insert it for the record.
    Senator Boxer. Without objection.
    Senator Nelson. That's why I'm passionate about this. This 
is a question of quality of life. This is a question of good 
business practices for communities. Because of that, there 
should be no question of environmentalist or business bent. 
There should be no question of partisanship. This is a question 
about the quality of life in America, and I wanted to come and 
lend my thoughts to this, Madam Chairman.
    [The prepared statement of Senator Nelson follows:]
 Statement of Hon. Bill Nelson, U.S. Senator from the State of Florida
    The Superfund Oversight Hearing will examine the underlying basis 
for change in projected site cleanups, the impact of Superfund site 
cleanup progress on communities, and whether the shift in funding 
composition has played a role in slowing down Superfund site cleanups.
    Madame Chairwoman, Members of the Environment & Public Works 
Committee, thank you for allowing me to give a statement regarding the 
Superfund program and its impact on Florida.
    Out of the 50 states, Florida is ranked 6th in the number of 
Superfund sites with 51 currently on the national priority list.
    I have visited several Superfund sites in Florida including those 
in and around Pensacola, Jacksonville and Tampa.
    Each site I visited reinforced to me the great need each of these 
communities have for fast, efficient clean up--without funding delays. 
Every day a cleanup initiative is put off, the ill health effects, 
environmental damage and economic hardship compound.
    As you all know, the purpose of the Superfund program was to ensure 
that polluters pay.
    The Bush administration's decision to not re-authorize the 
corporate polluter's tax shifts the burden of clean up of these 
hazardous waste sites to the taxpayer.
    As a result, taxpayers will be paying more and fewer sites will be 
cleaned up.
    Enacted in 1980, Superfund's (CERCLA's) purpose is to authorize the 
Federal Government to respond swiftly to hazardous substance 
emergencies and protect public health and the environment by cleaning 
up the nation's worst hazardous waste sites.
    The law seeks to make those responsible for the improper disposal 
of hazardous waste bear the costs and accept responsibility for their 
actions, and it also established the Hazardous Substance Superfund 
Trust Fund to finance response actions where a liable party cannot be 
found or is incapable of paying cleanup costs.
    Taxes were re-authorized under Pres. Reagan and Pres. Bush Sr. The 
Republican House did not re-authorize the tax in 1995 when Pres. 
Clinton requested it.
    In the past 2 years, there has been a steep decline in the pace of 
Superfund cleanup completions.
    From 1997 to 2000, EPA averaged 86 construction completions per 
year.
    In 2001, the Administration weakened this pace by setting a lower 
goal of 75 construction completions, which EPA missed by 28 
completions. The Administration's 2003 budget lowers the goal to 40 
construction completes.
    This is unacceptable.
    It appears from the EPA's own website that at least two sites in 
Florida have been negatively impacted by this slowdown.
    The Tower Chemical Company Site in Lake County, Florida Superfund 
site, an abandoned pesticide manufacturing facility, has been in need 
of funding for an alternative water supply for more than a year.
    The Solitron Microwave Superfund site in Port Salerno, Florida is 
awaiting funding to install badly needed water lines. However, 
according to the EPA website, obtaining the necessary funding in fiscal 
year 2002 is ``unlikely.''
    These funding deficiencies highlight the impact of the 46 percent 
decline in the pace of cleanup of the nation's most contaminated toxic 
waste sites in the past 2 years.
    This slowdown impairs public health and environmental quality.
    The Administration must ensure a continued source of future funding 
to rebuild the Superfund surplus, which enables EPA to protect public 
health and environmental quality at sites that have no viable parties 
or which have recalcitrant parties who refuse to clean up the 
contamination.
    For these reasons, I support re-authorizing the polluter's pay tax 
and urge the EPA to release all of its information about those sites 
that are being deprived funding. Our communities deserve this 
information and it is imperative to their health that they get it.

    Senator Boxer. Senator, we really thank you very, very much 
for your eloquent statement that you made from the heart. We 
put your official statement in the record. We thank you so very 
much for being here.
    Senator Nelson. You're welcome, Madam Chair.

           OPENING STATEMENT OF HON. BARBARA BOXER, 
           U.S. SENATOR FROM THE STATE OF CALIFORNIA

    Senator Boxer. Believe me, your thoughts are shared by many 
of us.
    What we're going to do now is have opening statements by 
members of the subcommittee. We'll have more people joining us 
because we just had a vote on the floor of the U.S. Senate and 
people will be coming forward. When they come, I will allow 
them to put their statement in the record.
    I will give my statement for the record.
    Today the Superfund, Toxics, Risk and Waste Management 
Subcommittee will conduct an oversight hearing on the Superfund 
program at EPA.
    After Love Canal in 1980, Congress enacted the Superfund 
law to address the serious threat posed by the most toxic waste 
sites threatening public health and the environment in 
communities all across this Nation. At the heart of the 
Superfund law is a commitment to clean up these highly toxic 
sites as quickly as possible, given the dangers posed by 
widespread disposal of chemicals, including carcinogens, at 
these sites. So this isn't some theoretical program, it's a 
real program that has real benefits to the communities.
    Also central to the Superfund law is the commitment to 
ensure that the polluters responsible for the contamination, 
not the general public, pay for the cleanup. I often say my 
mother always said, ``Clean up your room. If you make a mess, 
you've got to clean it up. You've got to be held responsible.'' 
That's another basic premise of this program.
    Here's the good news: the Superfund program has made 
excellent progress. Over the past 4 years, there has been an 
average of 87 final cleanups each and every year. An industry 
group--and I'd underscore ``industry group''--known as the 
``Superfund Settlements Project'' issued a report in December 
2000, finding:

        ``that in the years since 1995, Superfund has achieved levels 
        of operational progress and public acceptance it has never 
        before experienced. EPA deserves to be extremely proud of what 
        has been accomplished in the field. Certainly the end is now in 
        sight to complete the basic remediation at those high-priority 
        sites.''

    That was 1995.
    I want to say that in my own home State this is an 
extremely important issue because California has the second-
highest number of Superfund sites in the country, second only 
to New Jersey. Over 40 percent of Californians--let me repeat 
that--over 40 percent of Californians, and we have 34 million 
people, live within 4 miles of a Superfund site. So, again, 
this is not theoretical for me or for many members of the 
committee.
    Anyone who lives anywhere near a Superfund site knows about 
the terrible damage these sites do to the community. Parents 
worry if their kids are safe when they find out there's a toxic 
mess down the street, real estate values go down the drain, and 
major challenges must be overcome to get the responsible 
parties to own up to their responsibility.
    The good news is that fantastic progress was being made, 
and that progress has made a real difference in people's lives. 
Unfortunately, the most important parts of the program--the 
pace of the cleanup and the principle that polluter must pay--
are now under attack by this Administration. Let me repeat 
that. The pace of the cleanup and the fundamental principle 
that the polluter must pay are now under attack.
    As recently as May 2001, Administrator Whitman confirmed in 
writing that 75 National Priority List sites would be cleaned 
up in 2001 and 65 would be completed in 2002. Just 4\1/2\ 
months after making this promise, only 47 sites had been 
completed, not 75. Somehow, 28 of the Nation's most heavily-
contaminated sites fell right off the list. Twenty-eight 
communities that worked for years and finally saw the end in 
sight are now waiting and wondering why.
    Clearly, the problem is compounded when we look at EPA's 
new revised projections in the President's fiscal year 2003 
budget, which proposed that 40, not 65, cleanups will be 
completed in 2002. Let's just look at this chart, because you 
can see what the pace is. In 2001, the actual cleanup, 47 sites 
when 75 were promised; 2002, we see the original estimate of 65 
going down now, revised estimate to 40. So we are seeing a 
terrible trend here in what was originally promised and what is 
actually going to happen. No question the slowdown is dramatic. 
You can see it on this chart.
    [The referenced chart follows:]
      
    [GRAPHIC] [TIFF OMITTED] T3691.003
    
      
    Senator Boxer. So when we saw what happened, that statement 
in 1995 of excitement, that things were moving, suddenly 
everything is reversed.
    Interestingly, it is very hard to get a good picture of 
which sites have dropped off the list. Some communities were 
told specifically they would not get funding. Then a story 
appeared in the ``New York Times,'' and we're going to put that 
in the record with unanimous consent. After that story appeared 
in the ``New York Times,'' Assistant Administrator Horinko, who 
is with us today, directed that an e-mail be distributed 
throughout EPA. It went to anyone who might know which sites 
would likely be cut off this year. The e-mail says, ``Anyone 
who calls should be told there is no formal list.'' The gag 
order went out and the information was hidden from the people 
most affected. You see here this e-mail we were able to get 
from inside the EPA.
    [The referenced document follows:]
      
    [GRAPHIC] [TIFF OMITTED] T3691.002
    
      
    Senator Boxer. I think one of the most interesting things 
is that we are really hiding from the country, from the people, 
what is the future of their communities, and it is being done 
by design and it is exceedingly upsetting to this Senator.
    I think what else is interesting is that you see that any 
questions being called from throughout the country are not 
directed to people who know about the cleanup but to the 
communications people in the EPA. This is about spin. All the 
calls have to go to the communications people.
    I have a chart that contains the text of those e-mails. I 
think what was also interesting is how many people actually got 
that. Do we have that?
    Thirty-one people got this particular e-mail, and then 
later there were 200 e-mails sent out to another 200 people 
saying the same thing. I find it implausible that halfway 
through this fiscal year there's no list of the sites that will 
be cleaned up this year, this fiscal year, no list. That's what 
they're telling people. Now everyone is in limbo. It makes it 
hard for those who want their communities cleaned up to know 
what to do.
    I believe that these communities have a right to know where 
they stand. Some were told they were off the list for funding 
before the e-mail went out, and one of those communities will 
testify at our hearing today. They were told before, and then 
the individual who told them was told, ``Don't say anything 
else. Don't tell the people.''
    Now, the Environment and Public Works Committee asked for 
documents and information on these issues. It was requested 
several weeks ago. Despite numerous calls and promises to 
deliver the information, we received yesterday a skimpy, 
unresponsive reply to our questions, and it is difficult for us 
to get to the bottom of this apparently serious problem when 
such an effort is made, in my opinion, to hide information from 
the American people, including their representatives in the 
Congress.
    [The referenced documents follow:]
      
                                               U.S. Senate,
                 Committee on Environment and Public Works,
                                     Washington, DC, March 8, 2001.
Wayne Nastri, Regional Administrator,
Environmental Protection Agency,
San Francisco, CA.
    Dear Administrator Nastri: We are writing to gather information on 
whether there is a backlog of Superfund sites that are ready to proceed 
but stalled by a lack of funding. On behalf of the Senate Committee on 
Environment and Public Works, we would appreciate your cooperation in 
gathering information pertinent to your region's Superfund program so 
that we may better understand this situation. Specifically, we are 
interested in answers to the following questions.
    (1) Please identify (by name and state) each non-Federal NPL site 
where a remedial design, remedial action, or work on an operable unit 
was not initiated or carried forward due to lack of funding for such 
design, action, or work in fiscal year 2001 or fiscal year 2002.
    (2) Please provide all memoranda, electronic mail, or other 
documents that identify or discuss in any manner the non-Federal sites 
that were or are candidates for construction completion in fiscal year 
2001, fiscal year 2002, or fiscal year 2003.
    (3) Please provide all memoranda, electronic mail, or other 
documents that discuss funding, or the lack thereof, for a remedial 
action, a remedial design, or work on an operable unit in fiscal year 
2001 or fiscal year 2002 at any non-Federal NPL site.
    (4) Please identify (by name and state) each non-Federal NPL site 
which initiated a remedial action or began work on an operable unit in 
fiscal year 2001 or fiscal year 2002. Further, please indicate whether 
the remedial action or initiation of work on an operable unit was the 
first start at the site.
    (5) For the 436 non-Federal sites that were listed on the NPL in 
fiscal year 1998 or earlier and are not yet construction complete, 
please identify (by name and state) whether it is a potentially 
responsible party lead site, a fund lead site, or undetermined. 
Further, for the sites that are a potentially responsible party lead 
site, identify the lead PRP(s) and indicate whether the potentially 
responsible parties are doing the cleanup pursuant to a consent decree 
or unilateral administrative order, or administrative order or consent.
    (6) For each of the non-Federal fund lead site that have not 
completed construction but where a final Record of Decision has been 
signed, please indicate the estimated cost of the remedial work 
necessary to reach the status of construction complete. Please identify 
the site, the state, and the estimated cost of the work remaining to 
get to construction completion status. Further for all other fund-lead 
NPL sites, please estimate the cost of the remaining remedial work.
    (7) For all non-Federal NPL sites, please estimate the total cost 
of the cleanup at the site or if necessary provide a range of costs.
    Please provide us with this information by March 18. If your staff 
has any questions, they may contact Cameron Taylor, EPW Committee 
majority staff, at 202-224-3339, or Marty Hall, EPW Committee minority 
staff at 202-224-6187.
            Sincerely,
                                              Jim Jeffords,
                                                          Chairman.
                                                 Bob Smith,
                                                    Ranking Member.
                                      Barbara Boxer, Chair,
           Superfund, Toxics, Risk & Waste Management Subcommittee.
                            Lincoln Chafee, Ranking Member,
           Superfund, Toxics, Risk & Waste Management Subcommittee.
                                 ______
                                 
  Responses by EPA Administrator Christine Todd Whitman to Additional 
                 Questions from Representative Dingell
    Question 1. In the past 4 years, the Superfund program has made 
excellent progress by averaging 85 construction completions per year. 
Will you manage the program in a manner that will maintain at least 85 
construction completions per year?
    Response. EPA will continue to emphasize construction completions 
as a key priority for the Superfund program, and will continue and 
build upon its past efforts to expedite the rate at which Superfund 
sites are cleaned up. EPA has been anticipating a reduction in 
construction completions due to prior year Superfund budget reductions. 
Further, when determining cleanup targets for each year EPA evaluates 
the status of sites on the NPL and the best estimates of program 
managers concerning when each site can be brought to construction 
completion given the complexity of the site, progress to date, 
remaining work, and availability of resources to complete construction. 
In particular, as the number of construction completion sites has grown 
we have found that sites with remaining work tend to be more complex, 
on average, than those already complete. Given these considerations, in 
February 2000, EPA set a goal of 75 construction completions for fiscal 
year 2001. For fiscal year 2002, the Agency's target is 65 construction 
completions.

    Question 2. The Clinton administration, in testimony before this 
Committee, made a commitment that it would reach construction 
completions at 900 Superfund NPL sites by the end of fiscal year 2002. 
Will the EPA under the Administration of President Bush reaffirm the 
commitment to reach ``construction complete'' status at 900 Superfund 
NPL sites by the end of fiscal year 2002?
    Response. In the fiscal year 1998 budget request, EPA set the goal 
of reaching 900 construction completions by the end of fiscal year 
2002. Reaching 900 construction completions remains EPA's goal. Current 
estimates indicate that the Agency will achieve construction 
completions at 897 NPL sites by the end of fiscal year 2002. This 
reflects 757 construction completions achieved through the end of FY 
2000, and the goals of 75 and 65 construction completions in fiscal 
year 2001 and fiscal year 2002, respectively.

    Question 3. Does the Superfund budget proposed by President Bush 
contain the necessary level of funding to (a) maintain the pace of 
achieving 85 construction completions per year and (b) keep the 
Superfund program on the path to achieve 900 construction completions 
by the end of fiscal year 2002? Please provide an explanation of how 
the President's budget will, at a minimum, maintain the excellent 
progress in cleanups.
    Response. The President's budget provides resources consistent with 
EPA's goal for construction completions provided in the responses to 
questions 1 and 2. Moreover, because of the lag between when. funds are 
appropriated and when they are expended for construction, funding in 
any given fiscal year primarily influences construction completions in 
the following years. Typically, Superfund construction outlays are 
expended over a 4- to 5-year period.

    Question 4. How does President Bush's budget for the Superfund 
program in fiscal year 2002 compare with the budget request submitted 
by President Clinton for fiscal year 2001?
    Response. The fiscal year 2001 budget request for Superfund was 
$1.450 billion. The fiscal year 2001 appropriated funding level was 
$1.267 billion, which reflected reductions attributed to no longer 
funding the Agency for Toxic Substances and Disease Registry (ATSDR) 
and the National Institute of Environmental Health Sciences (NIEHS) 
through Superfund program appropriations. The President's fiscal year 
2002 budget requests $1.268 billion for the Superfund program.

    Question 5. With respect to new site listings on the Superfund NPL, 
in the past 2 years (FY 1999-FY 2000) the top four states have 
accounted for 38 percent of the total new listings: New York (10 
sites); Texas (7 sites); New Jersey (6 sites); and Louisiana (5 sites). 
What is the EPA's understanding of why these states felt it was 
necessary to rely on the Federal program to clean up the sites as 
opposed to individual state programs? If there are different reasons 
for different states or sites please provide them. What did the state 
officials indicate was the reason for the State Governors concurring in 
the listing of the site on the NPL?
    Response. NPL listing decisions are made in close collaboration 
with our state partners in order to appropriately address the needs of 
individual sites and their surrounding communities. Typically, a site 
is listed when EPA and the state agree that it is most effectively 
addressed under the Federal program and that listing enables EPA and 
the state to most efficiently apply their resources to protecting 
public health and the environment. An explanation of the Superfund 
listing process can be found at 46 FR 8845, subsection 300.425.

    Senator Boxer. Now, I fully expect EPA today will try to 
convince us that there's a reason for this slowdown. Let's put 
up that chart again on the slowdown.
    [The referenced chart follows:]
      
    [GRAPHIC] [TIFF OMITTED] T3691.003
    
      
    Senator Boxer. They're going to say, ``Well, the sites that 
were cleaned up before in the Clinton administration, those 
sites were pretty much the easy sites, the garden variety 
sites. They have been cleaned up, and only the tough sites 
remain.'' We will disprove that point today. We have a witness 
from Montebello, CA, who lives next to one of the most complex, 
heavily-contaminated sites in the country. She will report on 
the successful work completed at that site during the previous 
Administration, a tough, tough site.
    Superfund also faces another major problem that flies in 
the face of the polluter pay principle. The problem is that 
revenues from the Superfund tax previously paid by the oil 
companies and the chemical industry, as Senator Nelson alluded 
to, is nearly gone. The tax expired in 1995. President Clinton 
repeatedly tried to get it reinstated. President Bush has 
specifically said he will not do so in his current budget. This 
means that a greater and greater share of the cost of Superfund 
cleanups are born not by the polluters but are shifted to all 
taxpayers.
    Let's look at this chart, because it shows you what is 
happening to the general taxpayer at the current rate it is 
going. We see that in 1995, 82 percent was paid by industry and 
the taxes industry paid, the general taxpayer 18. It is moving 
to 54 percent general taxpayer under an Administration that 
says it abhors burdening taxpayers.
    [The referenced chart follows:]
      
    [GRAPHIC] [TIFF OMITTED] T3691.001
    
      
    Senator Boxer. We've got a scenario here, I say to my 
colleagues, that is extremely serious. First we have a 
situation where the number of cleanups are being dramatically 
cut back--cut back even from this Administration's own 
projections--and now we have a serious situation where the 
burden is shifting to the taxpayers from the polluters that 
caused the trouble in the first place.
    Polluter pay is fair. It has worked well. To shift the 
burden to all taxpayers is wrong, and many of us will fight to 
stop this trend.
    To conclude, let me say that I view Congress' oversight 
function as an extremely important one. We will get answers to 
our questions, even if we have to resort to subpoenas to get 
the information. We are going to do that if we have to. There 
is no reason to hide from the American people who live in these 
communities what their future is going to be. Too much is 
hanging on this--health and safety, real estate values, the 
quality of life for these people. So we're going to work very, 
very hard.
    [The prepared statement of Senator Boxer follows:]

        Statement of Hon. Barbara Boxer, U.S. Senator from the 
                          State of California

    Today the Superfund, Toxics, Risk and Waste Management Subcommittee 
will conduct an oversight hearing on the Superfund Program at EPA.
    After Love Canal in 1980, Congress enacted the Superfund law to 
address the serious threat posed by the most toxic waste sites 
threatening public health and the environment in communities throughout 
the country. At the heart of the Superfund law is a commitment to clean 
up these highly toxic sites as quickly as possible given the dangers 
posed by widespread disposal of chemicals, including known carcinogens, 
at these sites. Also central to the Superfund law is the commitment to 
ensure that the polluters responsible for the contamination, not the 
general public, pay for the cleanup.
    The Superfund program has made excellent progress. During the past 
4 years, there has been an average of 87 final cleanups a year. An 
Industry Group known as the Superfund Settlements Project issued a 
report in December 2000 finding that ``[i]n the years since 1995, 
Superfund has achieved levels of operational progress and public 
acceptance it had never before experienced . . . EPA deserves to be 
extremely proud of what it has accomplished in this field . . . 
Certainly the end is now in sight to complete the basic remediation at 
those high priority sites.''
    This is an important issue in California. California has the second 
highest number of Superfund sites in the country after New Jersey. More 
than 40 percent of Californians live within 4 miles of a Superfund 
site.
    Anyone who lives anywhere near a Superfund site knows about the 
terrible damage these industrial sites do to the community. Parents 
worry if their kids are safe when they find out there is a toxic mess 
down the street; real estate values go down the drain; and major 
challenges must be overcome to get the responsible parties to own up to 
their responsibility. The good news was that fantastic progress was 
being made, which made a real difference in people's lives.
    Unfortunately, the most important parts of the program--the pace of 
the cleanup and the principle that the polluter must pay--are now under 
attack.
    As recently as May 2001, Administrator Whitman confirmed in writing 
that 75 National Priority List sites would be cleaned up in 2001 and 65 
would be completed in 2002. Just 4\1/2\ months after making this 
promise, just 47 sites had been completed for the year.
    Somehow, 28 of the nation's most heavily contaminated sites fell 
right off the list. 28 communities that worked for years and finally 
saw the end in sight, are now waiting and wondering why.
    Clearly the problem is compounded when we look at EPA's new revised 
projections in the President's fiscal year 2003 budget which proposes 
that 40, not 65 cleanups, will be completed in 2002. Another 40 are 
projected to be cleaned up in 2003.
    No question, the slow down is dramatic. I have a chart that 
illustrates exactly how dramatic the changes are. This chart shows the 
final cleanups achieved and projected since the start of the program. 
The slow start, the jump up after the Administrative reforms in 1995, 
and the steep decline with the new Administration.
    Interestingly, it is very hard to get a good picture of which sites 
have dropped off the list. Some communities were told specifically they 
would not get funding. Then, after a story appeared in the New York 
Times, Assistant Administrator Horinko directed that an e-mail be 
distributed throughout EPA. It went to anyone who might know which 
sites would likely be cutoff this year. The e-mail says anyone who 
calls should be told there is no formal list. The gag order went out 
and the information was hidden from the people most affected.
    I have a chart that contains the text of one of those EPA e-mails--
this e-mail makes clear that EPA officials are to follow a script and 
not identify which sites are being kicked off the list.
    I find it totally implausible that half way through the fiscal year 
there is no list of the sites that will be cleaned up and those that 
won't.
    Now everyone is in limbo. This makes it hard for those who want 
their communities cleaned up to know what to do. I believe that these 
communities have a right to know where they stand. Some were told they 
were off the list for funding before the e-mail went out. One of those 
communities will testify at our hearing today.
    The Environment and Public Works Committee asked for documents and 
information on these issues. They were requested several weeks ago. 
Despite numerous calls and promises to deliver the information, we have 
received on Tuesday, weeks late, a skimpy and unresponsive reply to our 
questions. It is difficult to get to the bottom of this apparently 
serious problem when such a conscious effort is made to hide 
information from the American people.
    I expect EPA to come here today and to try to convince us that the 
sites have become more complex--that garden variety sites have been 
cleaned up--and the tough sites remain.
    We will disprove this point today. We have a witness from 
Montebello, California who lives next to one of the most complex, 
heavily contaminated sites in the country. She will report on the 
successful work completed at that site during the previous 
Administration.
    Superfund also faces another major problem that flies in the face 
of the polluter pays principle. The problem is that revenues from the 
Superfund tax, previously paid by the oil and chemical industries, is 
nearly gone. The tax expired in 1995. President Clinton repeatedly 
tried to get it reinstated. President Bush has specifically said he 
will not do so in his current budget. This means that a greater and 
greater share of the cost of Superfund cleanups are borne not by 
polluters, but instead shifted to all taxpayers.
    Funds for cleanups are still recovered from the responsible 
parties. EPA says it will continue to enforce against viable polluters. 
But, that begs the question. In a time of growing demands on limited 
Federal funds, where will the money come from to investigate sites, to 
pursue responsible parties, to do the work when the polluters refuse? 
The responsible parties can be sued later. But, the community should 
not have to wait forever for action. What about the sites where the 
polluter's assets cannot be reached, where they go bankrupt? The answer 
has been: the polluting industries will pay a tax that makes additional 
revenue available in these cases.
    I have a chart here that shows just how the burden has been 
shifting, with general taxpayers contributing just 18 percent in 1995. 
The number is rising and taxpayers will pay 54 percent of the Superfund 
budget by 2003.
    Polluter pay is fair. It has worked well. To shift the burden to 
all taxpayers is wrong, and I will fight to reinstate this fee on 
industry.
    To conclude, let me say that I view Congress' oversight function as 
a very important one. We will get answers to our questions and we will 
not rest until we get some answers and some action. This program is too 
important to people's lives to deal with it any other way.

    Senator Boxer. I want to thank Senator Chafee for his 
leadership on the environment. His family has quite a record on 
this, and he is vigilant on this. At this point, what I'd like 
to do is ask him if he has an opening statement, then I'll turn 
to Senators Clinton, Corzine, and Carper.
    Senator, welcome.

           OPENING STATEMENT OF HON. LINCOLN CHAFEE, 
          U.S. SENATOR FROM THE STATE OF RHODE ISLAND

    Senator Chafee. Thank you, Madam Chairwoman, very much. It 
is a pleasure to be here. Certainly, the evolution of the 
Superfund program since 1980 has been controversial from the 
years of spending months and enormous costs in court, evolved 
into actually spending the money on cleanup. That's because EPA 
was successful in court through the years in supporting the 
polluter pays principle, even retroactively. So I do support 
the reinstitution of the Superfund tax. I know that a lot of 
the projects that are coming up are the expensive ones--Coeur 
d'Alene, Hudson River certainly, and the project in OII in 
California, which I think we'll hear about later. These are 
just enormously expensive cleanups, and a lot of the easy ones 
have been done, but, nonetheless, I do support the 
reinstitution of the Superfund tax.
    Thank you very much, Madam Chair.
    Senator Boxer. Thank you so much, Senator Chafee.
    Senator Clinton.

OPENING STATEMENT OF HON. HILLARY RODHAM CLINTON, U.S. SENATOR 
                   FROM THE STATE OF NEW YORK

    Senator Clinton. Thank you very much.
    I really appreciate the chairperson's leadership on this 
because she has been a strong champion of not only clean 
environment but health and safety, and I think they go hand in 
hand. I appreciate also our colleague, Senator Nelson, coming 
to testify and giving us his perspective from Florida.
    Remember that Superfund really came out of Love Canal in 
New York, and it is, I think, a real tribute to the way our 
system works that we sought a way to assign responsibility for 
these polluted sites, and it is, frankly, disturbing that here 
we are in 2002 talking about whether or not we're going to hold 
corporations responsible for their actions. I mean, I believe 
in responsibility, personal responsibility and corporate 
responsibility, and I hope that, as a result of this 
subcommittee's oversight, we're going to change some minds in 
this Administration so that they will support what is a 
workable program.
    Right now, as we look at the future of the Superfund 
program, I think we have to conclude that we're going to be 
calling it the ``not-so-Superfund,'' then we're going to be 
calling it the ``non-existent fund.'' Right now the trust fund 
will be down to $28 million at the end of fiscal year 2003. 
That's from a high of $3.6 billion. Those dollars were 
collected not from the people who were suffering from the ill 
effects of Superfund sites, but collected from the people who 
profited from the misuse of various materials and chemicals 
that resulted in the toxic sites.
    Now, I want to welcome Mr. Ken Cornell, executive vice 
president and chief underwriting officer for AIG Environmental, 
a New York-based company. He will be educating us today on the 
financial and insurance tools that are available to help speed 
up and oftentimes reduce the costs of the cleanups. Nobody 
wants to exacerbate the costs of cleanups. We want to come with 
a sensible proposal that puts the responsibility where it needs 
to be and has adequate funds to get back on the track we were 
on that Senator Boxer's chart showed. We were making real 
progress. Why do we want to reverse that? I don't understand 
it. It is just stunning to me that we would have a 19th century 
mentality about a 21st-century problem.
    Now, there are a number of pressing sites around the 
country, and I think that we're going to mobilize opinion about 
these sites if we don't get this matter addressed 
appropriately. There are literally millions of people who are 
within a few miles of a lot of these toxic Superfund sites, and 
I don't think they would take kindly to learning that the 
people who put the pollution there are getting let off the hook 
by this Administration.
    I'm also concerned that we did something really good 
finally last year in getting the brownfields bill passed, and I 
particularly want to commend Senators Chafee and Boxer for 
their leadership on this. But I think some people have gotten 
the wrong impression. They are misinterpreting our enthusiasm 
for the brownfields program that something doesn't need to 
happen also with Superfund; somehow we've taken care of the 
problem because we finally have a mechanism in place to address 
brownfields. Well, I think that is far from the case. In fact, 
we need to remain as vigilant as possible with respect to the 
Superfund sites, which everybody understands are different from 
the brownfield sites. I mean, a dry cleaning store that went 
out of business or an old gas station on a corner can be a 
brownfield site, but we talk about some of these large 
Superfund sites, like the Hudson River, which was just finally 
resolved with a record of decision, you know, that can only be 
undertaken with much more effort and focus.
    I think in New York we have somewhere between 85 and 90 
Superfund sites, and we have a number of new sites proposed for 
the listing on the Superfund National Priority List, or the 
NPL. I guess that puts us fourth behind my colleague, Senator 
Corzine from New Jersey and Senator Boxer from California, and 
Pennsylvania is third.
    Now, according to a recent report by Resources for the 
Future, in the next several years the number of sites added to 
the NPL as we learn more is likely to increase, not decrease. 
That makes common sense to me. I mean, we did a lot of things 
in the last 100 years we didn't know the implications of, and 
now we do. That's why this responsibility issue is so critical. 
I mean, it's one thing if--you know, frankly, in 1945 or 1950, 
in the midst of industrialization and war factories and 
industries people were dumping stuff in the aquifer and dumping 
stuff in the rivers and the lakes, and the old industrial 
plants that were churning out products at a great rate, you 
know, polluted the environment. You know, eventually they, too, 
learned they shouldn't be doing it, but a lot of things were 
done out of ignorance. That's no longer an excuse, and that, to 
me, is one of the key issues that we have to address here.
    Many of the Superfund sites that we are going to be 
confronting are potentially developable sites, even Superfund 
sites. We need all the land we can put back into productive use 
for development or for other kinds of social uses.
    When the taxes that supported the fund expired in 1995 and 
the Congress refused to reauthorize them, we were on a glide 
path to where we find ourselves today--inadequate funds, 
increasing number of sites, slowdown in cleanups. In fiscal 
year 2004, when there will be no money left in the fund at all, 
where will the cleanup costs come from?
    Now, those of us who serve on the Budget Committee know 
we're already facing some terrible choices about very difficult 
decisions that have to be made because of the shortfalls in 
revenues that we're confronting. We've moved in just a year 
from surplus to deficit. When we look at who should be 
responsible for certain functions in our society, I just find 
it impossible to believe that the general public wants a 
tradeoff between general revenues paying for cleaning up 
Superfund sites as compared to prescription drugs, for example, 
or continuing to fund the Leave No Child Behind Act. In the 
failure to reauthorize the Superfund polluter paid program, we 
are, in effect, leaving a lot of people behind, leaving them 
behind with polluted sites that they can't cope with on their 
own. No city, no State has the resources alone to clean up what 
is really a national responsibility.
    So I hope that, as we move forward under the leadership of 
our chair and our ranking member, we are going to persuade the 
Administration or else engender enough public outrage that we 
will get back to the basic principle that if you pollute you 
pay, you know, and at some point I think the public, adequately 
informed about this, will agree 100 percent that they shouldn't 
foot the bill for somebody else's profiteering that led to 
pollution that rendered a site in their community unusable and 
unlivable.
    I thank the subcommittee chair for making sure that this 
issue is on the agenda.
    Senator Boxer. Thank you so much, Senator.
    Senator Corzine.

OPENING STATEMENT OF HON. JON S. CORZINE, U.S. SENATOR FROM THE 
                      STATE OF NEW JERSEY

    Senator Corzine. Thank you, Madam Chairman. Let me 
compliment you and the ranking member for your leadership in 
this area. Certainly last year's brownfield bill is a step in 
the right direction, but we have a lot of work to do here in 
the Superfund arena.
    There are a lot of great things about New Jersey. I love 
it, getting more chauvinistic as days go by. But the fact is 
that we have the unfortunate title of having the greatest 
number of Superfund sites in America--111, I believe--and there 
are a number of other sites that have been identified that most 
people would feel qualified, and it is an extraordinarily 
important issue to the quality of life of everyone that lives 
in our community, and I know that's true across this country. 
It's essential that the vitality and the forward direction of 
this program be addressed and supported. The concept of 
``polluter pay'' has broad consensus in our society, from 1980 
and forward. Frankly, the program has worked well. It has been 
revised as time goes on. It had many of the controversies that 
the ranking member talked about, but it has evolved into a 
program that can work, but now we are in a position where $28 
million are in this Superfund and there's a real issue about 
how we are going to fund it going forward.
    Having money come from the general taxpayers to address 
these real issues for real people and real circumstances I find 
not a conundrum at all. We have had a successful ``polluter 
pays'' tax situation which could provide the resources that 
allow for more rapid cleanup.
    I hope that we will have the will. As Senator Clinton has 
said, if we don't have the will, then we are going to have to 
generate the discussion with the public to make sure that they 
give us the will, because these tradeoffs that leave Superfund 
sites out of our Nation's agenda is unacceptable, in our view.
    Just this week Senator Torricelli and I had a series of 
town hall meetings, one of them in Edison, NJ, and we had two 
people stand up, one in virtual tears, with regard to a cleanup 
of a site that has been ready to go for a number of years. We 
are going to hear about it from one of our folks who will give 
testimony today, Bob Spiegel. There is an enormous groundswell 
of support--Republican, Democrat, regardless of background--to 
put back into safe usage a plot of land. This is just one 
example. The Hudson River is another. By the way, it does butt 
up against New Jersey, and so we are more than concerned about 
these kinds of issues.
    This is something that impacts real people's lives every 
day. It's dangerous, and it also is economically depriving of 
resources to local communities, and we ought to move forward. 
We ought to do it expeditiously, and we ought to understand 
what we're doing. The idea of cutting back on the number of 
cleanups I just think is outside the realm of the imaginable, 
and this slowdown must stop and we must reverse course and get 
on with it.
    In fact, I think the ranking member said it right--we have 
many of the most difficult cleanups ahead of us, which only 
reinforces the view that we need to have a financing source 
that will be sound and consistent, and so the Superfund tax 
that expired in 1995, I firmly believe, should be reinstated. 
We need to move forward on this, staying with that polluter 
pays principle, and support the American people, and I'd like 
to say the New Jersey citizens, as well, in making sure that we 
do what I think all of us find is a necessary and positive step 
for the quality of life of American people.
    Thank you.
    Senator Boxer. Thank you, Senator.
    [The prepared statement of Senator Corzine follows:]

        Statement of Hon. Jon S. Corzine, U.S. Senator from the 
                          State of New Jersey

    Thank you Madame Chairman. I want to thank you for holding this 
important hearing. I want to welcome my constituent Bob Spiegel to the 
hearing. I look forward to his testimony.

       SUPERFUND IS AN IMPORTANT AND EFFECTIVE COMPONENT OF OUR 
                    ENVIRONMENTAL PROTECTION SYSTEM

    Superfund is the last line of defense for Americans who live near 
hazardous waste sites.
    That's certainly true in New Jersey, where our state's industrial 
heritage has left us with more Superfund sites than any state in the 
nation.
    During today's hearing, Mr. Spiegel will testify about how 
important this program is at one of New Jersey's 111 Superfund sites--I 
hope I will be able to secure a commitment from EPA today to start 
cleanup on that site, and I'll have more to say about that later.
    I think Mr. Spiegel's testimony vividly illustrates how vital this 
program is to the people of my state and to Americans everywhere who 
find themselves living near a Superfund site.

                   THE PROGRAM HAS BEEN WORKING WELL

    The good news is that the program has been working well.
    Since enactment in 1980, the Superfund program has matured, and has 
undergone both legislative and administrative changes.
    Targeted reform bills--such as the brownfields bill that this 
committee reported out last year--have exempted small businesses, 
recyclers, innocent landowners, and other parties from Superfund 
liability. In addition, the Clinton administration made a series of 
administrative reforms to the program in the 1990's.
    As a result of these reforms, the program has been working really 
well, averaging 86 cleanups a year over the last 4 years of the Clinton 
administration.

                           WHY THE SLOW DOWN?

    In light of all that progress, I think one the important questions 
we need to answer here today is why we have seen such a sudden and 
dramatic slowdown in cleanups in the last year.
    I won't repeat the statistics that Senator Boxer has already gone 
through in detail. But I will repeat the question: what is happening 
with the Superfund program?
    By way of explanation, EPA has maintained that the remaining sites 
on the NPL are more complex, and therefore will take longer to clean 
up. I am skeptical about this claim, and EPA has not yet backed the 
claim up with data. We need to get to the bottom of this issue, and I 
call on EPA to provide Congress with all of the information that we 
have asked for.

               FUNDING SOURCES AND LEVELS REMAIN AN ISSUE

    Whatever the reason for the slowdown, it is clear that the second 
big question about the program is ``who is going to pay for the 
cleanups in the future?''
    A report commissioned by Congress concluded last year that ``a 
rampdown of the Superfund program is not imminent,'' and that current 
or higher levels of funding will be required through at least fiscal 
year 2009.
    Ironically, at the same time, we're running out of money in the 
Superfund, which has been steadily dwindling since the Superfund tax 
expired in 1995. Since that time, the fund has dropped from a balance 
of $3.6 billion to an estimated $28 million in it at the end of the 
next year.
    So starting next year, general taxpayers will be paying for nearly 
the entire Superfund program--which has cost about $1.3 billion per 
year in recent years.
    Madame Chairman, I think that's unfair. We need to restore the 
``polluter pays'' principle by reinstating the Superfund tax. That way 
we will ensure that polluters--not general taxpayers--will pay for 
cleanups of sites where responsible parties can be found. I would 
venture to guess that most of the sites left in the program are sites 
where we're not going to find responsible parties to pay. That's 
certainly the case in New Jersey, based on information provided to the 
committee by EPA.

                               CONCLUSION

    So we need to reinstate the Superfund tax and reinvigorate the pace 
of cleanups under the program, regardless of the cause. The people of 
New Jersey and all Americans are counting on us. Thank you, Madame 
Chairman. I look forward to the testimony of our witnesses.

    Senator Boxer. You are so right. As the chart shows, we are 
looking at cutting the cleanup number of sites in half here, 
down from this Administration's own original estimate, so it is 
just a pathetic chart here. It goes against the very grain of 
our country making progress, just reversing course.
    Senator Carper.

          OPENING STATEMENT OF HON. THOMAS R. CARPER, 
            U.S. SENATOR FROM THE STATE OF DELAWARE

    Senator Carper. Thank you, Madam Chair.
    Several of our colleagues have spoken this morning about 
the prevalence of Superfund sites in their own States and who 
is first, who is second, who is third. Delaware is known as the 
first State--the first State that ratified the Constitution. In 
fact, our State slogan, our brand, is, ``It's good being 
first.'' There are some things you don't want to be first in, 
and this is one of them.
    Senator Corzine. Thanks a lot.
    [Laughter.]
    Senator Carper. There are probably some things we're first 
in that we don't want to be, either. But, having said that, we 
still have a real concern about Superfund sites in our State 
that remain to be cleaned up.
    Madam Chairman, I came to the House of Representatives in 
1982, about 2 years after Superfund was authorized and was 
created. In looking back through the 1980s, much of the focus 
with respect to Superfund sites focused more on litigation and 
less on construction and completion. That changed in the 1990s. 
We started using, I think, a whole lot more common sense. We 
had the resources, and instead of focusing as much on 
litigation in the 1990s we began to make real progress in terms 
of cleaning up Superfund sites.
    This year, among the factors I hope we'll consider in this 
hearing and those that might follow is not just the matter of 
should we renew the Superfund tax as it exists. We have--our 
position says we ought to reauthorize it as it has existed. The 
President's position is we ought not to reauthorize it. There 
may be some position in between those two polar positions.
    The second thing I would hope that we would look at, we 
approached Superfund cleanup a whole lot different in the 1990s 
than we did in the 1980s. We learned a lot in the 1980s, and 
hopefully we've learned a lot in the 1990s, and my hope is 
that, rather than just focusing on the source of where the 
revenues are going to come from, that we'll also make sure that 
the dollars that we do raise, whether they're from a Superfund 
tax or general revenues, that we're putting those dollars to 
the best use.
    I'd say the President's position of not reauthorizing the 
Superfund tax would probably ring with more clarity, more 
truthfulness, if we were awash in monies and we were faced with 
a surplus. As it is, we all know that this is a year in which 
we're faced with recession, a war and slowing economy, and 
significant tax cuts. We're not awash with general fund 
revenues any more. We are in a deficit situation and back to 
borrowing from the Social Security and Medicare trust funds, 
and we need to keep that in mind as we approach these issues.
    I look forward to the testimony, and thank you for the 
chance to offer these words, Madam Chair.
    Senator Boxer. Thank you so much for joining us, Senator 
Carper.
    Our first witness today is Ms. Marianne Horinko. Ms. 
Horinko serves as assistant administrator for the Office of 
Solid Waste and Emergency Response at the Environmental 
Protection Agency. I've asked her if she is willing to be sworn 
in and she has, so I would ask if you would raise your right 
hand.
    Do you swear to tell the truth, the whole truth, and 
nothing but the truth?
    Ms. Horinko. Yes, I do.
    Senator Boxer. Thank you very much. We would look forward 
to your testimony.

STATEMENT OF MARIANNE LAMONT HORINKO, ASSISTANT ADMINISTRATOR, 
  OFFICE OF SOLID WASTE AND EMERGENCY RESPONSE, ENVIRONMENTAL 
               PROTECTION AGENCY, WASHINGTON, DC

    Ms. Horinko. Madam Chair, thank you, and members of the 
subcommittee. I very much appreciate the opportunity to appear 
before you today in my capacity as assistant administrator of 
the Office of Solid Waste and Emergency Response at EPA to 
discuss the Superfund program and identify some of the new 
challenges that EPA faces today as the program enters its third 
decade.
    Administrator Whitman and the Bush administration are fully 
committed to Superfund's mission--protecting human health and 
the environment by cleaning up our Nation's worst hazardous 
waste sites. Today I will briefly outline the innovative ways 
in which EPA is addressing the Superfund program's important 
new tasks. With your permission, Madam Chair, I will submit my 
longer statement for the record.
    Senator Boxer. Without objection.
    Ms. Horinko. The Superfund program continues to make 
progress in cleaning up hazardous waste sites on the National 
Priorities List. Thanks to a decade of bipartisan reforms that 
were launched in the first Bush administration and continued in 
the previous Administration, some 92 percent of the sites on 
the National Priorities List are either undergoing cleanup 
construction or have completed construction. EPA has maintained 
the number of construction projects underway at NPL sites, more 
than 730 per year from fiscal years 1991 through 2001. The 
President's fiscal year 2003 budget request continues a 
commitment to clean up hazardous waste sites by maintaining 
EPA's budget for the Superfund program with a request of $1.3 
billion.
    This Administration reinforced its commitment to the 
polluter pays principle by securing cleanup from responsible 
parties, the companies that caused the mess at these sites, at 
70 percent of Superfund sites. Fiscal year 2001 produced a near 
record in Superfund cost recovery and cleanup commitments from 
the responsible parties.
    I am proud to report that EPA's enforcement program 
generated $1.7 billion last year, nearly $300 million more than 
fiscal year 2000 and the second-highest amount in the history 
of the Superfund program. The cumulative value of responsible 
party commitment since the inception of the program now exceeds 
$20 billion.
    EPA's emergency response program was on the front lines at 
the World Trade Center, at the Pentagon, and the anthrax 
incidents around the country, and the agency is proud of our 
groundbreaking work. EPA, in partnership with the Centers for 
Disease Control, the Agency for Toxic Substances and Disease 
Registry, and the District of Columbia Department of Public 
Health successfully completed the anthrax cleanup in the Hart 
Senate Office Building, a monumental task never before achieved 
in history. EPA is also examining ways to improve chemical site 
security. We have been working closely with representatives 
from the industry, first responders, communities, and 
environmental groups to ensure that high levels of prevention 
are maintained, along with preparedness and responsiveness.
    Thanks to the hard work of the members of this subcommittee 
and others in Congress with the enactment of bipartisan 
brownfields legislation, we can expect to see even greater 
success by States, tribes, and local communities in reclaiming 
brownfield sites and encouraging the cleanup and reuse of sites 
by the private sector. The President's commitment to this new 
law is reflected in our budget, which more than doubles 
proposed brownfields funding to $200 million.
    As the Superfund program continues into its third decade, 
new challenges must be met in order to continue the progress in 
cleaning up hazardous waste sites. In particular, prior to 
fiscal year 2001 EPA had anticipated the potential for a 
reduction in achieving site construction completions and had 
lowered the annual target, even before this Administration took 
over.
    The reduction in the construction completes results from a 
variety of factors, including decisions made over the last 
decade on funding priorities to those sites that were closest 
to construction completion, the size and the number of 
construction projects at the remaining sites, and also the need 
to balance competing environmental priorities in the Superfund 
program.
    In previous years, EPA focused resources on Superfund sites 
that needed very little construction work to get over the line 
and be deemed construction complete. These sites that were 
further along were priorities for the agency and created a 
backlog of sites with significant work that remained to be 
done.
    The size and complexity of these remaining sites generally 
indicate longer project durations. There is now a greater 
number of Federal facilities in very large sites, megasites 
exceeding $50 million in cleanup costs, as a percentage of the 
remaining NPL sites than ever before. Of the remaining 675 
final NPL sites, some 35 percent are megasites and Federal 
facilities, as opposed to only 8 percent of the completed 
sites.
    Given the nature of the remaining sites on the NPL, the use 
of construction completion as the overriding measure of 
Superfund program progress is becoming less meaningful. The 
timeframe needed to complete these larger and more-complex 
sites represents so many years that newer, more meaningful 
environmental indicators need to be developed.
    Currently, the Superfund program is credited with one 
cleanup, whether it is a 100-square-mile former mining site or 
1-acre wood treating site. The public needs tools for measuring 
success that describe the significant accomplishments at these 
more-challenging sites over time, in addition to the 
construction complete.
    EPA is looking for new ways to improve the program's 
performance. The agency has initiated a comprehensive pipeline 
management review of all Superfund projects approaching the 
most expensive phase of our project pipeline, which is 
construction. I would expect the first phase of this review to 
be complete in the spring, with a draft 3-year plan for 
improving construction completes at the end of the summer. We 
are also launching a national dialogue through the National 
Advisory Council on Environmental Policy and Technology, 
NACEPT, a Federal advisory committee comprised of a broad 
cross-section of stakeholders. The NACEPT Committee will 
examine the role of the Superfund program in addressing these 
very challenging megasites, the appropriate role of listing 
sites on the NPL as one of many tools to address contaminated 
sites, and strategies to improve the program's effectiveness 
and efficiency through coordination with States, tribes, and 
the public. We will work very closely with the members of this 
committee as the NACEPT expert panel debates these important 
public policy issues.
    The President is fully committed to the Superfund program's 
success. Our goal is to fashion a sustainable future course for 
the program as it meets these new challenges and continues into 
its third decade. I look forward to working with Congress in a 
cooperative and a bipartisan fashion as we strive to meet our 
common goal of protecting human health and the environment at 
the Nation's hazardous waste sites.
    Thank you very much. I will be pleased to answer any 
questions you may have.
    Senator Boxer. Thank you, Ms. Horinko.
    We're going to each take 8 minutes in our questioning so we 
can try to get a little more done, and then we'll come back for 
as many rounds.
    You mentioned Federal facilities in your opening statement 
being complicated and expensive. You realize that that has 
nothing to do with what we're talking about today?
    Ms. Horinko. Actually, it does, Senator. It's----
    Senator Boxer. It doesn't come out of the Superfund money.
    Ms. Horinko. It doesn't come out of our budget, but----
    Senator Boxer. Right.
    Ms. Horinko [continuing]. They are still counted on the NPL 
towards meeting our goals, and so----
    Senator Boxer. But I just want to make it clear for 
everyone to understand. Today we are focused on the non-Federal 
sites. We're focused on the sites that get cleaned up with the 
Superfund.
    Ms. Horinko. Actually, I believe both Federal facilities 
and non-Federal facilities are included in those numbers.
    Senator Boxer. But the money, in terms of your own budget, 
does not come out of your budget to clean up the Federal sites, 
so if you were to do all Federal sites in 1 year the money 
wouldn't come from this; is that correct?
    Ms. Horinko. That's right, but we----
    Senator Boxer. OK.
    Ms. Horinko [continuing]. Would still be----
    Senator Boxer. I understand.
    Ms. Horinko. But it would still----
    Senator Boxer. I'm just making----
    Ms. Horinko [continuing]. Hold us back from achieving our 
goals.
    Senator Boxer. I'm just trying to make a point here that we 
are talking about the spending of the Superfund tax and 
Superfund that deals with the non-Federal sites is really the 
focus of this hearing. I mean, I'm for cleaning it all up, but 
the funding there comes from that particular agency. If it's a 
Navy site, it will come out of that budget.
    Ms. Horinko. You illustrated the point.
    Senator Boxer. A Department of Energy site--I just wanted 
to make that clear.
    In your opening statement you said that the Bush 
administration is committed to the mission of Superfund. How 
does this show a commitment to Superfund? You're going 
backwards here. You are going backwards even from your own 
estimates. You went backwards from your original estimate of 75 
to 47, and then, looking out to the future, you're moving back. 
So how does this commitment--I'm an average person and I'm 
saying you say you're for the Superfund program and you're 
cutting the cleanups in half and you've gone down from your own 
estimates. How does that translate to a commitment to this 
program?
    Ms. Horinko. Senator, it is important to note that the 
sites that are just now coming complete actually reflect work 
that has been done over many years, so it is not as though 
we've actually just stopped completing sites. It is as a result 
of spending decisions that were made over a number of years.
    The analogy that I will use is it is akin to building a 
neighborhood. It is as if we came on board and the previous 
developer had spent a lot of time focusing on those homes that 
were already far along and only needed sort of a coat of paint 
and not paying attention to the sites that needed foundation 
work. We now come on board and face the result of the buildout 
in terms of sites that really just have the foundation, and we 
need to do much more construction work to get those sites 
completed.
    But we are going to be really focusing on how we can 
address these more challenging sites where the cleanup 
construction is less far along. Both through the pipeline 
review and the NACEPT process, we hope to examine how to reach 
the right equilibrium in the program between having a good, 
robust listings program, having the right mix of assessment and 
construction work, and then focusing on getting it done in a 
way that a mature, responsible construction management program 
addresses its challenges.
    Senator Boxer. OK. Well, I don't see the evidence for what 
you're saying. We have seen the previous Administration clean 
up some extremely difficult sites. We'll have testimony talk 
about just how difficult some of those sites were. But I think, 
you know, facts are stubborn things, as a very famous former 
President said a long time ago, and the numbers are the numbers 
are the numbers. Well, not only do we see a cutting in half of 
what happened in the previous Administration, but we see a 
cutting back from your own estimates and we see the President 
not even trying to get this Superfund tax in place.
    I think that Senator Carper made a good point. If we had a 
huge surplus, the situation would be very different, but this 
Administration has led us back to deficit. We're in deficit, so 
now is not the time to walk away from a dedicated, targeted fee 
paid by the people who are responsible.
    So when you say this Administration is committed, words are 
easy, but I'm hoping people see behind this because I don't 
think your Administration--you may be, personally, maybe 
Administrator Whitman is. This is not a personal attack, but it 
is an attack on the priorities of this Administration when it 
comes to the environment, because I don't think they have a 
priority.
    Now, do you think people deserve to know if the site next 
door to them is, in fact, still on the list or has been removed 
from the list? Do you think they deserve to know if they call 
your agency?
    Ms. Horinko. On the list of?
    Senator Boxer. The cleanup, of your proposed cleanups.
    Ms. Horinko. I believe the public knows, should know 
everything possible about----
    Senator Boxer. Yes.
    Ms. Horinko [continuing]. A site that we can disclose 
publicly.
    Senator Boxer. OK. Well, could you put up the e-mail, 
please? If that's the case, how could you send out this e-mail 
telling people not to call the people who know but to call the 
communications person, Joe? Then there was another e-mail that 
went out to an even larger list which said, ``Don't talk--'' 
you know, essentially, ``Don't say anything. Just make sure 
that these questions are referred to you,'' and the people who 
originally made the point of telling people were told not to 
continue to do that.
    So I don't--I can't square your answer that people deserve 
to know with your e-mail. How do you square it?
    Ms. Horinko. Actually, Madam Chair, we specifically sent 
out that e-mail because we had concerns about sites that are in 
the current fiscal year that may or may not get funding in 
2002, and we generally don't disclose sites that are eligible 
for funding or not, whether we plan to fund them, for 
enforcement reasons. Often, as a site is proceeding through the 
early phases of the assessment or the cleanup, that is when the 
potentially responsible searches investigation is being done 
for parties to do the cleanup, and we need to use the threat of 
Federal funding as a club to get responsible parties to the 
table, and if they find out that we're actually not going to 
find a site, there's no incentive for them to come forward.
    Senator Boxer. And that was the agency? All the people knew 
this in your agency, I assume, since that is your fundamental 
principle not to talk, right?
    Ms. Horinko. That is a fundamental principle in our 
enforcement program.
    Senator Boxer. Then why do you have to send out an e-mail 
if they already knew it telling them not to talk? If that was 
your philosophy, to protect a lawsuit, why do you send out an 
e-mail? Shouldn't they have known that?
    Ms. Horinko. We're a large agency, Madam Chair, and not 
everyone is always singing off the same page.
    Senator Boxer. Another question. Why didn't you send us--we 
asked--four of us, bipartisan sent a letter to the EPA. We 
wanted all the e-mails that related to cleanups or the pace and 
everything that had to do with it. Why wasn't this sent to us. 
Why did we have to get this from a whistleblower inside?
    Ms. Horinko. My understanding, Madam Chair, is that my 
Congressional Affairs staff worked with your staff to narrow 
the scope of the request, because had we had to look for all of 
the e-mails it would have taken much longer, and we wanted to 
get something to you before this hearing. Certainly we can look 
into that and get back to you, but my understanding is that 
since, in the interest of time, you all wanted to have as much 
information as we could get to you before this hearing----
    Senator Boxer. Well, when we found out about this e-mail we 
didn't have it in our hands. My staff asked the individual at 
your agency about this. He said, ``Is there an e-mail that 
tells people, 'Talk to the communications people. Don't give 
anybody answers'?'' That individual said, ``I know of no such 
e-mail.'' That individual wrote this.
    Ms. Horinko. I would be surprised if that person spoke to 
your committee staff, because generally only our Congressional 
affairs folks talk to your committee.
    Senator Boxer. He did. So I guess someone didn't get your 
rule, but the bottom----
    Ms. Horinko. There you go.
    Senator Boxer [continuing]. The bottom line is the 
individual who actually wrote this denied the existence of this 
e-mail. So what I'm saying--and I'll stop here because my time 
is up, but I'll come back for another round--you'll be happy to 
know I'll take a break now from my questions. The picture I'm 
getting here is not a pretty picture, really. The picture I'm 
getting is of an Administration that says they're concerned. I 
mean, your language, this great program, we have a commitment, 
and yet the facts are cutting back the cleanup sites. Then, 
when there's a ``New York Times'' story that comes out that 
says, ``Polluter pays is being abandoned. Sites are being cut 
back,'' an e-mail goes out 2 days after that story and 
basically puts a gag order on folks who were compassionate 
inside the agency to tell people their sites might be in 
trouble and so on and so forth.
    So I don't think this is a very pretty picture. 
Furthermore, we're not getting the e-mails. We're not getting 
everything that we've asked for. Do you know of any other e-
mails that we haven't gotten from within the agency?
    Ms. Horinko. I don't know of any, but I'm sure there must 
be some, because my understanding is that, again, in order for 
us to be responsive in a timely way for this hearing, our folks 
talked to your staff and said, ``Can we narrow the scope of the 
request to specific correspondence?'' But we can look into 
that.
    Certainly, Senator, Madam Chair, we would be pleased to 
follow up and provide a full list of e-mails that address this 
issue.
    Senator Boxer. Well, we got almost no correspondence, so 
I'm glad to hear we can continue to work with you, because we 
are not satisfied with what we have. Again, this e-mail I 
consider very significant, because, guess what, the people in 
my State don't know what the future holds. We have a lot of 
sites. I'll come back to that when I continue my next line of 
questioning.
    Senator Chafee.
    Senator Chafee. Thank you very much.
    Two years ago this subcommittee did have a hearing on the 
pace of cleanups in the Superfund program, and at that time EPA 
testified that they believed they were on track to meet their 
goal of 970 construction completions by the end of fiscal year 
2002, and now 2 years later it appears that they're not even 
going to meet 900 construction completions by the end of fiscal 
year 2003, and I just want to know the background of not being 
able to meet that goal and what role the funding plays in it in 
the absence of having the Superfund tax available, the funds 
available from having the implementation of that Superfund tax, 
why is the EPA not meeting their own goal and what role the 
funding plays in that.
    Ms. Horinko. Thank you, Senator. Those are two important 
questions.
    First of all, concerning the funding, I would note that 
throughout the entire period of years spanning the chart that 
Senator Boxer had put up, that the program was essentially 
level funded, both in the early years when very little cleanup 
was taking place and then during the 1990s when so many 
construction completes were recorded.
    Then, furthermore, during those years, during the early 
years of the 1990s, the tax was in place and the tax actually 
expired in 1995, and during the years that there was no tax 
being collected the program was still level funded.
    So it is important to note that the cleanup activities 
reflect what Congress appropriates to us every year, and 
historically, over the 20 years of the program's existence, the 
mix of revenues has come--mix of appropriations has come, some 
from the Superfund Trust Fund, some from general revenues every 
year. Even when the trust fund contained many billions of 
dollars throughout Democratic and Republican administrations 
and Congresses, the Superfund appropriation stayed relatively 
level and always contained some mix of both trust fund money 
and appropriations.
    As the person charged with managing the program, the figure 
I care most about is the money that is appropriated to me to do 
cleanups with, so certainly the tax is an important issue but 
not directly relevant to the cleanups, particularly because so 
many of the cleanups are done directly by the responsible 
parties, by the polluters, and that has, again, continued to be 
level through Republican, Democratic, and again Republican 
administrations. Of the cleanups, 70 percent are done by 
polluters. This Administration continues to be very committed 
to that principle.
    In terms of the number of constructions that you see there 
and how they could not be forecast to be so high, part of what 
you see on that chart is what former Administrator Lee Thomas 
in the 1980s used to call ``the slug.'' During the early years 
of the program there was a very large number of sites that were 
listed. As you can imagine, it was a new program, and so 
Superfund really focused its attention on putting sites on the 
NPL. Very little construction work was done.
    As the program neared the end of its first decade in 1990, 
the first Bush administration looked at the program priorities, 
much as we are now, and said, ``Wait a second. We need to focus 
less on listing and more on getting things done,'' and so much 
more emphasis was put on getting construction work done. In 
fact, the whole phrase ``construction completed'' was created 
as a goal for the agency to run at. That's why you see in the 
first Bush administration that first line of the cleanups being 
so high. We really focused on construction completion.
    The previous Administration, the Clinton administration, 
built upon that goal and they continued that focus on 
construction completes, and they were able to complete a large 
number of the slug of sights that were listed in the 1980s. 
Throughout that period in the 1990s, comparatively many fewer 
sites were listed on the NPL, only about 10 per year, and it 
takes about 8 to 10 years to get a site to construction 
complete from the time when it's listed.
    So what you see on that curve is we are getting now to the 
end of the universe of sites that were listed in the 1980s and 
we have a relatively smaller pool from which to draw upon 
construction completes in the 1990s. I wasn't around, but I 
have a lot of respect for my predecessors in the previous 
Administration, and I understand that the program had actually 
forecast that we would start to see the end of that curve in 
fiscal year 2000 and, in fact, before this Administration even 
came over started lowering its targets.
    So what you see is basically a program evolution in terms 
of the composition of the NPL, and that's why you see our goal 
now is to try and set the program on a sustainable course where 
we have a good, robust listing programs, a good assessment of 
cleanup program, and still the focus on getting to completion 
so that we really get these sites in, clean them up, stamp them 
done, and hand them back to communities.
    Senator Chafee. You said that the number you like to focus 
on is the amount that Congress appropriates, and, considering 
that Senator Carper said--and I'm sure it's true--that we're 
coming into very tough financial priorities to set here in 
Congress, wouldn't you like to have a funding source more--
something you could depend on better than an annual 
congressional appropriation, and therefore doesn't this 
Superfund tax make sense?
    Ms. Horinko. In an ideal world, if I knew we could 
reinstate the tax and the money would all immediately flow 
right over to EPA, that would be a wonderful thing. But because 
the history of the program is such that, no matter what the 
size of the trust fund is, the appropriation tends to stay 
really level, I tend to focus more on the appropriation.
    A good example would be in the petroleum area, where we 
have $200 million in the LUST trust fund, yet every year my 
appropriation is about $70 million.
    So I'm certainly not ruling out the tax. The Administration 
this fiscal year felt that in the 2003 budget we still had a 
relatively robust funding source in the remaining trust funds, 
that we did not have to propose the Superfund tax, but we will 
look at that again in 2004 and see if we need to revisit our 
position.
    Senator Chafee. Lastly, a lot of the opponents of the 
Superfund tax say, ``We want to see reform of Superfund first 
before the tax is implemented.'' What's EPA's position on 
reform? The program seems to be very successful. Where should 
the reform be, if there should be any at all?
    Ms. Horinko. Senator, I think the program really is 
successful, and the challenges you see are successful, mature 
program challenges. I think it is premature for us to predict 
what kind of legislative reforms or administrative reforms are 
appropriate for the program until we go through this NACEPT 
dialogue. We'd like to use this very public, broad-based 
dialogue to build consensus on needed reforms to the program.
    Senator Chafee. Thank you very much.
    Senator Boxer. Senator Clinton.
    Senator Clinton. Thank you very much. I appreciate your 
being here to testify. I think you understand our concern to 
try to, first of all, get the facts. I mean, it is very 
difficult to get the information that we're looking for to be 
able to make good decisions, and I'm grateful for your stated 
willingness to continue to work with the committee.
    I wanted to ask a couple of specific New York questions. In 
the last couple of days, General Electric has met the deadline 
for filing an offer regarding the Hudson River cleanup; is that 
correct?
    Ms. Horinko. That is correct.
    Senator Clinton. Now, what I'm interested in is whether you 
view what GE has filed as a good faith offer.
    Ms. Horinko. Senator, I can't comment specifically with 
respect to the enforcement aspects. The negotiations, of 
course, are confidential between my EPA Region Two office and 
GE. Certainly, as a lay person, I view it as a step in the 
right direction and, you know, as the person who is the 
guardian of the taxpayers' dollars in Superfund, I firmly am 
committed to the polluter pays principle, and I firmly believe 
that wherever we have a viable, capable PRP, that they should 
do the cleanup. I'm not approaching the Hudson any differently 
than I approach any other site.
    Senator Clinton. Well, I appreciate your commitment to the 
polluter pays principle, because I think that has to remain at 
the center of everything we're doing. Do you know whether GE is 
committed to carry out and pay for the cleanup as laid out in 
the record of decision?
    Ms. Horinko. I believe they have committed to carry out the 
cleanup and pay for EPA's cost in overseeing the cleanup, but 
discussions are underway with the company and my Region Two 
office and I can't comment on those discussions, so we'll see 
within the next few weeks how those discussions come to 
fruition. I'm very hopeful.
    Senator Clinton. I would like to submit some very specific 
questions in writing and receive specific answers as soon as 
you're able to do that.
    On another issue of grave concern to us in New York, I 
appreciated greatly the decision by EPA to help set up an 
Indoor Air Quality Task Force with respect to our air quality 
problems in lower Manhattan. I met with Governor Whitman 
yesterday, and we discussed some of the difficulties that EPA 
is encountering, and we are trying to get to the bottom of this 
problem. I told the governor I would do so, and we're having 
difficulty getting information about what EPA has actually 
requested from FEMA for the task force activities, and I would 
appreciate getting that information today, because clearly 
Governor Whitman said that they made such a request and now 
we're having difficulty actually putting dollars behind that 
information.
    I also believe that this committee and Congressman Nadler 
have outstanding information requests pending at EPA, and I 
would very much appreciate, again, having those requests 
expedited in order to get the information that we requested. 
Time is ticking away in lower Manhattan. People are very 
concerned about the quality of their air in their homes and 
businesses, and every day that goes by I don't think we're 
keeping faith with people in terms of what our commitment has 
been.
    I'm also concerned that, even in your testimony today and 
in testimony that will shortly be given to this committee by 
Councilwoman Lopez-Reid, we know that the EPA has tested homes 
for migrating gases, to determine whether there's elevated 
levels of vinyl chloride or methane gas. We also know other 
examples where, under the Superfund, EPA has taken actions to 
test and conduct cleanups in private homes and places of 
business, such as in Libby, MT, and even right here in the Hart 
Building. I don't understand, Administrator Horinko, why the 
EPA cannot conduct indoor air quality testing and perform the 
necessary cleanups in the homes and businesses in lower 
Manhattan. What is the difference between what was done in 
Libby, MT, and California and in the Hart Building?
    Ms. Horinko. In general, Senator Clinton, my 
understanding--and this is policies that arose prior to this 
Administration--the Superfund program has articulated a number 
of principles under which it will actually proceed into 
people's homes and test indoor surfaces and air and so forth, 
simply out of the concern that the program was designed to be 
an environmental cleanup program and there were concerns that 
we would be inside people's homes cleaning up lead paint and 
consumer products and things of that nature, but where we can 
document that environmental contamination has migrated into a 
home, then we do go in and test and so forth.
    The situation at the World Trade Center involved EPA 
working in cooperation with FEMA and the city and a number of 
other agencies, health agencies, and so we had to make sure all 
of our partners were on board, and this Indoor Air Task Force 
is really a way to get everyone in a cooperative fashion on 
board with the EPA's testing regime. But, in fact, EPA was 
testing inside homes, proposing protocols and proposing 
fundings to ATSDR last fall. We were the most aggressive in 
terms of testing inside people's homes.
    But I agree with you that we need to continue, we need to 
press harder. We need to secure additional funding and we need 
to get the information to the residents as quickly as we 
possibly can.
    Senator Clinton. Well, I really hope that we can work 
together in the next couple of days to try to get some answers 
to these questions, because this has caused a great deal of 
concern. I will ask my staff to work with you and others at EPA 
to try to make sure we move on this.
    Now, I'm also confused by the information that we are 
getting. I know that, in looking at trying to determine which 
of the fund-lead sites will be started this year, which are 
listed on the NPL, you know, we've gotten contradictory 
information. I've got three lists in front of me, all of which 
were provided to the committee by EPA. On one list we have no 
proposed new start remedial actions for New York, on another 
list we have one, and on another list we have five. It's very 
difficult to sort all this out. I'm particularly concerned that 
either information is not being conveyed or the right and left 
hands are not communicating and we have different ways of 
compiling and assessing the information, and I would like to 
know specifically which sites are going to be targeted for 
cleanup, which are on the NPL in New York so that at least I 
can adequately communicate with my constituents who ask what is 
going to be happening. I'm sure every other State similarly 
would like to get that information.
    Finally, in your written testimony you discuss the issue of 
so-called ``megasites,'' and you state that ``the EPA will 
examine the role of the Superfund program in addressing very 
large megasites.'' Now, I don't know what that means. Does this 
mean that the EPA, on its own authority, is going to create a 
new program for megasites, and without any legislative 
authority apart from the Superfund program? Doesn't that send 
exactly the wrong message, contradicting your own statement 
about polluters pay, that somehow you are lifting out these 
megasites and saying they're so terrible that we can't hold 
anybody responsible for them?
    Ms. Horinko. Senator, not at all. We are not creating a new 
administrative program for megasites, nor are we asking that a 
new legislative program be created. We are simply teeing up for 
public dialogue through this NACEPT process the fact that these 
megasites present different challenges than some of the other 
more standard Superfund sites in terms of both their wide area, 
their relationship with other statutes that we administer, and 
also the complex nature of the pollution.
    Sediment sites are a terrific example. The Hudson is unique 
in that we have contamination that is pretty much attributable 
to one polluter, but at many other sediment sites that are on 
the NPL there is pollution from a number of different sources--
nonpoint source runoff, combined sewer overflows, pesticide 
runoff, industrial pollution. Certainly there are industrial 
polluters there that should be held accountable and pay, but 
there are also a number of other, more diverse sources of 
pollution, and it is complicated by the fact that often, 
because of title movements or stormwater runoff, there is 
recontamination, re-suspension. These sites cover entire 
watersheds, and cleaning them up is going to be a challenge, 
especially in the 8- to 10-year timeframe that we are used to 
judging Superfund sites by.
    So what we are asking the NACEPT to do is figure out what 
are appropriate milestones or environmental indicators to 
measure progress at these sites so that it simply doesn't look 
like we're not cleaning up sites. Even though we are spending 
tremendous money every year on progress at these sites, it will 
be decades before many are completely ecologically safe.
    Senator Clinton. Do I take from your answer there's no plan 
to characterize the Hudson River as a megasite?
    Ms. Horinko. The Hudson River is certainly characterized as 
a megasite in terms of the narrow definition--sites costing 
more than $50 million--but there is no plan to do anything 
different at the Hudson than we were doing yesterday or that 
the previous Administration was doing, which is to aggressively 
pursue cleanup.
    Senator Clinton. Thank you.
    Senator Boxer. Senator Corzine.
    Senator Corzine. Thank you, Madam Chairman.
    First of all I want to identify with the confusion that I 
find in looking at the data that was presented to us that 
Senator Clinton talked about, because I can't tell from that 
data with any certainty what's going to be cleaned up or isn't 
going to be cleaned up in New Jersey.
    As you well know, Madam Administrator, in the next panel 
Mr. Spiegel will be speaking about the Chemical Insecticide 
Corporation's Superfund site in Edison, NJ. This is a site 
where agent orange and other toxic chemicals were manufactured. 
It has been a serious problem to the local community. It is one 
that--as I mentioned in my opening statement, there's serious 
concern in the community, and I think rightfully so.
    There has been an enormous amount of planning. It is a 
project that is ready, willing, and able to go, I think by 
everyone's assessment, and whether appropriately or 
inappropriately, relative to the memo that Senator Boxer 
displayed, EPA pledged at a public meeting that the beginning 
of the cleanup would occur in November, and then, as we'll hear 
in Mr. Spiegel's testimony, it's not certain that that will go 
forward. As I said, as I look at the papers that were presented 
to us, we can't make hide nor hair of whether it is on the 
list.
    So my question is a simple one. Will EPA begin cleanup on 
this site this year, as was promised to the people in Edison?
    Ms. Horinko. Senator Corzine, I am loathe to answer 
questions about any 2002 funding because of the enforcement 
sensitivity I talked about. I don't know if there are PRPs at 
this site or not.
    Senator Corzine. In your earlier comments you said the 
enforcement policy was developed in the early stages of a plan. 
This has gone on for years in preparation--not in the early 
stages. The individual that was potentially responsible for 
this project is bankrupt. There are no identified PRPs. I don't 
understand where that leverage is responsible of responsive to 
the particular circumstances in this issue.
    Ms. Horinko. Well, Senator, it certainly is a site that the 
region has flagged of concern that they would like to start 
this year, but it is not clear whether they will have funding. 
We have two additional break points this fiscal year. We don't 
give all the money----
    Senator Corzine. By the way, that gets at one of the 
fundamental reasons we're having this hearing. There isn't the 
funding available, and therefore a real reason to be for 
reinstitution of this polluter pay tax.
    Ms. Horinko. Senator, the next two break points for making 
additional funding decisions this year are in May and then 
August. Actually, congressionally mandated, we have $100 
million that Congress has asked us to hold back until September 
1 and make final funding decisions for the fiscal year, so all 
the votes aren't in is the short answer to your question, and 
we'll certainly take your concerns----
    Senator Corzine. Who are the voters? I mean----
    Ms. Horinko. You're talking to one of them, and so you're 
talking to the right person, Senator, and I'm certainly noting 
your concerns here now today and will take them back with me as 
I and my team of folks in the Office of Emergency and Remedial 
Response make these very difficult decisions.
    Senator Corzine. You can imagine, when you raise 
expectations by verbal statements that it is going to be 
cleaned up, and then there becomes uncertainty, and then the 
confusion again, it undermines the credibility of both the 
program, the Administration, and government, in general.
    Let me move to another question. I think this is actually--
you know, generalities always cover up details that are really 
important. Your testimony indicates that you secure cleanup 
funding from responsible parties. I think the number was 70 
percent. As I analyze best I can--I'm not too good at math--and 
to the extent that I can, the data show that only 19 of the 69 
public New Jersey sites are being paid for by PRPs in the 
listing--again, there's some confusion in that--and only 
another 30 percent are fund-lead sites. That's about 55 
percent.
    I'm concerned, again, because it gets at is it fair for the 
general taxpayers to be cleaning up all these fund sites? You 
know, to put it into stark terms, since--and I will be very 
direct about this--now that we are using Social Security and 
Medicare trust funds, is it fair to have payroll taxes that are 
designed to support Social Security and Medicare used to clean 
up privately-created messes that our public is exposed to? I 
think it is absolutely essential that we get into a mode of 
understanding or accepting that there is a responsibility for 
the actions taken, and private sector has been a place where 
this has come from. Why are we not aggressively not supporting 
this polluter pay tax?
    Ms. Horinko. Senator, I could not agree with you more that 
polluters should step up to the plate and they should pay. In 
fact, you will see our actions and our commitments 
demonstrated, not just the words, as they have been in the last 
year, that polluters will pay. At specific sites where we can 
hunt them down, we will hold them accountable.
    In terms of the tax issue, as I indicated to Senator 
Chafee, in the current fiscal year, because there was still 
adequate money in the trust fund, there was----
    Senator Corzine. The $28 million----
    Ms. Horinko. No. That's actually at the end of 2003 there 
will be $28 million, not at the end of 2002. So going into 2003 
the President's budget looked at what was in the trust fund and 
felt there was enough to----
    Senator Corzine. What do we think will be in it at the end 
of 2002?
    Ms. Horinko. I can tell you in one second, Senator--$427 
million.
    Senator Corzine. We're spending roughly?
    Ms. Horinko. It's $1.3 billion.
    Senator Corzine. Is it $1.3 billion? I don't know that that 
sounds like that finishes up the kind of sourcing for funding 
that is responsible, and I again think if the American public 
knew we were using payroll taxes to clean up pollution sites 
that are really an issue of private companies having not 
attended to proper care for the environment, we would have a 
different result in the discussion of this issue. It's hard to 
say that that's a commitment to cleanup and polluter pays.
    One other question. Last fall I introduced a bill to 
improve security and reduce hazards at chemical security 
plants. I noticed you mentioned you're working with industry 
and other folks with regard to this. Senator Boxer is a 
cosponsor. I think Senator Clinton is, as well.
    We held a hearing on this last November which EPA chose not 
to participate in, and I wonder whether you have reviewed the 
bill. We don't have to go through that today, but I'd like to 
have a serious dialogue about moving forward some of the 
elements that I think are very important for our homeland 
security and whether it is on technical basis or whether 
they're strategic issues so that we can get to a response to a 
very vulnerable part, certainly of New Jersey, but I think 
across the country about the safety and soundness of homeland 
security issues. Chemical plant siting is certainly one of 
those and I've been somewhat disappointed in our dialogue as it 
relates to this issue. It's one that we hope to move to markup, 
I hope, this spring, and if we do that it would be better that 
we worked in a bipartisan, cooperative fashion to try to get to 
a solution that worked for all.
    I'm going to submit, Madam Chairman, a series of questions 
about New Jersey sites so that I can have a clear view not only 
about the Edison site but a whole series of others and their 
prioritizations.
    Thank you.
    Again, I want to emphasize one of the things that the 
chairwoman said. This is not about personalities. This is about 
the seriousness with which I think the American public takes 
the cleanup of these sites and its impact on the health, safety 
of the communities where these sites are. We need, in my view, 
a more serious prioritization of this process as we go forward.
    Senator Boxer. Thank you, Senator. Let me say I have one 
more round of questions here for you. Again, I have trouble 
with your rhetoric and the facts. Again you said, ``We're 
committed to the principle of polluter pays,'' Ms. Horinko, but 
if you look at the facts they tell the story. We're moving from 
an 82 percent polluter pay to a 46. We're moving from an 18 
percent taxpayer pay to a 54 percent taxpayer pay. But you're 
committed to polluter pay doesn't add up.
    So I just hope the American people will look at the 
rhetoric and the facts and, I mean, I'm going to remind them of 
this, because we know. We have your own facts and figures.
    Now, I want to get back to this tendency to gag people in 
your agency when it comes to revealing what is on the list and 
what is not on the list. You said that your agency doesn't 
reveal what sites will get fund money because that information 
could affect enforcement cases. Senator Corzine just proved the 
point. In his particular case in New Jersey, the Chemical 
Insecticide site, which is filled with agent orange, as I 
understand it, there isn't any enforcement. There are many 
sites where there isn't any enforcement, where you can't find 
the parties, so that your answer simply doesn't make sense.
    Then I would challenge you this--obviously, you believe it. 
You said it from the heart. But why did you say it in your e-
mail then? Could we put the e-mail back up there? You told your 
people not to talk about the sites. You didn't say because it 
could, in fact, harm our ability to enforce. So I question that 
response. It's a neat and pat answer, but, A, it doesn't hold 
for the sites where there are no responsible parties; B, you 
had a chance to send an e-mail out and you never said the 
reason they shouldn't talk to people is because it would hurt 
the enforcement.
    So I am extremely troubled by this, so I want to ask you: 
did you bring with you today, since we heard about a couple of 
lists that are confusing, did you bring with you a list of the 
cleanup sites for 2002?
    Ms. Horinko. I have--you mean the sites that potentially 
may not----
    Senator Boxer. That will be taken off the list, sites that 
will be taken off the list, sites that will be added onto the 
list for 2002.
    Ms. Horinko. First of all, we don't have a list of sites, 
you know, that we take them on or off. Generally, all of our 
sites are potential candidates for funding and then we make 
decisions as we go.
    Senator Boxer. Doesn't somebody compile what sites will be 
cleaned up and which will not?
    Ms. Horinko. Certainly, the regional offices do, and I----
    Senator Boxer. Good. Very good. So you could just simply 
call the regional offices and get us what the sites--do you 
have that information with you today?
    Ms. Horinko. I do actually--based upon the compilation that 
we did for you all and sent up--I have a list of sites that are 
proposed new starts that are candidates for funding, and I 
would be pleased to share that with you all with the proviso 
that you please keep it confidential until the end of this 
fiscal year because PRPs, in fact, do pop up during the course 
of our fund-lead cleanups.
    Senator Boxer. Wait a minute. These are sites that are 
going to be cleaned up, begun in 2002----
    Ms. Horinko. That's right.
    Senator Boxer [continuing]. Is what we're talking about. 
How many months are left in the fiscal year of 2002?
    Ms. Horinko. Four or five months, Senator.
    Senator Boxer. OK. You're telling me that I can't share 
with people decisions that affect their lives in decisions that 
are going to have to be made shortly? I don't understand this--
--
    Ms. Horinko. Certainly----
    Senator Boxer [continuing]. Compulsion for the secrecy 
here.
    Ms. Horinko. Certainly, Senator, you are welcome to share 
that with them. I would simply request that you not, only 
because sites do, in fact, start out as fund-lead sites, and 
then we become aware of PRPs and they cross over to become PRP-
lead sites. This is actually fairly common. So there's no 
incentive for PRPs to get involved if they know that we may not 
fund the site. So----
    Senator Boxer. But I don't understand how an agency can run 
a shop in a--for cleaning up--a list that has to come forward 
from the regional agencies in this fiscal year and you still 
don't want us to talk about what's going to be started in this 
fiscal year?
    Ms. Horinko. Well, one reason is we don't yet know, 
Senator. We actually make a decision--there's a 
congressionally-mandated holdback. Under the law, we are 
required to save $100 million of our cleanup budget until 
September 1 so that we don't actually make our final funding 
decisions until August, so----
    Senator Boxer. Is there a congressional mandate not to tell 
people what's----
    Ms. Horinko. No, there is not a congressional mandate.
    Senator Boxer. Thank you.
    Ms. Horinko. That is simply----
    Senator Boxer. Well, that's because we believe people ought 
to know, and unless--I will tell you right here and now, as one 
Senator, that I'm happy you have the list today and I want to 
see it.
    Ms. Horinko. We'll be pleased to share it.
    Senator Boxer. Unless I see that there's a possibility of 
enforcement problems or whatever, I'm not going to keep it a 
secret. I don't work in a secret government. I don't work for 
the CIA. I'm going to let people know in their communities if 
their site--suppose a site is just taken off the list and it's 
not there. In New Jersey they don't even know whether their 
site is on or off. Guess what? Your agency told them they were 
off the list. Then you sent out an e-mail and they called back 
and said, ``Well, sorry, we shouldn't have said anything.'' 
People don't know. It's a matter of their quality of life.
    So I would just say that it is, just in summing up how I 
feel about this, which is probably pretty obvious to you, I'm 
worried about this hiding of information--that's what I would 
call it--for an excuse that doesn't exist, because in many 
cases there are no--there's no litigation, there's no 
enforcement. I'm worried about, you know, an e-mail that goes 
out that doesn't even say the reason you want people not to 
talk is because of enforcement. It sounds to me like there was 
a bad story in the ``New York Times'' and this Administration 
doesn't want people to know--if you could put up that other 
list again of the number of cleanups--that, in fact, there's 
going to be this tremendous decline, and they may be affected, 
and that there's not going to be any tax, and that the 
taxpayers are going to have to pick up--let's put up that one 
again--more and more of the funding. That's what it sounds like 
to me.
    Now, I wasn't born yesterday. It's obvious. I have been 
around here a long time and e-mails reveal a lot and they 
contradict what you said here. Now, maybe you just forgot to 
tell them that, of course, the reason you sent this out is 
you're very concerned about enforcement. That doesn't sound 
right to me. It doesn't feel good to me.
    You know, we can have a disagreement on the priority of 
Superfund. I may find it to be much more important than perhaps 
this Administration does. That's a fair fight. I will debate 
that. What I don't feel is fair fight is when there are 
documents that aren't turned over to this committee, when 
there's confusion, when Senators are saying they're spending 
their time and their staff looking at lists that don't match 
up, that don't make sense, when I can't tell people in my 
community whether they are going to be cleaned up, they're not 
going to be cleaned up. So the message I want to give you and 
which I hope you will give Administrator Whitman, which I'm 
sure you will, is that I speak on behalf of a number of my 
colleagues when I say to you that we are strong supporters of 
this program, that we want to see this Administration have 
their actions match their rhetoric, that we are strong 
supporters of open government, that I don't expect, when my 
people call the region to get information, that there's a gag 
order and they have to call the communications person.
    While I'm at it, I don't appreciate your suggesting that my 
staff can't talk to people in your shop, that they have to go 
through congressional liaison. We ought to be able to talk to 
whomever we want. How can I represent the people that elected 
me?
    So I hope you'll reconsider that when you said, ``Well, no 
one should have been talking to you but the congressional 
liaison,'' because if that happens we'll have another hearing 
about that, because that is not appropriate.
    I hope that people within your agency who have been 
cooperating with us continue to do it, continue to send us 
these internal memos. We asked for them. I didn't go on a witch 
hunt. We asked for them. We'd heard about it. We were told no 
such e-mail existed.
    So I am, you know, very troubled by the status of this 
program, and I am just completely mystified of how an agency 
can come up here when there's 5 months left in the fiscal year 
and say, ``Well, we haven't made our decisions yet and, you 
know, we really--it's Congress' fault.'' I just don't buy it 
and I'm troubled by it. So this is just the first hearing.
    I'll turn it over to Senator Chafee.
    Senator Chafee. Thank you very much.
    I want to get back to your statement that 70 percent of the 
cleanups are being done by the responsible parties, and so that 
leaves 30 percent that are being done by some other kind of 
funding, and that leads to the wisdom of not having this 
Superfund tax again available.
    What is the percentage of the congressional funding, the 
annual appropriation that is spent on those 30 percent sites 
that aren't being paid for by the responsible party?
    Ms. Horinko. What is the percentage, Senator? I'm sorry? 
Could you ask me that question again?
    Senator Chafee. Yes. Let's assume that 30 percent of the 
sites are not being funded by the polluter. Who is paying for 
the cleanup then? Is it the annual appropriation from Congress?
    Ms. Horinko. Yes. The annual appropriation from Congress, 
Senator, includes both some moneys drawn from general revenues 
and some money that is drawn out of the trust fund, and 
historically that has fluctuated over the years. Some years the 
majority of the annual appropriation comes out of the trust 
fund, some years the majority comes out of general revenues, 
and that has historically been the case over the life of the 
program.
    Senator Chafee. Isn't that going to be harder to defend as 
we go forward, the wisdom of using dwindling resources? As you 
look forward, doesn't that cause you to say, ``We are going to 
need this Superfund tax''?
    Ms. Horinko. It certainly causes us to revisit the issue, 
and we will look at it very carefully as part of the 2004 
planning process, which is just beginning right now.
    Senator Chafee. I don't know if you have the information, 
but, out of the, I guess, breaking down these percentages--this 
is similar to Senator Corzine's question--we have 30 percent 
that aren't funded by the responsible parties. How much of 
those 30 percent--I don't know if you have this information--is 
from the annual congressional appropriation which, if you want 
to take Senator Corzine's logic, is coming from the Medicare or 
from Social Security?
    Ms. Horinko. We can track that down for you.
    Senator Chafee. What would you guess? Is it 50 percent, 80 
percent, 90 percent?
    Ms. Horinko. I hesitate to hazard a guess, as that also has 
fluctuated over time.
    Senator Chafee. Fair enough. Thank you.
    Senator Boxer. Just following up on the tax question, 
because Senator Chafee and I are going to work together on this 
polluter pays--I'm looking forward to that--you said you're 
revisiting the tax? Because President Bush came out against the 
tax in 2003. Has he agreed to visit it for 2004?
    Ms. Horinko. The Administration will look very carefully at 
this issue for 2004.
    Senator Boxer. So that, even though he did away with the 
tax in 2003, he doesn't support it in 2003, he's going to look 
at the polluter pays tax in 2004?
    Ms. Horinko. Yes, Madam Chair. Actually, the tax expired in 
1995.
    Senator Boxer. Right. But he didn't put it in 2003, and he 
said he didn't support it; is that correct?
    Ms. Horinko. Yes, for 2003 that's absolutely right, Madam 
Chair.
    Senator Boxer. But he might change his mind in 2004?
    Ms. Horinko. We'll look ahead and see what the future holds 
for us.
    Senator Boxer. We'll look ahead and see what the future 
holds? Well, I think the future holds that there's not going to 
be a Superfund at all then. The future holds deficits. The 
future holds taxpayers paying, picking up the tab. Senator 
Chafee and I will talk to you about this and maybe you can come 
on board and help us get a fund paid for by polluters to help 
us do what needs to be done.
    Thank you very much.
    Ms. Horinko. You're most welcome. Thank you, Madam Chair.
    Senator Boxer. Regards to Senator Whitman--Senator Whitman. 
I made her a Senator.
    [Laughter.]
    Senator Boxer. Administrator Whitman.
    Ms. Horinko. I will pass the administrator along your 
regards.
    Senator Boxer. Thank you very much.
    Ms. Horinko. Thank you.
    Senator Boxer. We'll call our second panel: Ms. Norma 
Lopez-Reid, Mr. Robert Spiegel. I'm going to swear them in, as 
well, unless they have a problem with that.
    Would you be willing to be sworn in, Mr. Spiegel?
    Mr. Spiegel. Yes, I would.
    Senator Boxer. And you, as well?
    Ms. Lopez-Reid. Yes.
    Senator Boxer. OK. Will you raise your right hand? Do you 
swear to tell the truth, the whole truth, and nothing but the 
truth?
    Ms. Lopez-Reid. I do.
    Mr. Spiegel. I do.
    Senator Boxer. Thank you very much.
    Our second witness is Ms. Norma Lopez-Reid. Ms. Reid is a 
council member for the city of Montebello, CA, lives next door 
to a major Superfund site in my State.
    I would like to welcome you to Washington, DC, Ms. Lopez-
Reid. I want to thank you for coming such a long way to tell 
your story.

STATEMENT OF NORMA LOPEZ-REID, CITY COUNCIL MEMBER, MONTEBELLO, 
                               CA

    Ms. Lopez-Reid. Thank you very much for allowing me to come 
to testify at this hearing today, and good morning, everyone. 
My name is Norma Lopez-Reid. I reside in, and am a councilwoman 
for, the city of Montebello, CA. Today I am here to speak to 
you both as a resident who lives one house away from the 
landfill I will describe and in my official capacity with the 
city.
    I would like to talk about the positive experience that my 
community has had with EPA and what they have done at one of 
the largest Superfund sites to assist us with our problem. When 
my neighbors and I moved into this development of new homes, we 
had no idea that the area was infested with toxic hazardous 
waste which included vinyl chloride, a known carcinogen. Had it 
not been for the remarkable cleanup efforts of EPA, with their 
program, the authority to make responsible parties accountable, 
and the funds to begin the project, our health and the well-
being of our community would still be at stake.
    The Operating Industry's landfill site is a 190-acre parcel 
located 10 miles east of Los Angeles, downtown Los Angeles. The 
landfill began operation around 1950 and continued until 1984. 
Originally, this was supposed to be a trash landfill where no 
liquids were to be deposited. The list of toxic and hazardous 
chemicals, including liquids, was exhaustive.
    When EPA took over in 1986, they took significant steps to 
reduce health risks to nearby residents by addressing impacted 
residences adjacent to the site. These efforts included 
collecting the migrating gases in the homes, such as methane 
and vinyl chloride, treating the migration of liquid leachate 
into the yards, and fencing off the park areas where many of 
our children played, and dealing with the threats of slides 
from unstable slopes onto the homes.
    In addition to these emergency response actions, EPA was 
able to take steps to have the responsible companies pay for 
their part of the cost in the cleanup. EPA invested several 
million dollars to begin the investigation and emergency 
response. That money came from Superfund.
    EPA leveraged the Federal dollars by obtaining agreements 
for the polluters to pay for this multi-hundred-million-dollar 
effort at this site. If the Federal Government had not stepped 
in with dollars toward this project, our community would still 
be suffering from this horrible threat. Making this a priority 
has made a tremendous difference in our lives.
    It is important to note that soon after the landfill was 
closed the owner quickly declared bankruptcy and walked away 
from the situation. I can assure you that many of the thousands 
of culprits involved would have done the same had it not been 
for EPA making them accountable for their actions.
    It is also important for me to mention that one of the most 
notable efforts from EPA has been the unique level of community 
involvement that they have always sought. They not only kept us 
informed of their discoveries, their plans, and processes, but 
gave us the opportunity to give feedback and to become actively 
involved in the decision-making efforts. This, in itself, made 
a tremendous difference for our neighbors and their peace of 
mind.
    In the meantime, there's still a tremendous concern about 
our health. There is one specific cul de sac that backs up into 
the landfill area in which three families have had confirmed 
cancer diagnoses. The worst fears have come true for some of 
our neighboring families. Several of our neighbors have already 
died of cancer.
    While EPA has prevented further exposure to contaminants, 
the fear of more health problems continues to permeate 
throughout our neighborhood, and we hope that the Public Health 
Department would monitor the long-term effects of the original 
contamination.
    In conclusion, the EPA's involvement and incredible heroic 
efforts at the Operating Industry's landfill have been 
enormously successful. It is critical that these efforts be 
continued in other areas where these monstrous problems have 
taken place. This example should serve as a powerful reminder 
that no population should be forced to shoulder and live in 
such burdensome environments. This is the reason it is 
important that a strong Superfund program be available to 
assist others in this type of situation.
    Senator Boxer. Thank you so very much.
    It's a good story, but it is still so worrisome because of 
all those years of exposure.
    Mr. Spiegel, welcome.

    STATEMENT OF ROBERT SPIEGEL, EXECUTIVE DIRECTOR, EDISON 
             WETLANDS ASSOCIATION, INC., EDISON, NJ

    Mr. Spiegel. Thank you.
    Superfund is not merely about numbers and budgets, 
Superfund is about people living in poisoned communities, it's 
about promises made to the American people by our Federal 
Government that are about to be broken.
    My name is Robert Spiegel, and I am the executive director 
of the Edison Wetlands Association. We are a nonprofit 
environmental organization in central New Jersey that has been 
working for over a decade to clean up the Chemical Insecticide 
Superfund site. We are also working actively on 7 Superfund 
sites and 15 State-lead sites.
    I'm here today to tell you about a story about one 
Superfund site, the impact that it has had on the surrounding 
community, and the consequences that the lack of funding will 
result in the cleanup. I'm also here to ask that the funding 
for the remediation of these sites be continued. It is 
imperative that we deal with these sites swiftly and 
conscientiously, or we'll continue to endanger the lives of our 
citizens and our future generations.
    I have been closely involved with the Superfund process 
since 1991. For 11 years, I have worked on the CSC site in 
Edison. From 1954 to 1972 the CIC site manufactured pesticides, 
herbicides, fungicides, including agent orange and other 
experimental defoliants that were used during the war in 
Vietnam. After owner Arnold Livingston declared bankruptcy and 
moved along to his next site, the buildings were razed, leaving 
a vacant lot where the soil and groundwater are highly 
contaminated with arsenic, heavy metals, pesticides, and 
dioxin.
    In spring of 1991, a friend asked if I wanted to see green 
rabbits. Armed with a video camera, we took a short ride to the 
Chemical Insecticide site, and the first thing that struck me 
was the smell. It was the smell of death and decay. Nothing 
grew on the property except a strange fluorescent green moss. 
Small animal carcasses littered the area, and there were, 
indeed, green rabbits living on the site. The rabbits had 
developed an abnormal greenish-yellow undercoat that I would 
later discover was the result of Dinoseb, a pesticide disposed 
of in large quantities throughout the site.
    We followed the trail of yellow liquid draining from the 
back of the site downstream past a neighboring industrial 
bakery and into the Edison Glen and Edison Woods developments. 
There we videotaped a child playing in a poison stream who told 
us it was a good place to hang out to look for frogs and 
turtles. I subsequently found out that the vacant CIC site was 
also a playground for local children, the chemical lagoons were 
their wading pools, and adults routinely scavenged material 
from the site.
    I contacted the EPA and I spoke with the project manager 
and sent him a copy of the videotape, and about 2 weeks later 
the EPA posted that warning sign along the brooks and the 
creeks. You can imagine the panic that erupted as residents 
assumed the worst--that they were at risk from exposure to a 
witches' brew of chemicals and the value of their homes had 
plummeted overnight. The EPA, however, refused to conduct 
additional testing. It seemed that, having posted the signs, 
they felt that the problem had been solved.
    Well, I started a small citizens group to work on gathering 
and disseminating reliable information. We held a series of 
public meetings to inform the local residents and public 
officials about the contamination and to discuss what could be 
done.
    From 1991 to 1993, the newly-formed Edison Wetlands pursued 
a vigorous and continuous interaction with the EPA, the State, 
and local health officials. Public meetings were held and the 
issue was widely publicized in both television and in print. I 
also assisted in the relocation of several families who were 
plagued by illness--illness widely believed to be the result of 
living downstream from what the Agency for Toxic Substances and 
Disease Registry labeled a ``public health hazard.''
    A local police officer had a rare form of rare blood 
disease, his wife had reproductive problems, and their two 
children were showing signs of arsenic exposure. I worked with 
the family and their attorney to relocate them to a safer home 
in East Brunswick, NJ.
    Several employees of a bakery adjoining the property died 
as a result of cancer believed to be caused from toxic runoff 
from the CIC site. The attorney for several of their widows 
called me to testify, and since I had witnessed and videotaped 
the yellow ooze draining from the site onto the bakery 
property, I was naturally the one that they brought up to 
testify.
    No one should have to die because they work near a 
Superfund site.
    By spring of 1993, the Edison Wetlands Association's 
relationship with the EPA began to develop into a more 
productive one. At the suggestion of the EPA, we applied for 
and were awarded an EPA technical assistance grant. The grant 
allowed us to hire technical experts to help us to understand 
the scientific and technical issues, as well as the limitations 
of the Superfund program, and we were able to secure 
comprehensive cleanup and restoration of the Edison Glen and 
Edison Woods, as well as the Mill Brook. The EPA also installed 
a temporary liner at the site to prevent direct contact with 
the most contaminated soil.
    Since 1993, we have worked closely with the EPA at the CIC 
site, as well as other Superfund sites in central New Jersey. 
While we have had vocal and sometimes heated disagreements with 
them, we've also seen tangible results. By 2001, the CIC site 
was considered to be a national model for the Superfund 
program, demonstrating effective public participation resulting 
in the full--well, actually, it was a plan for the full and 
permanent cleanup of the site. Three Presidents, three 
governors, and three remedial project managers later, all 
interested parties decided that the best course of action was 
to remove the contaminated soil from the CIC site, the 
adjoining bakery, and several other neighboring industrial 
properties. The estimated cost of the cleanup for the CIC site 
was $40 million, and the CIC was on the Superfund 
appropriations list.
    At our last joint public meeting in January, the EPA 
announced to the community that this work was to begin in 
November 2002. Several weeks ago I received a call from the EPA 
informing me that there was no money to begin this or any new 
cleanups in the region, and that there probably would not be 
funding for several years. Meanwhile, the temporary cap at the 
CIC site is breaking down and now has holes in it. When it 
fails, the brook and the nearby residential developments will 
once again be exposed to contamination. It's obvious that we 
need a permanent solution now, not some time in the distant 
future.
    Today I've talked about just one Superfund site and its 
impacts on just one community. There are 1,235 Superfund sites 
impacting tens of thousands of communities across the country. 
Chemical pollution has severely impacted our water, our air, 
and our soil. Manufacturers, residents, and governments, as 
stewards of these resources, must protect them and work towards 
their restoration.
    The Superfund program was begun not only to protect human 
life but also to clean up and restore our natural resources, 
and we need the funds generated by this tax, and only with your 
help can we get Superfund back on track. I ask you to assist us 
in making our communities whole again.
    Thank you for the opportunity to testify.
    Senator Boxer. Thank you so very much, both of you. So we 
have the story of a site cleaned, a community relieved, and a 
story of a site in limbo.
    Mr. Spiegel. Yes.
    Senator Boxer. Mr. Spiegel, when the EPA staff told you 
that your site would not get funding for a year or more, and 
then they--did they tell you later that you couldn't talk about 
the future of the site, that they could not talk to you about 
the future of the site? Did they say why they couldn't tell you 
more?
    Mr. Spiegel. Well, they said that they didn't know, that 
there was actually no money for any new startups in Region Two, 
so that mine wasn't the only site. I mean, the whole region--
New York and New Jersey and Puerto Rico--had no new startup 
money at all for any cleanups, just emergency removal and 
existing, ongoing cleanup efforts.
    Senator Boxer. But now it's interesting because the EPA 
administrator here today told us that there really was no 
decision made. How did you feel when you heard that? In other 
words, first they tell you no hope, now--I mean, it just 
doesn't square. This is what is troubling me. If they told you 
don't count on it, it wasn't going to happen, then they tell us 
no decision is made, how does that make you feel? I mean, I 
know how it makes me feel, but you----
    Mr. Spiegel. In New Jersey, alone, I know that there's 
about 13 sites that were ready to begin construction that are 
now in limbo. What do we tell the residents? I mean, what do we 
tell the residents? These people now are told that the cleanups 
are going to begin. They're promised that these poisonous sites 
are going to be cleaned up. I personally have not talked to all 
the residents because I don't know what to tell them. You know, 
they had a lot of hope that these sites were going to be 
cleaned up, and now, you know, they feel the rug has been 
pulled out from underneath of them. As one of the residents 
said, they felt that there was a light at the end of the 
tunnel, and the light had been shut off.
    Senator Boxer. Right. Well, Mr. Spiegel, I just think--I 
just want to say how terrific I think you are to have formed 
this organization and be involved in it, and you should just 
keep pushing and don't take no for an answer, because I think 
we can just put some pressure on together and see where we go 
from here.
    Mr. Spiegel. Absolutely.
    Senator Boxer. Because clearly they're not willing to say 
today what is on or what is off.
    Mr. Spiegel. Well, I have been working on this site for 
over a quarter of my life, for almost 12 years, so I'm 
certainly not going anywhere, and I've made a personal 
commitment that I'm going to get this site cleaned up.
    Senator Boxer. Well, then you're going to make a 
difference, I know.
    Ms. Lopez-Reid, if you were in the shoes of many 
communities around the country such as the one Mr. Spiegel 
comes from, and you were being told by the EPA there was no 
picture of whether your site would get cleaned up this year, 
maybe next year, what would the community's reaction have been?
    Ms. Lopez-Reid. Well, obviously we would have been 
extremely frustrated. We would have been terribly confused. We 
would have really felt that there wasn't much hope.
    Senator Boxer. Your experience was very different, was it 
not? It seemed to me, from what you've said, that you've said 
nothing but glowing things about the EPA, and I'm assuming that 
they had a very open process, that the community was involved 
every step of the way. Is that true?
    Ms. Lopez-Reid. Exactly. The community was involved every 
step of the way, and, as I mentioned, that really made a 
difference for us, because knowing what was going to happen, 
what had been discovered, how we might be able to see some 
progress in having this dealt with just, in itself, made a 
tremendous difference. But actually seeing the cleanup taking 
place on a consistent basis, watching the trucks, even though 
obviously we had to contend with a great deal in terms of dust 
and noise and just incredible efforts on our parts to hang in 
there, it made a tremendous difference because we knew that 
something was being done.
    Senator Boxer. Well, I want to thank both of you so very 
much because we talk about a lot of--you know, we show charts 
and we show the number of sites that are not going to be 
cleaned, and it is real. It is not just a number on a chart. 
It's Mr. Spiegel's life-long commitment here that's being toyed 
with. It just seems like there has been a tremendous shift from 
an EPA that was excited about its mission, that was ready to 
roll, that was open with the community to suddenly a pulling 
back and obvious effort not to talk that much.
    Now, I want to say the people in EPA are wonderful people.
    Mr. Spiegel. I know quite a few of them myself.
    Senator Boxer. This isn't something that they've changed 
about. It's instructions they have been given with an e-mail. 
It is instructions they have been given from the top. So the 
shift isn't among the rank and file. I want to make sure of the 
EPA. Those people are frustrated, as well, and upset, and 
obviously believe in what they are doing. I just wanted to make 
sure that I know that you both agree with me on that point.
    Ms. Lopez-Reid. Absolutely.
    Senator Boxer. Well, I again want to thank both of you very 
much.
    Mr. Spiegel. Yes, Senator. I want to thank you, too.
    Ms. Lopez-Reid. Thank you very much.
    Senator Boxer. Thank you so much. We'll keep talking about 
these two side-by-side experiences, because it shows that--Ms. 
Lopez-Reid shows us what can be done, what should be done, and 
what was done, and Mr. Spiegel shows us the face of fear in a 
community when they're not given answers, there's no definitive 
plan out there that's going to really be undertaken.
    Mr. Spiegel. I thank you for your support because it means 
a lot to us. It's easy to remember--it's easy to just talk 
about it in merely numbers.
    Senator Boxer. Right.
    Mr. Spiegel. But when you put a face on it, when you talk 
to a child that lives near the site, it really changes the 
dynamic of the discussion.
    Senator Boxer. No question. Thank you both.
    Mr. Spiegel. Thank you.
    Ms. Lopez-Reid. Thank you. I just wanted to add that I 
brought some pictures. I don't know if you'd like to enter 
them.
    Senator Boxer. Yes, I would like that.
    Ms. Lopez-Reid. They are of before and during the EPA 
involvement. I would like to be able to submit those.
    Senator Boxer. Would you give--our staff will take that and 
we will put those in the record and I thank you both very, very 
much.
    Mr. Spiegel. Thank you, Senator.
    Ms. Lopez-Reid. Thank you very much.
    Senator Boxer. Our third panel: Mr. Grant Cope, who is an 
attorney with the U.S. Public Interest Research Group in 
Washington; Mr. Michael Steinberg, an attorney with the law 
firm of Morgan, Lewis & Bockius--I hope I said that right--in 
Washington. Mr. Steinberg is representing the Superfund 
Settlements project. Our final witness is Mr. Kenneth Cornell, 
an executive vice president and chief underwriting officer at 
AIG environmental. I want to welcome all of you.
    Would you mind taking the oath? If you could just stand? If 
any of you don't want to do it, it's all right.
    Do you swear to tell the truth, the whole truth, and 
nothing but the truth?
    [All witnesses respond to the oath in the affirmative.]
    Senator Boxer. Thank you so very much.
    Mr. Cope, we'll start with you.

 STATEMENT OF GRANT COPE, STAFF ATTORNEY, U.S. PUBLIC INTEREST 
                 RESEARCH GROUP, WASHINGTON, DC

    Mr. Cope. Thank you, Senator Boxer. Thank you very much for 
the opportunity to testify on the Bush administration's 
management of the Superfund program.
    My testimony will address three issues. First, I will 
discuss the potential causes of the Bush administration 
slowdown of cleanups. Second, I will discuss the impacts on 
other cleanup programs that flow from the Bush administration's 
policies. Third, I will outline concrete steps that the 
Administration should take to remedy the potentially 
devastating impacts of its continued mismanagement of the 
Superfund program.
    Now, the Bush administration has given essentially three 
answers to the question, ``Why has the pace of cleanup 
precipitously declined in less than 2 years?'' Their answer 
mirrors the classic bunker mentality response to an impending 
crisis. First of all, deny it, then blame something else, and 
finally pursue a course of action that tries to advance your 
claims but will ultimately hurt what really matters, the 
Superfund program.
    The Administration refuses to admit that there is any 
slowdown, despite level funding that occurs at the same time 
cleanups have declined by over 50 percent. They blame 
unexpectedly complex sites, despite having studied and worked 
on these sites for, in some cases, more than 10 years. This is 
tantamount to telling your boss that you didn't get the project 
done because somehow you got lost on your way to the desk. It 
just doesn't add up.
    Finally, the Administration says they will undertake a 
thorough review of the program and try to develop ways to deal 
with these complex sites. I would suggest that there are two 
other potentially inter-connected answers to the above 
question. First, the Administration has under-funded the 
program by about $1 to $1.4 billion from 2001 to 2003. This 
would have an impact on any program. Second, it is possible 
that cleanups have slowed down while the Administration 
considers what reforms it may want to implement.
    What potential reforms might the Administration be 
considering? First, there have been reports about an 
administrative program that would take over mining and 
contaminated sediment sites; however, no other program 
possesses Superfund's powerful liability system and cleanup 
standards. If it could, administrative efficiency would just 
dictate that EPA use Superfund.
    By contrast, polluters can make good use of such an 
administrative program. With voluntary cleanup agreements, 
cooperative partnerships, waivers of liability, and little or 
no EPA oversight, polluters of the Nation's largest and most-
contaminated toxic waste sites would benefit at the expense of 
protections for public health.
    Second, behind a veil of enforcement confidentiality, the 
Administration could negotiate sweetheart deals with big 
polluters that designate contaminated areas as NPL caliber 
sites. Polluters would voluntarily agree to clean up these 
sites with minimal EPA oversight. EPA negotiations would cut 
the public out of the process, other than a perfunctory 30-day 
comment period. EPA would also funnel trust fund money to these 
sites, rather than spending it on Superfund sites.
    A third potential reform is the use of investment funds in 
conjunction with insurance policies and waivers of liability. 
This combination allows polluters to pay pennies on the cleanup 
dollar, while leaving taxpayers holding the bag. Now, there's 
nothing obviously inappropriate about allowing a PRP to give 
money to an insurance company to invest as a way of paying for 
long-term cleanup costs. However, a serious problem arises when 
taxpayers are left to hold the liability if cleanup costs 
exceed expectations. This is particularly true at mining sites, 
where acid mine drainage can last forever and become worse over 
time.
    These potential reforms all have one thing in common--they 
all weaken Superfund as it applies to some of the Nation's most 
contaminated toxic waste sites.
    Now, for my second point. Superfund is the keystone cleanup 
program that makes all other Federal and State cleanup programs 
effective. Superfund is a largely unseen yet ever-present 
gorilla in the closet that Federal and State cleanup officials 
use to make intransigent polluters clean up their sites. 
Superfund provides vital funding, technical assistance, and 
policy guidance to other programs that helps them clean up 
their sites. When other programs do not have the administrative 
capabilities or political will to clean up a site, they call in 
Superfund.
    By undercutting the ability of Superfund to protect public 
health, this Administration is also undercutting every other 
cleanup program in the country. This is great for polluters but 
devastating for public health.
    Third, and finally, the Administration should take three 
simple steps to remedy these problems. First, respect the 
public's right to know by telling the public which sites are 
going to be affected by the policies. Second, support 
reauthorization of Superfund's polluter pays taxes. Third, just 
let the program do what it does best and clean up sites.
    Thank you.
    Senator Boxer. Thank you.
    That sort of put it straight ahead.
    Mr. Steinberg, we welcome you. Again, you are an attorney 
with the firm of Morgan, Lewis & Bockius. Did I say that right?
    Mr. Steinberg. Yes. That's correct.
    Senator Boxer. And you're representing the Superfund 
Settlements Project. We welcome you.

  STATEMENT OF MICHAEL W. STEINBERG, MORGAN, LEWIS & BOCKIUS, 
  WASHINGTON, DC, REPRESENTING THE AMERICAN CHEMISTRY COUNCIL

    Mr. Steinberg. Thank you, and good morning. I appreciate 
this opportunity to share some industry perspectives on the 
Superfund program and on its future.
    Superfund today is a mature program that has largely 
accomplished its original goals. The gaps in our environmental 
laws that led to the creation of so many Superfund sites have 
long been filled. Today, private parties are cleaning up most 
of the sites on the NPL. They are paying the full costs of 
those cleanups, which are sometimes extravagantly high. Our 
nine companies, alone, have spent over $2 billion on 
remediation since 1980, in addition to paying hundreds of 
millions more in Superfund taxes.
    The trust fund, on the other hand, is paying for cleanups 
at the relatively few orphan sites where no responsible party 
exists or can be located. By the way, it is important to note 
that the trust fund is also paying for many administrative 
functions that have little to do with cleaning up sites.
    The key point here is that Superfund has already addressed 
most of its original workload. Construction of the remedy has 
now been completed at most of the sites on the NPL. Superfund 
today is working on the remaining sites, which do include some 
of the largest, most complicated, and most challenging sites on 
the NPL.
    I'd like to focus, as an example, just on the Federal 
facilities situation. It is interesting to note that, although 
construction is complete at roughly 75 percent of the non-
Federal sites on the NPL, construction is complete at just 20 
percent of the Federal facility sites. It often takes much 
longer to select, design, and construct remedies at the Federal 
sites than it does at the other sites, and there are several 
reasons for this.
    First, these Federal sites are very large, often extremely 
large. Second, they contain many operable units, each of which 
must be addressed individually.
    Third, these Defense Department and Energy Department sites 
have on going public missions that cannot easily be disrupted 
by cleanup activities.
    Fourth, as the chair noted earlier, these sites are 
remediated using funds from the Defense or Energy budgets 
subject to extensive EPA oversight.
    Sites like these are what largely account for the recent 
drop in the number of construction completions being achieved 
each year. This drop in no way reflects a slowdown in the pace 
of cleanup or a dropoff in the commitment to cleanup.
    Looking now to the future, we face some fundamental 
questions about the purpose of the NPL. Today, most of the 
contaminated sites in this country are either being addressed 
by increasingly robust State cleanup programs or else they pose 
no immediate risks to human health or the environment. There is 
no reason to make a Federal case out of these sites by listing 
them on the NPL. Instead, going forward, the NPL should be the 
tool of last resort.
    Specifically, the NPL should be reserved for sites that are 
severely contaminated, that pose severe risks to health or the 
environment, and that have no near-term prospect of being 
cleaned up by private parties. Other sites should be managed 
under other programs. This includes the RCRA corrective action 
program, the LUST program, and also the full range of State 
cleanup programs.
    If these other programs are viewed as deficient in some 
respects, then those programs should be improved rather than 
just shifting sites over to Superfund as a default.
    Making the NPL the tool of last resort in this way would 
require some modest changes in current practice. EPA would 
explain in each proposed listing what it hopes to achieve by 
adding the site to the NPL. EPA would describe which other 
cleanup programs or other approaches it considered for the site 
and explain why it believes those other programs or approaches 
are not suitable. The public would have a chance to address 
these issues in the comment period on the proposed listing, and 
the site would be listed only if no other cleanup program or 
approach seemed likely to achieve results.
    It is fully expected that private industry will continue to 
perform and fund the cleanups at sites they have contaminated, 
regardless of which cleanup program is being used. The point 
here is that Superfund, with its famous inefficiency and its 
very high costs, is not the appropriate mechanism for most of 
these sites.
    Finally, I want to talk very briefly in the time remaining 
about removal actions. The Superfund removal program should be 
restored to its original intended purpose of addressing 
emergency situations. EPA currently spends about $250 million 
each year on removals, most of which do not involve emergencies 
in any sense of the term. The point here is not to quibble 
about the definition of ``emergency,'' but rather to refocus 
the removal program on its original purpose.
    Thank you very much.
    Senator Boxer. Thank you so much.
    Mr. Cornell.

  STATEMENT OF KENNETH CORNELL, EXECUTIVE VICE PRESIDENT, AIG 
                  ENVIRONMENTAL, NEW YORK, NY

    Mr. Cornell. Thank you, Madam chairwoman.
    I'm Ken Cornell, executive vice president of AIG 
Environmental. Thank you for allowing us to present our views 
on the Superfund program and suggest ways that the program can 
be improved to speed cleanups and reduce costs by using 
financial and insurance tools that can benefit both the private 
and public sector.
    I'm summarizing my testimony and request that the committee 
enter my full statement into the record.
    AIG Environmental is a division of American International 
Companies. AIG's general insurance operations are the largest 
underwriters of commercial and industrial insurance in the 
United States, with the most extensive international property 
and casualty network.
    We are a AAA-rated company by Standard & Poors, with over 
$450 billion in assets and a wide variety of insurance and 
financial products to serve our clients. AIG Environmental has 
over 20 years of experience underwriting environmental risks 
and is currently the Nation's leading provider of environmental 
insurance.
    We are here today to focus on three areas where we believe 
the use of environmental insurance can lead to more and faster 
cleanups of NPL sites within the existing framework of the 
Superfund statute. These are: cleanup cost cap insurance for 
fund-lead work by EPA, de minimis settlements for PRPs, and 
blended finite insurance programs that provide long-term 
funding for the cleanup of sites conducted by PRPs.
    First I'd like to talk about cleanup cost cap for fund-lead 
work by EPA. Based on our experience with other Federal 
agencies, we believe that we can devise a program for hazardous 
waste sites being cleaned by the EPA to help the Agency budget 
more effectively. Programs supported by insurance can maximize 
the use of existing Superfund dollars, provide protection 
against unexpected costs that can postpone or stop current 
projects while moving sites into redevelopment sooner because 
costs will be quantified and capped. Cleanup cost cap insurance 
can provide the EPA with a high degree of certainty as to what 
cleanup costs will be and provide private sector expertise in 
cost estimating.
    Cleanup cost cap protects responsible parties against 
unknown and unexpected cost overruns during cleanups. I've 
included an example in my written testimony.
    EPA often sees cost overruns of between 20 to 30 percent at 
fund-lead NPL sites. When these overruns occur, funds are often 
diverted from other future planned cleanups, thereby delaying 
cleanups at other sites. We've used similar programs with the 
Department of Defense in addressing both active and closing 
military bases, and also at formerly used Defense sites. An 
example of these are also included in my testimony.
    If the committee is interested in this approach, we would 
welcome the opportunity to work with you and the EPA to develop 
a program for fund-lead Superfund cleanups.
    Next I would like to speak about de minimis settlements for 
PRPs. One of the complaints often heard about the current 
Superfund process is the settlement of de minimis parties at 
sites. In order to get a full release of liability from EPA at 
its settlement, de minimis parties are usually charged a 
``premium'' by EPA to cover unexpected cost overruns at the 
site. These ``premiums'' may run between 50 to 100 percent of 
cleanup costs allocated to the de minimis parties, and most 
parties object to paying this ``premium.''
    We believe an insurance approach could significantly lower 
the premium for de minimis parties. This would work too through 
the use of cleanup cost cap insurance. As an example, if we 
assume that 200 de minimis parties at a site each has a cleanup 
liability of $20,000 for an aggregate of $4 million, if the de 
minimis parties were allowed to purchase a cleanup cost cap 
policy covering $4 million of cost overruns, their premium 
would vary between roughly 8 to 12 percent of the policy 
amount. The settlement would still provide EPA with the same 
dollars in cost overrun protection it was looking for, while at 
a much lower cost to the PRPs.
    This approach should result in faster settlements with the 
Government. Again, we would suggest that the committee might 
ask that EPA and the Department of Justice could make Superfund 
a fairer program for small parties while protecting the 
Government against unexpected costs.
    Finally, I'd like to speak about blended finite insurance 
programs. One of AIG Environmental's most important 
achievements occurred in November 2000 with the settlement of 
liability at the Iron Mountain Superfund site in California. 
This innovative settlement involving multiple private and 
public entities will provide funding for cleanup and cost 
overrun insurance over the next 30 years and fund a trust in 
perpetuity for the largest source of acid mine drainage in 
North America. This was achieved through the use of blended 
finite insurance and a guaranteed investment contract. Blended 
finite insurance is, very simply, a risk management tool 
utilizing cleanup cost cap insurance in conjunction with 
environmental loss control expertise. It is a flexible program 
combining insurance with discounted funding techniques for 
existing liabilities.
    The use of blended finite insurance programs may well prove 
to be one of the most effective tools to quickly settle 
liability at sites. It will provide funds for cleanup, even if 
in the future PRPs involved in the cleanup are no longer 
financially able to pay for the cleanups. I've also included an 
example of how this works in my written testimony.
    Blended finite insurance could prove to be a valuable 
policy tool. We believe that it should be considered much more 
frequently by the Government. Our belief is that this approach 
can lead to faster settlements and encourage faster cleanups.
    We would welcome the opportunity to work with the 
committee, EPA, and the Department of Justice to develop 
guidelines for the use of this approach at Superfund sites.
    Finally, Madam Chairwoman, thank you for this opportunity 
to present our views and solutions on Superfund issues. We look 
forward to being part of solutions with you, the committee, and 
the EPA, and our belief is that the approaches outlined here 
can assist Superfund in achieving its mission of protecting 
public health and the environment.
    Thank you.
    Senator Boxer. Thank you, Mr. Cornell.
    I am very interested in exploring some of these ideas with 
you, because, unlike Mr. Steinberg, I think we have a lot more 
to do, and so I am absolutely committed to looking at some of 
these ideas that you have, so we will work together.
    Mr. Cornell. Thank you. We look forward to it.
    Senator Boxer. Yes.
    Mr. Steinberg, I just have a couple of questions.
    You said you're representing Superfund Settlements Project 
today.
    Mr. Steinberg. That's correct.
    Senator Boxer. In your statement you said that Superfund is 
known for its famous inefficiency. That confuses me, because in 
December 2000, you issued a report--your group--and said:

          ``In the years since 1995, Superfund has achieved levels of 
        operational progress and public acceptance it had never before 
        experienced. EPA deserves to be extremely proud of what it has 
        accomplished in this field.''

    Mr. Steinberg. That's correct.
    Senator Boxer. Now, how does that square with your 
referring to the program and just dismissing it as known for 
its famous inefficiency.
    Mr. Steinberg. I think both statements are true. I think 
the program did achieve some dramatic up-turn in its success 
rate following the introduction in 1995 of the administrative 
reforms that that report discussed in some detail.
    Senator Boxer. Yes.
    Mr. Steinberg. I think Superfund has been and continues to 
be a highly inefficient program. It is not effective when it 
comes to purchasing goods and services in an efficient and 
cost-effective fashion. I don't think that's a particularly 
startling revelation.
    Senator Boxer. Well, I think it is startling to hear what 
you just said. You said it has achieved levels of operational 
progress it had never before experienced. That says to me, 
``operational progress'' means that it was operating in a much 
more efficient fashion. I think that, in fact, if I might say 
so, it is. Do you stand by both statements? Is that what you're 
saying?
    Mr. Steinberg. Another way to think of it is Superfund has 
achieved very impressive results. The cost we have paid for 
those results has often been much higher than it needed to be.
    Senator Boxer. Yes. OK.
    The other thing, you were saying that the only sites left 
were not really--that the Superfund has basically done its job 
is essentially what I'm getting. There's not many sites----
    Mr. Steinberg. Superfund has addressed a great deal of its 
original work load. Of the sites remaining on the NPL, there 
are 140 Federal facility sites, for example, where construction 
has not yet been completed, and, as Assistant Administrator 
Horinko pointed out earlier, the remaining sites will take 
longer to finish because of their nature. Yes.
    Senator Boxer. Yes. You also said there's no slowdown. How 
would you know that?
    Mr. Steinberg. My point is that the tapering off of 
construction completes achieved on an annual basis does not, by 
itself, show a slowdown in the pace of cleanup because sites 
have to be worked for years before you get to the point where 
they can become construction complete.
    Right now we have a slug of sites at the end that will take 
years before they can be made construction complete. That 
doesn't mean less work is being done.
    Senator Boxer. You said there was no slowdown. How would 
you know? I don't know. We don't even have any information. 
Have you seen a list of what they're going to do this year?
    Mr. Steinberg. I've seen no list that you haven't seen.
    Senator Boxer. OK. So, from what you've seen, you've 
decided there's no slowdown, when the administrator tells us 
she doesn't know what she's doing for this year and there are 6 
months left, but you already know there's no slowdown?
    Mr. Steinberg. Well, we have level appropriations 
throughout this period. We have the same number of FTEs. We 
have the same number of dollars, more or less, devoted to 
Superfund work.
    Senator Boxer. Well, it doesn't mean that you have the same 
level of dollars. Those dollars may be inefficiently used. 
Maybe they're going for things that--we were talking about that 
before--administration. There is, in fact, a slow--I'm just 
suggesting to you--I appreciate your testimony, and, believe 
me, I do, but you sound as if you have more information than I 
have, because I can't tell you whether there's a slowdown or 
not in 2002 because the Administration won't tell us what 
they're doing.
    We have testimony from a New Jersey site here today from an 
individual who has given a lot of his life to this cleanup who 
was told there is a slowdown; that, in fact, the information he 
had that things were moving forward in November, that's off. 
How can you sit here and say there's no slowdown when we have a 
gentleman who was told that there was going to be a cleanup--
and, sir, am I correct, it was made publicly that there would 
be a cleanup started. They were now told it would not be 
started. You're saying there's no slowdown?
    Mr. Steinberg. Well, I was speaking about the program as a 
whole across the board, not about any individual site.
    Senator Boxer. Fine. Well, may I suggest to you that it's 
not about charts, it's about real things happening on the 
ground. If you live in New Jersey and you were told there was 
going to be a cleanup in a site that had agent orange--and I 
was also taken with your point that, well, most of the sites 
have been taken care of. The fact is this site had agent orange 
on it. That's directly involved with the Vietnam War and what 
was being experimented with. There's a national problem here.
    By the way, it's not a particularly large site. It's a $40 
million site.
    So I just say, before you make these sweeping statements, I 
just would say, you know, in a friendly fashion, not as a 
critical fashion, I think you may be able to make that 
statement once you know and I know what is going to happen this 
year, but we have no information. People who were told they 
were on for a cleanup are now being told we don't know. So I 
would suggest that when we have our next hearing maybe we'll 
reassess our statements whether there's a slowdown or not. I 
would suggest on a number of sites clearly there is a slowdown. 
You can't deny that. When the Administration, itself, is going 
from its projection of 75 to 47, how can you say that's not 
slowdown?
    Mr. Steinberg. But that's not a measure of the amount of 
cleanup work being done in a given year. That's simply----
    Senator Boxer. It is a measure of how many sites are going 
to be cleaned up, from 75 sites. You can cut it any way you 
want, but if you are in those--you know, this is a drop of 
almost half--actually, more than half from what happened in the 
Clinton administration. You say there's no slowdown? I'm 
suggesting to you that there are 40 places in this country that 
expected to get cleaned and they're not going to get cleaned.
    So I guess, you know, you can slice it any way you want, 
but we obviously slice it a little differently when we look at 
the problem.
    But I just want to say that this has been a terrific 
hearing, however troubling, and this is just the first.
    Thank you. We stand adjourned.
    [Whereupon, at 12:30 p.m., the subcommittee was adjourned, 
to reconvene at the call of the chair.]
    Additional statements submitted for the record follow.

      Statement of Hon. James M. Jeffords, U.S. Senator from the 
                            State of Vermont

    I commend Senator Boxer for conducting today's hearing on the 
Superfund program. Oversight of the Superfund program is a critical 
task for the Subcommittee on Superfund, Toxics, Risk, and Waste 
Management. Senator Boxer's efforts have the full support of this 
Committee.
    The Committee on Environment and Public Works is committed to the 
success of the Superfund program. This goal transcends party lines as 
demonstrated by the March 8 audit request to each of the EPA's 10 
regional offices. Senators Bob Smith and Lincoln Chafee joined Senator 
Boxer and myself in requesting information on whether a shift in 
Superfund revenue composition is affecting site remediation progress.
    I am concerned that it took EPA a full month to comply with this 
request. The information we sought about site progress and cost 
estimates should have been readily available from the regions. I have 
to believe that EPA's regional offices are better organized than this 
exercise has demonstrated. Therefore, it raises questions and concerns 
about EPA's intent, especially in light of the e-mail that has come to 
the Committee's attention. In this message, EPA headquarters directed 
regional managers not to discuss site slowdowns or financial 
shortfalls. I should not need to, nor will I again, remind EPA that it 
is not their prerogative to limit information provided to this 
Committee and to Congress.
    All evidence points to a slowdown in the Superfund program. EPA's 
own data illustrates several areas of concern. First, EPA reports that 
eight NPL sites did not proceed due to a lack of funding in FY 2001. 
This number is unknown for FY 2002. Second, every region but one will 
experience a decline in construction completions from FY 2001 to FY 
2003. Third, every region will experience a decline in new starts from 
FY 2001 to FY 2002. Finally, concerns are raised by a discrepancy in 
the regions' estimated numbers of fund-lead sites, and therefore what 
portion of the total cost of NPL site cleanup, estimated by EPA to 
exceed $9.3 billion in nine of the regions, will fall on to the 
shoulders of taxpayers.
    Currently, Superfund projects are moving forward as expected in 
Vermont. However, I understand that funding could present a problem as 
early as this fall. I am particularly concerned about the Pownal 
Tannery and Elizabeth Mine Superfund sites and the availability of 
funds to keep pace with ongoing progress at these Vermont sites.
    EPA's response to this Committee's inquiry leaves many questions 
unanswered. What is the reason behind EPA's slowdown of the Superfund 
cleanup program? Is the Administration's refusal to seek 
reauthorization of the Superfund taxes contributing to this slowdown? 
Is EPA headquarters providing the regions with the necessary guidance 
and support to ensure the Superfund program's success?
    I am hopeful that today's hearing will shed some light on these 
issues.

                               __________

  Statement of Hon. Max Baucus, U.S. Senator from the State of Montana

    I would like to thank Senator Boxer for holding this timely hearing 
on the Superfund program. As many of my colleagues on this Committee 
know, the Superfund program has had an enormous impact on my state. The 
most recent and most dramatic example has been in Libby, Montana.
    Libby stands out because the human cost from wide-spread 
environmental contamination has been so great--over 200 people have 
died from exposure to asbestos contaminated vermiculite from the now-
defunct mine owned and operated by WR Grace. Many hundreds, if not 
thousands, more are expected to die over the next few decades. 
Unfortunately, WR Grace has declared bankruptcy. Who knows how much WR 
Grace will ultimately contribute to the long-term health and well being 
of the Libby community.
    Although the Environmental Protection Agency should have addressed 
the problem in Libby many years before it did, the EPA, once it invoked 
its authorities under CERCLA, has done a very good job in Libby in 
responding to the most immediate public health hazards posed by the 
vermiculite contamination. I hope and believe that EPA will continue to 
make Libby one of its top priorities for long-term clean-up now that 
the Governor has chosen Montanan's only ``silver bullet'' for Libby.
    But, I do want to point out that EPA's positive activities in Libby 
illustrate how very important the Superfund program is, in providing 
the resources, the authority and the expertise needed to address 
serious environmental and public health disasters, such as occurred in 
Libby. The program is not perfect, no program is perfect, but it is 
effective and it is working in Libby, Montana.
    I remember very clearly when Congress was debating Superfund, and 
thinking what an awesome legacy we in Congress could leave America by 
enacting this historic legislation. Seeing how Superfund has played out 
in Libby 25 years later means a lot to me personally; I know what it's 
meant to the people in Libby.
    Libby is the highest-profile Superfund site in Montana, but it is 
not the only Superfund site in Montana. Montana is also home to one of 
the largest Superfund sites in the Nation in the Clark Fork Basin. The 
site, contaminated by abandoned and active hardrock mine wastes 
stretches for more than 100 miles in Southwestern Montana, and includes 
the mile-deep Berkeley Pit in Butte, Montana. Despite the size of this 
site, and the sheer amount of contamination, the Clark Fork has seen a 
lot of success from the Superfund program, not only in terms of clean-
up, but also economic benefits for the local community.
    There are many other sites in my state, the legacy of our mining 
and industrial past. Ultimately, all of these sites must be cleaned-up. 
Like many of my colleagues, I don't want to see cleanup delayed. As the 
Chairwoman said in her opening statement, a Superfund designation is 
not a trivial event for the communities involved--it invokes fear and 
uncertainty about the future and about the effects of any contamination 
on public health, it affects real estate prices and it can impact local 
business. It's just not fair to saddle communities with that burden for 
any longer than is necessary. I am concerned, as are many of my 
colleagues on this Committee, that the Administration may be reducing 
the Federal Government's commitment to protecting the health and well 
being of our citizens through the Superfund program. I am particularly 
concerned that sites in my state may not get funded next year, even 
sites that are in the middle of the clean-up process.
    I look forward to the testimony of our witnesses today, and I hope 
the Administration will be able to respond to my concerns 
satisfactorily.

                               __________

       Statement of Hon. Bob Smith, U.S. Senator from the State 
                            of New Hampshire

    I want to welcome all of the witnesses who have come before this 
subcommittee to testify on an issue that I have been closely involved 
with for quite some time. Before I became chairman of the full 
committee in 1999, I had been the chairman of this subcommittee. 
Needless to say, I have quite an extensive background on Superfund. It 
would be a vast understatement to say that, historically, Superfund has 
been a challenging issue. That challenge has not diminished with time.
    We are entering a period where we are addressing some of the most 
complicated and complex Superfund sites--sites that do not allow for 
simple remediation. It is inevitable that these sites will take a 
longer period of time to clean up--that is simply a fact.
    I know some will try to score political points by comparing the 
time it takes to clean up the sites of today, and the number of sites 
we clean up, with the less complicated sites of the past. 
Unfortunately, that comparison doesn't paint an accurate picture. I am 
also aware that the Superfund tax will be the subject of political 
posturing. That tax expired in 1995--a time when I was heavily involved 
in trying to pass comprehensive Superfund reform. It didn't make sense 
to reauthorize a tax for a program that was broken. I have consistently 
held that position.
    Superfund still needs to be reformed. If you don't believe that to 
be the case, then come to New Hampshire and talk to anyone who has been 
involved in Beede Superfund site. It is a disgrace what the law has 
done to so many good people who were only trying to do the right thing. 
I have introduced legislation once again to address these problems, but 
so far there has been a lack of will to do the right thing.
    Until we can fix the problems with Superfund, we shouldn't consider 
renewing the tax. I want a Superfund program that is a success. One 
that will be fair and will clean up the problems created in the past. I 
have fought hard to get many sites in New Hampshire cleaned up, and I 
continue to do so. It has not been rare to fight to keep sites off of 
the Superfund list out of fears that listing would delay clean up 
efforts.
    We must fix this law. For years there has been tremendous 
resistance to comprehensive reform. When I was chairman, I decided that 
we should try a piecemeal approach--one step at a time. We took a big 
step last year with our Brownfields bill. That effort took strong 
leadership and a bipartisan commitment for us to achieve our ultimate 
success. I hope we can take the next step toward comprehensive reform 
soon.
    I want to welcome our witnesses today and thank them for sharing 
their thoughts on the Superfund program--a special welcome to Assistant 
Administrator Marianne Horinko. I appreciate and commend you for the 
approach you have brought to your office--one that encourages 
innovation and thinking outside the box.
    If we are to meet the current and future challenges of Superfund, 
we must be able to think and act outside the box. A leading insurance 
company--AIG--will present one such approach today. This company has 
been on the forefront of innovative approaches to the financial side of 
Superfund and Brownfield cleanups since 1980. Their testimony raises 
some interesting approaches to Superfund that could provide cost 
savings to both the government and private sector. I know that the 
Department of Defense has utilized this approach and found it to be 
very effective in managing costs at a number of sites. I would 
certainly encourage EPA to take a serious look at this innovative 
concept.
    I will be following up with EPA on this and other innovative ideas 
that will help to speed up cleanups and are in the best interest of the 
taxpayer. Superfund isn't an easy issue, but we must continue to find 
ways to make it a better program for all involved. Again, I want to 
thank you all for your appearance before this subcommittee and I look 
forward to your testimony.

                               __________

 Statement of Marianne Lamont Horinko, Assistant Administrator, Office 
 of Solid Waste and Emergency Response, U.S. Environmental Protection 
                                 Agency

    Good morning Madam Chairman and Members of the Subcommittee. I am 
Marianne Horinko, Assistant Administrator of the Office of Solid Waste 
and Emergency Response, U.S. Environmental Protection Agency. I am 
pleased to appear today to discuss the Superfund program and identify 
some of the new challenges facing EPA as the program continues into its 
third decade.
    Administrator Whitman and the Bush administration are fully 
committed to Superfund's mission, protecting human health and the 
environment by cleaning up our Nation's worst hazardous waste sites. 
Thanks to a decade of reforms launched by the first Bush administration 
and continued by the previous Administration, the Superfund program has 
achieved dramatic success. In that same bipartisan spirit, we embrace 
the new issues facing the program as it matures. Further, as the 
members and staff of the Environment and Public Works Committee located 
in the Hart Senate Building learned first hand, one of the many 
challenges of the Superfund program is to address threats posed to 
Homeland Security. Today, I will outline the innovative ways EPA is 
addressing the Superfund program's important tasks.

                           SUPERFUND PROGRESS

    The Superfund program continues to make progress in cleaning up 
hazardous waste sites on the National Priority List (NPL). Through 
fiscal year 2001, 92 percent of the sites on the NPL are either 
undergoing cleanup construction or have cleanup construction completed:
     804 Superfund sites reached construction completion
     401 Superfund sites had cleanup construction underway
    In fiscal year 2001, EPA completed construction at 47 Superfund 
sites. However, the decline in the number of NPL sites that reached 
construction completion in fiscal year 2001, as compared with fiscal 
year 2000, did not reflect the amount of cleanup construction underway 
at Superfund sites. EPA has maintained the number of construction 
projects underway at NPL sites, more than 730 per year, from fiscal 
years 1999 through 2001. The President's fiscal year 2003 budget 
request continues a commitment to clean up hazardous waste sites by 
maintaining EPA's budget for the Superfund program with a request of 
$1.29 billion.

            SUPERFUND CLEANUP COMMITMENTS AND COST RECOVERY

    This Administration reinforced its commitment to the ``polluter 
pays'' principle by securing cleanup from responsible parties at 
approximately 70 percent of non-Federal Superfund sites. Fiscal year 
2001 produced a near record in Superfund cost recovery and cleanup 
commitments from responsible parties. EPA's enforcement program 
generated $1.7 billion, nearly $300 million more than in fiscal year 
2000 and the second highest amount in the history of the Superfund 
program. The cumulative value of responsible party commitments since 
the inception of the program now exceeds $20 billion.

                  HOMELAND SECURITY/BIOLOGICAL HAZARDS

    EPA's Emergency Response program was on the front lines at the 
World Trade Center, the Pentagon and the Anthrax incidents and the 
Agency is proud of our ground-breaking work. EPA, in partnership with 
the Centers for Disease Control and Prevention (CDC), the Agency for 
Toxic Substances and Disease Registry (ATSDR), and District of Columbia 
public health officials, successfully completed anthrax cleanup in the 
Hart Senate Building--- a task never before achieved in public health 
history. EPA continues to provide technical assistance at three U.S. 
Postal facilities that have not completed anthrax cleanup and at the 
AMI building in Boca Raton, Florida. EPA is also examining ways to 
improve Chemical plant site security. We have been working closely with 
representatives from the chemical industry, first responders, and 
community and environmental groups to ensure that high levels of 
prevention are maintained, along with protectiveness and 
responsiveness.

                          BROWNFIELDS PROGRAM

    EPA's brownfields program, through its grants, loans, and other 
assistance, continues to promote the cleanup, development and reuse of 
blighted, abandoned brownfield sites throughout the country. The 
brownfields program has successfully supplemented the cleanup and 
development efforts of states, Tribes and local governments. I am 
pleased to report that EPA's brownfields cleanup program has leveraged 
more than $3.7 billion in cleanup and redevelopment funds, and has 
generated more than 17,000 jobs. EPA funding has provided the resources 
to states, Tribes and local communities to assess more than 2,600 
brownfield sites.
    Thanks to the enactment of bipartisan brownfields legislation, we 
can expect to see even greater success by states, Tribes and local 
communities in reclaiming brownfield sites and encouraging the cleanup 
and reuse of sites by the private sector. EPA is now in the process of 
planning implementation of the provisions in the Small Business 
Liability Relief and Brownfields Revitalization Act (Public Law 107-
118). The fiscal year 2003 budget reflects the President's priorities 
and our commitment to cleaning up and revitalizing communities by 
doubling the brownfields budget to $200 million.

                   PUBLIC LAW 107-118 IMPLEMENTATION

    EPA has formed a number of internal workgroups to develop policy 
implementing the new law. We are conducting listening sessions, both 
here in Washington and at the regional level, to gather stakeholder 
views prior to issuing new policies. EPA is developing brownfields 
grant application guidelines for the new funding that will be available 
in the fall of 2002.
    Further, EPA's enforcement program is carefully reviewing key 
brownfields liability and enforcement provisions in the Act and will 
undertake several activities, such as issuing guidance to regions on 
key terms in the statute and promoting a consistent approach onsite-
specific questions. In addition, EPA's enforcement program will be 
working to develop guidance on certain key provisions of the de 
micromis and Municipal Solid Waste (MSW) exemptions. EPA is also 
evaluating what new settlement procedures might be necessary under the 
revised CERCLA Sec. 9122(g).

                        REDEVELOPMENT AND REUSE

    I have made land revitalization a top priority for the Office of 
Solid Waste and Emergency Response and it is an integral part of the 
way EPA is implementing all waste cleanup programs. Achieving cleanup 
is not enough. It is necessary to view a property in terms also of the 
future economic, recreational or ecological benefits it represents to 
those who live nearby. It is important that we build on our success in 
the Brownfields program and make land revitalization a part of the 
Agency's organizational culture. We are making progress in the 
Superfund program. More than 260 Superfund sites have been put back 
into reuse, generating more than 15,000 jobs and representing $500 
million in economic activity. While our fundamental mission remains to 
protect human health and the environment, we need to ensure that we 
fully consider a community's desired future land use for a property as 
we make cleanup decisions. We are working on tools to assist EPA 
managers and staff as they work closely with state, public and private 
stakeholders in facilitating property revitalization.

                         NEW CLEANUP CHALLENGES

    As the Superfund program continues into its third decade, new 
challenges must be met to continue the progress in cleaning up 
hazardous waste sites. Entering fiscal year 2001, EPA had anticipated 
the potential for a reduction in achieving site construction 
completions. The Superfund process, from site listing to cleanup 
construction, on average has taken roughly 8 to 10 years. Decisions 
made 5 years before a site ever reaches the construction phase, for 
instance delaying the Remedial Investigation/Feasibility Study (RIFS), 
will have an impact on when that site reaches construction completion 
many years later. This is the current situation we face in the 
Superfund program. The reduction in construction completions has 
resulted from a variety of factors, including decisions made years ago 
on funding priorities; the size and number of construction projects at 
remaining non-construction complete sites on the NPL; and the need to 
balance competing environmental priorities within the Superfund 
program. In prior years, EPA focused resources on Superfund sites that 
needed less construction work and that were further along in the 
cleanup process, thus creating a backlog of sites with significant 
years of construction work remaining.
    The remaining number of Superfund sites that have not reached the 
completion stage includes area-wide ground water sites, mining sites, 
sediment sites, and Federal facility sites. The size and complexity of 
these remaining sites generally indicate longer project durations and 
increased costs required to complete cleanup construction. There are 
now a greater number of Federal facilities and very large sites (mega-
sites exceeding $50 million in cleanup costs) as a percentage of NPL 
sites not construction complete than ever before. Of the remaining 675 
final NPL sites not construction complete, 138 are Federal facilities 
and an additional 93 sites are mega-sites.
    Given the nature of the remaining sites on the NPL that have not 
been completed, the use of construction completion as the overriding 
measure of Superfund program progress is becoming less helpful. The 
timeframe needed to complete Federal facility sites and mega-sites 
represents so many years, that newer, more meaningful environmental 
indicators need to be developed. Currently, the Superfund program is 
credited with only one construction completion whether the site 
completed would be a 100 square mile former mining site or a one-acre 
former wood-treating site. The public needs tools for measuring success 
that describe significant accomplishments at these challenging sites 
over time.

                  SUPERFUND PIPELINE MANAGEMENT REVIEW

    Although the number of Superfund sites completing construction in a 
given year is being affected by program decisions made years before, 
EPA is looking for new ways to improve program performance. The Agency 
has initiated a comprehensive review of all Superfund projects in or 
approaching the most expensive phase of our project pipeline, 
construction. After completion of this analysis and implementation of 
some challenging decisions, EPA intends to work toward an optimal 
balance between the achievement of risk reduction, construction 
progress, and beneficial re-use at Superfund sites. I would expect the 
first phase of the review to be complete in late spring with a draft 3-
year plan at the end of the summer.

                             NACEPT PROCESS

    EPA is also launching a public dialog through the National Advisory 
Council on Environmental Policy and Technology (NACEPT), a Federal 
advisory committee comprised of a broad cross-section of stakeholders, 
that will examine the role of the Superfund program in addressing very 
large ``mega-sites'', the appropriate role of listing sites on the NPL 
as one of many tools to address contaminated sites, and strategies to 
improve program effectiveness and efficiency through coordination with 
states, Tribes, and the public. We will work closely with the 
Environment and Public Works Committee as the NACEPT expert panel 
debates these important public policy issues.

                               CONCLUSION

    EPA will continue its efforts to improve Superfund program 
performance and meet the many new challenges facing the Agency in 
cleaning up hazardous waste sites. The President is fully committed to 
the Superfund program's success and toward fashioning a sustainable 
future course for the program as it continues into its third decade. We 
also will continue our efforts in protecting Homeland Security, 
improving chemical plant security, and working with other Federal 
Agencies in responding to biological hazards. I look forward to working 
with Congress in the months and years ahead as we strive to meet our 
common goal of protecting human health and the environment.

                               __________

       Statement of Councilwoman Norma Lopez-Reid, Montebello, CA

    My name is Norma Lopez-Reid. I reside in, and am a councilwoman 
for, the city of Montebello, California. I began my involvement in 
addressing the problems of the Operation Industries Landfill as a 
resident of this community. Today I am here to speak to you, both, as a 
resident who lives one house away from the landfill, and in my official 
capacity with the city.
    I would like to talk about the positive experience that my 
community has had with EPA and what they have done, at one of the 
largest Superfund sites, to assist us with a monstrous problem. When my 
neighbors and I moved into this development of new homes, we had no 
idea that the area was infested with toxic, hazardous waste, which 
included vinyl chloride, a known carcinogen. Had it not been for the 
remarkable clean up efforts of EPA with their program, the authority to 
make responsible parties accountable, and the funds to begin the 
project, our health and the well being of our community would still be 
at stake.
    In the city of Montebello, California, residents living near the 
Operating Industries Landfill (OII) came home each evening to an area 
filled with migrating gases, that made them suffer from headaches, 
nauseating odors, and grass-less yards due to the hazardous liquid 
waste, called leachate, that seeped out of the ground. These difficult 
circumstances made the quality of life in this bedroom community 
decrease considerably, we couldn't even open our windows on hot summer 
nights. Little did our residents know the extent to which companies, 
large and small, had been allowed to dump incredible amounts of 
hazardous waste, including carcinogens, into the landfill that was only 
supposed to contain regular trash. By the time the Environmental 
Protection Agency (EPA) got involved, approximately 180 million gallons 
of hazardous waste had been illegally dumped in our backyards creating 
massive numbers of safety hazards for the people of Montebello. 
Although many of the residents here began their campaign with local and 
state officials to close the OII landfill, the real work and relief 
began when EPA declared the landfill a Superfund Site in 1986.

                         BACKGROUND INFORMATION

    The OII site is a 190-acre parcel located in the city of Monterey 
Park, California, 10 miles east of downtown Los Angeles. The landfill 
property marks the boundary between the city of Monterey Park and the 
city of Montebello. The residential neighborhoods are on the south and 
east ends of the parcel, which is bisected by the Pomona (Rte. 60) 
Freeway. Landfill operation began in approximately 1950 and continued 
until 1984. EPA listed the site on the National Priorities List in May 
1986.
    When EPA entered the picture, they took significant steps to reduce 
health risks to nearby residents by addressing impacted residences 
adjacent to the site. These efforts included treating the migration of 
methane and other gases in the houses, the migration of liquid leachate 
into the yards and park areas and the threats of slides from unstable 
slopes onto the homes, to mention a few items. In addition to these 
emergency response actions, EPA was able to take steps to have the 
responsible companies pay for their part of the cost in the clean up. 
EPA invested several million dollars to begin the investigation and 
emergency response, that money came from the Superfund. EPA leveraged 
the Federal dollars by obtaining agreements for the polluters to pay 
for this multi-hundred-million dollar effort at this site. If the 
Federal Government had not stepped in with dollars toward this project, 
our community would still be suffering from this horrible threat. 
Making this a priority has made a tremendous difference in our lives.
    When EPA took over the site, they had to assess all that was there 
and they literally had to ``triage'' the site in order to begin their 
efforts. They realized that the gasses and liquid leachate were 
probably the most significant threats to the community's health and 
safety and, therefore, built a gas collection and treatment facility 
and a leachate collection treatment plant.
    In 1992-93 approximately 200 homes were tested for the possibility 
of migrating gases, such as vinyl chloride, seeping into the homes. Six 
homes were found to have an elevated level of vinyl chloride or methane 
gas. (I recall hearing about small explosions in the fireplace of one 
of my neighbors.) EPA installed gas collection systems in these homes. 
For 10 years the EPA monitored these homes with incredible patience and 
dedication.
    There were 8 consent decrees that outlined the problems and 
remedies needed. This included additional landscaping for the buffer 
zone in Iguala Park, where many of our children played as they waited 
for the school bus, since that had been a designated bus stop prior to 
our awareness of the contamination that had taken place in the area. 
Fortunately, EPA fenced off the area, immediately, in order to avoid 
further contamination so that our children could be safe.
    An aspect of this situation that is important to note is that, soon 
after the landfill was closed, the OII owner quickly declared 
bankruptcy and walked away from the monstrous situation he had allowed 
to be created. I can assure you that many of the thousands of culprits 
involved would have done the same had it not been for EPA making them 
accountable for their actions.
    One of the most notable efforts from EPA has been the unique level 
of community involvement that they have always sought. They not only 
kept us informed of their discoveries, plans and processes but gave us 
the opportunity to give them feedback and become actively involved in 
the decisionmaking efforts. This, in itself, made a tremendous 
difference for our neighbors and their peace of mind.

                     ADDITIONAL OBSTACLES AND FEARS

    During these difficult times many of our neighbors thought that 
maybe selling their homes and leaving the area would be best for their 
families. Unfortunately, the value of our property plummeted and those 
who were even able to sell did not get their market value's worth.
    In the meantime, there was still a tremendous concern about our 
health and the health of our children. Even some of our pets came down 
with inexplicable tumors and growths. There is one specific cul-de-sac 
that backs up into the landfill area in which three families have had 
confirmed cancer diagnosis. The worst fears have come true for some of 
our neighboring families--several of our neighbors have already died of 
cancer--including one of our neighborhood leaders and heroes, Hank 
Yoshitake. To this day, the fear continues to permeate throughout the 
neighborhood that, in time, others of us may come down with cancer. 
While EPA has prevented further exposure to contaminants, we hope that 
the Public Health Department will monitor the long-term effects of the 
original contamination.

                     MOST RECENT AND FUTURE EFFORTS

    The most dramatic work that has been done on the site was the 
construction of the permanent landfill cover in 2000. This involved 
major earth moving to remove old dirt and replace it with a six-foot-
thick cover of clean soil and vegetation on the slopes of the landfill. 
The purpose of the multi-layer cover is to prevent rainwater from 
entering the landfill and to stop landfill gas from migrating out. In 
December of 2001 EPA completed the construction of the ground water 
remedy. Maintenance of operation and maintenance of site systems is 
still in progress.
    EPA has continued to work with the city of Monterey Park and 
private industries to re-develop the 45 acre parcel of land to the 
north of the freeway which did not have significant quantities of 
hazardous waste. This land has been one of the largest pieces of 
underdeveloped property in the Los Angeles area. The Monterey Park City 
Council is working with the Montebello City Council to build a center 
for retail shopping on the site.
    In conclusion, the EPA's involvement and incredible heroic efforts 
at the OII landfill have been enormously successful. It is critical 
that these efforts be continued in other areas where these monstrous 
problems have taken place. This example should serve as a powerful 
reminder that no population should be forced to shoulder and live in 
such burdensome environments, this is the reason it is important that a 
strong Superfund program be available to assist others in this type of 
situation.

                               __________

   Statement of Robert Spiegel, Executive Director, Edison Wetlands 
                           Association, Inc.

    Superfund is not merely about numbers and budgets. Superfund is 
also about people living in poisoned communities. And about promises 
made to the American people by the Federal Government that are about to 
be broken.
    My name is Robert Spiegel. I am the Executive Director of the 
Edison Wetlands Association, a non-profit environmental organization in 
central New Jersey that has been working for the cleanup of Superfund 
sites for more than a decade. The Edison Wetlands Association is now 
actively involved in seven Superfund site cleanups and 15 state-led 
cleanups in New Jersey.
    I am here today to tell you the story of one Superfund site--the 
impact it has had on the surrounding community, and the consequences 
that will result from the lack of funding to clean the site up. I am 
also here to ask that funding for remediating these sites be continued. 
It is imperative that we deal with these sites swiftly and 
conscientiously, or we will continue to endanger the lives of our 
citizens and future generations.
    I have been closely involved with the Superfund process since 1991. 
For 11 years, I have been working to have the Chemical Insecticide 
Superfund Site in Edison, New Jersey, cleaned up. From 1954 to 1972, 
the Chemical Insecticide Corporation, CIC, manufactured pesticides, 
herbicides, and fungicides, including Agent Orange and other 
experimental defoliants that were used during the war in Vietnam. After 
owner Arnold Livingston declared bankruptcy and moved along to his next 
site, the buildings were razed, leaving a vacant lot where the soil and 
ground water are highly contaminated with arsenic, heavy metals, 
pesticides, and dioxins.
    In the spring of 1991, a friend asked if I wanted to see ``green'' 
rabbits. Armed with a video camera, we took a short ride to the 
Chemical Insecticide Superfund Site. The first thing that struck me was 
the smell--the smell of death and decay. Nothing grew on the property 
except a strange florescent green moss. Small animal carcasses littered 
the area, and there were, indeed, ``green'' rabbits living there. The 
rabbits had developed an abnormal greenish yellow undercoat that I 
would later discover was the result of Dinoseb, a pesticide disposed of 
in large quantities throughout the site.
    We followed a trail of yellow liquid draining from the back of the 
site downstream past a neighboring industrial bakery and into the 
Edison Glen and Edison Woods residential developments. There we video 
taped a child playing in the poisoned stream who told us it was a good 
place to hang out and look for frogs and turtles. I subsequently found 
out that the vacant CIC lot was a playground for local children, the 
chemical lagoons were their wading pools, and adults routinely 
scavenged materials from the site.
    I contacted the Environmental Protection Agency (EPA), spoke with 
the project manager and sent him a copy of the videotape. About 2 weeks 
later the EPA posted warning signs along the brook. Panic erupted as 
residents assumed the worst--they were at risk from exposure to a 
witches' brew of chemicals, and the value of their homes had plummeted 
overnight. The EPA, however, refused to conduct additional testing. It 
seemed that, having posted the signs, they felt that the problem had 
been solved.
    I started a small citizens group to work on gathering and 
disseminating reliable information. We held a series of public meetings 
to inform the local residents and public officials about the 
contamination and discuss what could be done. From 1991 to 1993, the 
newly formed Edison Wetlands Association pursued vigorous and 
continuous interaction with the EPA, and state and local health 
officials. Public hearings were held and the issue was widely 
publicized on television and in print.
    I also assisted in the relocation of several families who were 
plagued by illnesses--illnesses widely believed to be the result of 
living downstream from what the Agency For Toxic Substance and Disease 
Registry had labeled a ``Public Health Hazard''. A local police officer 
had a rare blood disease, his wife had reproductive problems, and their 
two children were showing symptoms of arsenic exposure. I worked with 
the family and their attorney to relocate them to a safer home in East 
Brunswick, New Jersey. Several employees of a bakery on adjoining 
property died as a result of cancer believed to be caused by toxic 
runoff from the CIC site. The attorney for several of their widows 
called on me to testify, since I had witnessed and video taped the 
yellow ooze draining from the site onto the bakery property. This was 
one of the most difficult things I have ever had to do. No one should 
have to die because they work near a Superfund Site.
    By spring 1993, the Edison Wetlands Association relationship with 
the EPA began to develop into a more productive one. At the suggestion 
of the EPA, we applied for and were awarded an EPA Technical Assistance 
Grant (TAG). The grant allowed us to hire technical experts to help us 
understand the scientific and technical issues as well as the 
limitations of the Superfund program. We were able to secure a 
comprehensive cleanup and restoration of the Edison Glen and Edison 
Woods residential developments and the Mill Brook. The EPA also 
installed a temporary liner on the site to prevent direct contact with 
the most contaminated soils.
    Since 1993, we have worked closely with the EPA on the Chemical 
Insecticide site, as well as other Superfund sites in central New 
Jersey. While we have had vocal, and sometimes heated disagreements, we 
have also seen tangible results at the site. By 2001, the CIC Site was 
considered as a national model for the Superfund Program, demonstrating 
effective public participation and resulting in a full and permanent 
cleanup of the area. Three presidents, three Governors, and three 
remedial project managers later, all of the interested parties decided 
that the best course of action was to remove the contaminated soil from 
the CIC Site, the adjoining bakery, and several other neighboring 
industrial properties.
    The estimated cost for cleanup of the CIC site is $40 million and 
CIC is on the Superfund appropriations list. At our last joint public 
meeting in January, the EPA announced to the community that this work 
was to begin in November 2002. Several weeks ago, I received a call 
from the EPA informing me that there was no money to begin this, or any 
new cleanups in our region and there probably would not be funding for 
several years. Meanwhile, the temporary cover at the CIC Site is 
breaking down and now has holes in it. When it fails, the brook and the 
nearby residential developments will once again be exposed to 
contamination. It is obvious that we need a permanent solution now, not 
sometime in the distant future.
    Today I've talked about just one Superfund site and its impact on 
just one community. There are 1,235 Superfund sites impacting thousands 
of communities across the country. Chemical pollution has severely 
impacted our water, air and soil. Manufacturers, residents, and 
government, as stewards of these resources, must protect them and work 
toward their restoration.
    The Superfund program was begun not only to protect human life but 
also to cleanup and restore our natural resources. We need the funds 
generated by the Superfund tax and only with your help can we get 
Superfund back on track. I ask you to assist in making our communities 
whole again.
    Thank you for the opportunity to testify.
    Statement of Grant Cope, on behalf of the U. S. Public Interest 
                             Research Group

                               I. SUMMARY

    Superfund, the nation's preeminent law for cleaning up our 
country's most heavily contaminated toxic waste sites, is heading for 
serious trouble. Since 1980, Superfund has cleaned up a steadily 
increasing number of sites, which has translated into tangible public 
health and economic benefits for communities across the country. 
Conversely, the recent and dramatic decline in the pace of cleanups 
could portend a continuation of serious public health and environmental 
threats and delayed economic revitalization for communities and people 
across the country.
    Toxic waste sites are a significant and widespread threat to public 
health and environmental quality. While the Superfund program has made 
great strides in expediting the remediation process, there are still 
hundreds of sites in Superfund's pipeline that must be cleaned up. 
Resources for the Future's report to Congress noted that EPA officials 
expected a dramatic increase in the number of annual listing, to around 
50 sites per year in some cases. This nation's industrial development, 
aided by industry's poor management of its toxic wastes, has created a 
legacy of sites that EPA and state officials recognize will not soon 
disappear. The Nation must vigorously respond to this public health 
threat by redoubling its dedication to cleaning up toxic waste sites.
    By contrast, the Bush administration has presided over a greater 
than 50 percent decline in the pace of cleanups in just 2 years. During 
this decline, the administration has under funded the Superfund program 
by $1 to $1.4 billion from 2001 to 2003. Superfund's surplus, which has 
fueled cleanups since Superfund's taxes expired in 1995, will have 
dwindled from a high of $3.6 billion in 1995, to only $28 million in 
2003. In short, the future of Superfund's ability to protect public 
health and environmental quality from the nation's worst toxic waste 
sites is in jeopardy.
    Thus far, the Bush administration's response has included denying 
that any sites have been affected, claiming that any problems are 
related to the increased number (or percentage) of mega-sites in the 
program, and opposition to any reauthorization of Superfund's 
polluters-pay taxes unless the program is ``reformed'', a term often 
associated with weakening the program's protections. All three 
responses ignore facts that naturally lead to a more satisfying and 
complete answer.
    The pace of clean ups has dramatically slowed down without any 
appreciable change in the composition of sites in Superfund's pipeline 
over the last 2 years. The administration should acknowledge this and 
respect the public's right-to-know about the impacts of policy 
decisions on their communities. Therefore, the administration should 
tell the public which sites might be affected by a lack of clean up 
resources. The administration should also preserve Superfund's 
protections by working to reauthorize Superfund's polluters-pay taxes, 
without any associated proposals that weaken protections. Finally, the 
administration should acknowledge that the composition of Superfund's 
pipeline has not changed so dramatically in less than 2 years, but 
rather, the administration has simply under funded cleanups.

               II. SUPERFUND SITES THREATEN PUBLIC HEALTH

    There are about 600,000 toxic waste sites across the country. About 
1,223 are currently listed for clean up under the Superfund. One out of 
four people in America lives within one mile of a Superfund site. 
Eighty-five percent of all Superfund sites have contaminated 
groundwater. Fifty percent of people, and virtually 100 percent in many 
rural areas, rely on groundwater for drinking water. Children born to 
parents who live within one-quarter mile from toxic waste sites have an 
increased risk of birth defects, including heart defects. Many 
Superfund sites are located in urban areas, are accessible to children, 
and expose people to dangerous contamination. Others are located in our 
rivers and water bodies, where they pose a risk to the environment and 
to people who eat the fish from such waters. Furthermore, people are 
moving into contaminated areas where officials did not contemplate 
communities 20 years ago. This occurs in urban settings, where old 
industrial parks become new condominiums, and rural areas where sprawl 
spreads into regions impacted by past mining activities.

  III. SUPERFUND HAS STEADILY INCREASE THE PACE OF CLEANUPS UNTIL 2001

    Superfund had steadily increased the pace of cleanups until 2001. 
In its early years, Superfund got off to a slow start, due in part to 
mismanagement and the difficulty of creating a new national program to 
clean up the nation's worst toxic waste sites. From 1980 to 1990, 
Superfund cleaned up an average of only 6 sites per year. In 1989, EPA 
initiated its ``enforcement first'' policy, where EPA would undertake a 
thorough search for all of the PRPs at a site, and then issue a 
unilateral administrative order directing them to clean up their 
contamination. If the PRPs disobeyed the order or negotiated with EPA 
in bad faith, then the agency would cleanup the site and charge the 
PRPs up to three times the cleanup costs, plus penalties. This policy, 
the success of which is predicated upon EPA having adequate resources 
to conduct cleanups, helped dramatically increase the pace of the 
program, from cleaning up an average of 6 sites per year to an average 
of 70 per year, from 1991 to 1995. In 1995, EPA undertook a series of 
reforms and made good use of available funding to increase the pace of 
cleanups to an average of 86 per year, from 1996 to 2000. However, the 
pace of cleanups has dramatically declined to an average of 42 cleanups 
per year, from 2001 to 2003 (2002 and 2003 are estimated).

1. The Bush Administration's Response Inadequately Describes The Cause 
        of This Slowdown
    The Bush administration's response has been to deny that any sites 
have been affected, claim that the program is now cleaning up more 
mega-sites than previously envisioned, and oppose any reauthorization 
of Superfund's polluters-pay taxes unless the program is ``reformed'', 
a term often associated with weakening the program's protections.

            A. The Bush Administration's Denial Of A Problem Is 
                    Unconvincing
    U.S. PIRG doubts the administration's response that no sites have 
been affected by a lack of funding. For example, on February 24, 2002, 
the New York Times quoted EPA's head of the Superfund program for 
Region 6 as saying that he did not have adequate funds to move forward 
on five cleanups. Waste News flagged one of these sites as the Delatte 
Metals site in Ponchatoula, La., back in November 2001. On March 13, 
2002, The Post and Courier quoted an EPA Regional Project Manager as 
saying that he did not have adequate funding to move forward with a 
cleanup in South Carolina. Then, on March 22, 2002, ABC News 
highlighted a site in New Jersey that EPA could not clean up due to a 
lack of funding. Clearly, Superfund's ability to clean up sites has 
been affected by a lack of funding.

1. The Bush Administration Has Avoided Giving The Public Information 
        About Affected Sites
    During the week of February 25, 2002, U.S. PIRG called EPA 
personnel in every region to ask which sites were affected by a lack of 
funds. At first, EPA officials were forthcoming, and said that they 
would give me the information. However, when I later called back to 
followup with some offices and got around to calling other offices, EPA 
personnel told me that EPA headquarters had told them that they were 
not to talk to anyone about the impact of funding onsites, and that 
they were to direct all such calls to Joe Martyak, EPA spokesperson. I 
subsequently called Mr. Martyak and asked him the same questions that I 
had posed to EPA regional officials. While he stated that he would get 
back to me, after I called several times to followup, Mr. Martyak never 
called me back. Similarly, in early March, I received a call from the 
staff of Marianne Lamont Horinko, who asked me to describe the specific 
information that I wanted. I conveyed this information but, after I 
called a number time to followup, her staff never contacted me with the 
information.

            B. EPA's Data And Common Sense Contradict The 
                    Administration's Claims
    U.S. PIRG also doubts the administration's claims that the slowdown 
in cleanups is a result of the program unexpectedly cleaning up more 
mega-sites than earlier in the program. The pace of cleanups has 
declined by over 50 percent in less than 2 years. From 1996 to 2000, 
the program cleaned up an average of 86 sites per year. Now, only 2 
years later, the program is slated to clean up 40 sites. The average 
Superfund site takes about 9 to 12 years to clean up. Therefore, the 
types of sites in the pipeline would not change so dramatically in such 
a short amount of time.
    However, a 2001 report by Resources for the Future predicted that 
Superfund might list a higher percentage of complex sites, but not 
necessarily mega-sites, in the future. However, it will be years before 
future listing begin to impact rates of cleanups. Therefore, unless EPA 
vastly underestimated the number of mega-sites in the program, and upon 
discovering the increased number of sites EPA decided to shift 
substantial resources to cleaning them up, rather than remediating 
sites that were almost at the construction complete stage, new mega-
sites should not impact sites at the end of Superfund's pipeline.
    Further, EPA predicted in 2000 that it would clean up 900 sites by 
2002 based on timely and accurate data derived from decades of 
experience cleaning up sites. In less than 2 years, it is clear that 
the Bush administration will miss this target by over 50 sites. For 
example, the administration missed its projected cleanup target of 75 
sites in 2000, by only cleaning up 47 sites. The administration also 
revised its initial cleanup target of 65 sites for 2002, to only 40 
sites.

            C. The Administration's Under Funding Of The Program 
                    Provides A Far More Plausible Explanation
    The administration has under funded the Superfund program by at 
least $1 to $1.4 billion from 2001 to 2003. This under funding provides 
a far more plausible explanation than a dramatic and unexpected 
transformation of the types of sites cleaned up by Superfund in less 
than 2 years. If the administration does not give Superfund adequate 
resources, then the program cannot protect public health and 
environmental quality from the nation's most heavily contaminated toxic 
waste sites.

2. A Weakened Superfund Program Threatens Protection Under Other 
        Federal And State Cleanup Programs
    The success of other Federal and state programs heavily depends on 
the Federal Superfund program providing a credible deterrent against 
polluters who refuse to clean up sites under state programs. For 
example, politically powerful polluters may negotiate in bad faith with 
state clean up officials over how to conduct cleanups. With an 
effective Superfund program, the state officials can threaten to 
request that EPA clean up these sites using Superfund. This threat 
makes polluters negotiate in good faith with state officials.
    However, Superfund is only a credible deterrent if the program has 
money to conduct cleanups, since EPA must spend money on a cleanup 
before it can sue a polluter. For example, EPA can use its Superfund 
authority to order a polluter to clean up its contamination. If the 
polluter refuses to comply with the order, EPA can spend money--if it 
has funds--to clean up the contamination. Thereafter, EPA can sue the 
polluter for up to three times the cleanup costs plus penalties. 
However, if EPA does not have the money to conduct clean up activities, 
the agency cannot sue the polluter to recover costs.
    Federal cleanup officials in other programs also rely on Superfund 
to provide a deterrent effect on polluters. Fro example, the Resource 
Conservation and Recovery Act's Corrective Action Program uses the 
threat of a Superfund listing to spur intransigent facilities to clean 
up their contamination. Therefore, a crippled Superfund program will 
have a cascading effect that debilitates other Federal clean up 
programs.
    Data on state programs also demonstrates that numerous states lack 
adequate financial resources for, and assurances of public 
participation in, cleaning up hazardous waste sites. A well-funded 
Superfund program provides a vital Federal safety net that can protect 
public health when states do not have the technical ability or 
financial means to protect communities from toxic waste sites. State 
officials openly acknowledge that their programs need Superfund's 
financial assistance, technical support, and program guidance. 
Therefore, reducing the effectiveness of Superfund adversely affects 
the ability of state programs to clean up contaminated sites.

3. The Bush Administration Should Tell The Public Which Sites May Be 
        Affected
    The Bush administration should tell the public which sites will or 
may be impacted by a lack of funding. The public has a right-to-know if 
Superfund sites in their communities may sit idle or if EPA intends to 
decrease the amount of oversight given to PRP clean up activities. 
People who have lived with the dread of a toxic waste site in their 
midst deserve no less than complete openness from this administration, 
which thus far has been lacking.

                  IV. SUPERFUND'S SURPLUS IS DWINDLING

    Superfund's surplus, which has fueled the program's success in 
getting sites cleaned up since 1995, is disappearing. From a high of 
$3.6 billion in 1995, the last year that the Federal Government 
collected Superfund's polluters-pay taxes, the amount of money in the 
fund has steadily declined: the surplus was $860 million in 2001, $427 
million in 2002, and will shirk to an expected $28 million in 2003. A 
large surplus is critical because it allows the administration to 
request and Congress to appropriate increased funds to ensure the 
program in protecting public health.
    Without a surplus, the Bush administration has essentially three 
funding choices. First, they can take an increasing amount of money 
from taxpayers, which could jeopardize protections under other programs 
paid for with discretionary funds, such as drinking water and clean air 
act programs. The administration can continue making taxpayers pay the 
already exorbitant amount of $700 million per year, turning Superfund's 
polluter pays principle on its head and slash the pace of cleanups even 
further. Alternatively, the administration can work to reauthorize 
Superfund's polluters-pay taxes and maintain Superfund's record of 
success.
    Thus far, the Bush administration's response is to disavow the 
founding principle of the Superfund, that polluters--not innocent 
taxpayers--should pay to fund cleanups when EPA cannot locate polluters 
or when polluters refuse or do not have the funds to conduct clean up 
activities. This principle is largely responsible for the programs past 
success in cleaning up toxic waste sites. By eschewing the most direct, 
efficient, and common-sense approach to funding cleanups, the 
administration is needlessly jeopardizing Superfund's ability to clean 
up toxic waste sites.

1. The Bush Administration Can Easily Solve This Problem
    The solution to this problem is rather simple. The Bush 
administration should support reauthorization of Superfund's crude oil, 
chemical feed stock, and the corporate environmental income taxes. 
Former Presidents Reagan, George H.W. Bush, and Clinton all collected 
and supported reauthorization of Superfund's polluter pays taxes. The 
taxes expired in 1995, and thereafter President Clinton urged their 
reauthorization. The Congress refused to work with President Clinton to 
reauthorize the taxes, demanding that the program first show results.
    However, there is a new administration in the White House that can 
work more closely than its predecessor with the House. The Senate is 
more likely to support reauthorization if it ensures the program 
continues to clean up sites. Also, Supefund has demonstrated it can 
quickly clean up sites.
    Failure to reauthorize the taxes continues a taxpayer-subsidized 
holiday for polluting industries. Since these taxes expired in 1995, 
polluters have enjoyed a $4 million a day tax holiday, totaling over 
$10 billion. Instead, the Bush administration has taken increasing 
amount of taxpayer money to fund the program: $634 million in 2001, 
$635 million in 2002, and a projected $700 million in 2003. This means 
that taxpayers, who paid about 18 percent of Superfund's costs in 1995, 
will pay 54 percent in 2003.
    If reauthorized, these taxes will once again provide Superfund with 
the resources to protect communities across the Nation by cleaning up 
toxic wastes sites and conducting appropriate oversight activities. It 
will ensure that Superfund continues to provide other Federal and state 
cleanup programs with an unspoken, yet credible deterrent that those 
programs use to make intransigent polluters clean up their mess. 
Reauthorizing the taxes can also put back into place important 
disincentives on the use of products and undertaking of activities that 
create toxic wastes sites. Using taxes to leverage market forces for 
promoting good behavior and deterring bad behavior is good policy, and 
makes good economic sense.

2. The Bush Administration Is Threatening To Weaken Superfund's 
        Protections
    Rather than embracing these common-sense solutions, the Bush 
administration appears to be dragging this Nation back to a time when 
battles raged between industries that wanted to weaken Superfund and 
people who wanted to preserve its protections. The administration has 
stated that it opposes reauthorizing any of Superfund's polluter-pays 
taxes unless Superfund is ``reformed''. This statement sounds similar 
to industry's call to weaken the program by gutting its liability and 
clean up standards and natural resource damages provisions.

            A. Superfund Has Undergone Over 30 Reforms In 8 Years
    The administration's statement ignores the over 30 reforms 
implemented administratively and legislatively--including some of the 
more sweeping reforms that members on this committee drafted in 2000 
and 2001, and which this administration signed into law at the 
beginning of 2002--over the last 8 years. Under the Small Business 
Liability Relief and Brownfields Revitalization Act, Congress reformed 
Superfund to reduce liability for small parties (including small 
businesses and developers), protected people and small businesses from 
being sued by big polluters, exempt developers of brownfields and 
landowners who unknowingly purchased contaminated property from 
liability, and expedited settlements for polluters, among other 
reforms. In other legislation, Congress has protected financial 
institutions and legitimate recyclers from Superfund liability.
    Further, EPA has initiated three rounds of reform since 1995 that 
have transformed many aspects of the program. EPA has reformed 
Superfund's enforcement program to reduce litigation and expedite 
settlements. This includes EPA agreeing to pay 25 percent of the 
response costs at a site, if this does not exceed the orphan share 
amount, or the total past and future oversight costs, if the polluter 
agrees to conduct clean up operations. EPA has also reformed 
Superfund's clean up process, to expedite the pace of cleanups and 
reduce litigation. This includes EPA decreasing costs by treating only 
``principle threats'', using institutional controls, and heavily 
increasing the use of natural attention. Further, EPA has streamlined 
the clean up process by reducing oversight and designating one state or 
Federal agency as the ``lead agency'' to oversee clean up work at the 
site. EPA also uses a ``risk-based'' priority setting process, where 
the agency reviews and compares public health and ecological risks, 
stability and toxicity of contaminants, and economic, social, and 
program management considerations when deciding to list sites under 
Superfund. (Please note that U.S. PIRG does not necessarily endorse 
these reforms, including EPA's interpretation and implementation of its 
``principle threats'' policy.)

            B. The General Accounting Office Has Recognized That 
                    Superfund is Reformed
    In 2001, the General Accounting Office (``GAO'') removed Superfund 
from its list of ``high priority'' sites for waste and mismanagement. 
The GAO had originally put Superfund on this list in 1990 because the 
GAO did not believe that EPA was correctly prioritizing cleanups, 
recovering appropriate amounts of money from PRPs, and effective 
controlling contractor costs. However, in January 2001, the GAO stated, 
``Because of the progress that [EPA] has made in addressing the 
management problems we have identified [] we are removing our 
designation of high risk for the Superfund program.'' GAO, High Risk 
Series: An Update, 17 (2001).

            C. The Administration Has Called For Reforms That The 
                    Administration Already Signed Into Law
    The Bush administration has already given some examples of reforms 
that it desires. For example, the administration has stated that 
Superfund must be reformed because ``it has become a haven for 
lawyers.'' However, this administration has already signed into law 
substantial reforms that expedite the settlement process and reduce 
settlement amounts, protect small parties from being sued by big 
polluters, and eliminate liability for contributing small amounts 
hazardous and solid waste, among other provision. If further reforms 
are undertaken, they will likely only benefit big, corporate polluters 
who often sued small parties in contribution claims, in an effort to 
discredit the program as one that hurt the ``little guy''.

3. By Making Polluters Pay, The Administration Can Protect Public 
        Health
    The administration's call for ``reform'' presents a false choice 
between maintaining Superfund's protections for public health and 
environmental quality (while losing the financial capability to 
vigorously enforce such protections) or reauthorizing Superfund's 
polluter pays taxes to fund a substantially weakened Superfund program. 
The public should not have to choose between maintaining protections 
without funding or making polluters pay their taxes while weakening 
clean up and liability standards. Indeed, U.S. PIRG believes that the 
Federal Government can and should maintain all existing protections 
while reauthorizing Superfund's taxes. This would also ensure that 
Superfund has adequate resources to pay for cleanups, which would 
maintain the trust and certainty between states and EPA that has 
developed over the years on clean up issues. It would also create 
disincentives for the use of products and undertaking of activities 
that are environmentally harmful, while also increasing funds for 
programs that protect public health and environmental quality.

     V. EPA SHOULD BE WARY OF REFORMS THAT MAY INCREASE COSTS AND 
                           WEAKEN PROTECTIONS

    There are a number of reports that EPA is considering various 
reforms to Superfund that may ultimately cost the program more money 
that it saves, and which may weaken protections for public health, 
environmental quality, and public participation in the clean up 
process. For example, EPA may consider creating a new administrative 
program for mining and contaminated sediment sites, a waiver of 
liability in conjunction with insurance policies that provide a finite 
amount of long-term funding, and consent decrees that may usurp 
Superfund's Congressional mandated prioritization process for cleaning 
up toxic waste sites. Rather than attempting to get around Superfund's 
process for cleaning up sites and making polluters pay, EPA should work 
to vigorously apply these tools at these sites. This would maintain an 
equal level of protection for communities who live near or on Superfund 
sites, while ensuring that EPA does not send the wrong signal by 
weakening Superfund's liability provisions and clean up standards for 
polluters who create the biggest problems.

1. A New Administrative Program Could Weaken Protections
    EPA may be considering the creation of a new administrative program 
for contaminated sediment sites and mining sites. While the contours of 
this program are not yet clear, the potential ramifications of this 
action are disturbing. For example, at contaminated sediment sites, EPA 
may choose to create a new program that does not have apply Superfund's 
liability or clean up standards. It is conceivable that such this 
administration may chose to emphasize cooperative and voluntary clean 
up agreements with polluters under such a program. Further, it may also 
choose to grants waivers of liability for participating in the 
voluntary program. In these instances, if clean up costs are greater 
than expected, taxpayers could ultimately pay to clean up these large 
mega-sites. Further, since many of these agreements would like be 
negotiated between EPA and the polluters, the public may lose 
Superfund's provisions that ensure the local community has the ability 
to affect the clean up plans.
    If the agency is concerned about big polluters dragging small 
parties into litigation at contaminated sediments sites, then the 
agency should use its recently enacted authority to exempt small 
parties from such litigation. If the agency is concerned about PRPs 
absconding with assets oversees, then the agency should use existing 
law to put a stop to such practices. If the agency is concerned about 
the large number of bankrupt PRPs at mining sites, then as a true 
advocate for the program, it should push for increased funding, paid 
for by polluting industries associated with the activities and products 
that cause toxic waste sites.

2. EPA's Use Of Insurance Policies And Liability Waivers At Mining 
        Sites Could Leave Taxpayers Paying For Perpetual Clean Up 
        Activities
    In October 2000, EPA agreed to let Aventis CropSciences USA 
(Aventis) invest a sum of money with an insurance company to pay for 
clean up and operation and maintenance activities at the Iron Mountain 
Mine Superfund site, rather than paying for the upfront costs of the 
cleanup. Aventis agreed to pay $164 million AIG insurance company $80 
million to invest, and which AIG expects will provide funding in the 
hundreds of millions of dollars over the next 30 years. Aventis also 
gave AIG a $64 million balloon payment, which AIG expects will provide 
$514 million for operation and maintenance costs beginning in 2030. 
Aventis also paid EPA $8 million and the trustees $10 million. In 
return, EPA released Aventis from liability for future costs overruns 
and waived $150 million in past costs. Aventis will only be liable if 
there is a shortfall in expected returns.
    There is nothing intrinsically inappropriate with allowing PRPs to 
give insurance companies money to invest, and which EPA, states, or 
PRPs can later use for costs associated with a cleanup. However, a PRP 
already derives a tremendous benefit from such an agreement, since the 
party only pays a percentage of the actual expected costs. There is no 
reason for EPA to sweeten the pot by eliminating the polluter's 
liability and transferring it to innocent taxpayers or, assuming 
Superfund's polluters-pays taxes are reauthorized, using trust fund 
resources that should go to clean up sites where EPA cannot locate any 
PRPs or polluters refuses to clean up their contamination.
    EPA should allow the funding mechanism, but not waive future 
liability. The financial markets and corporate America have been rocked 
by too many scandals. Insurance companies can over commit their 
resources to one particular industry or geographic region. In these 
instances, a crash in the price of a commodity or an earthquake or 
hurricane can seriously undermine an insurance company's financial 
stability. Alternatively, insurance companies can get caught in 
reinsurance schemes, where the bankruptcy of one institution can weaken 
many others. This combined with the fact that acid mine drainage can 
get worse over time and may require perpetual treatment means that 
taxpayers may have to pay for the costly and perpetual treatment of 
mining sites that use this funding scheme. EPA should not willfully 
strap taxpayers with the potentially huge cost burdens associated with 
these types of sites by waiving a polluter's liability.

3. EPA Should Not Enter Into Consent Decrees And Use NPL-Caliber 
        Designations That Weaken Protections
    EPA recently entered into a consent decree with Monsanto and 
Solutia that could seriously undercut local citizens' efforts to make 
these PRPs clean up PCB contamination in Anniston, AL. It may also 
usurp Congress's prioritization scheme embodied in the National 
Priorities List. EPA should try to avoid both of these results.
    After years of inaction by state clean up officials, EPA 
appropriately stepped in to oversee future clean up operations in 
Anniston. However, EPA chose to file a consent decree that may 
jeopardize a suit brought by citizens against Monsanto and Solutia. 
Citizens in Anniston were successfully prosecuting a suit seeking 
compensation for health and environmental damage left behind by the 
company's production of PCBs. As part of the damages phase of this 
suit, the citizens could have asked for a variety of remedies that 
would have addressed community concerns about irregularities and 
inadequacies of past testing, the establishment of a community health 
center, and clean up of the site under the protections afforded by the 
Superfund program. Instead, EPA's consent decree may actually provide 
Monsanto/Solutia with an opportunity to argue that the citizens have no 
right to many of these remedies.
    This type of consent decree could be used to frustrate common law 
claims brought by citizens against polluters at other sites. EPA should 
take some common sense steps to ensure this does not occur. First, EPA 
should always act to expeditiously protect public health. However, 
where citizens are pursuing a private cause of action that could result 
in a desired cleanup, and EPA retains the right to order a future clean 
up if the initial work is inadequate, then the agency should consider 
allowing the community's litigation to run its course. Alternatively, 
the agency should, at a minimum, work with the affected community to 
ensure that their concerns are addressed in any consent decree.
    Thank you very much for the opportunity to present testimony on 
these important issues.

                                 ______
                                 
            Responses by Grant Cope to Additional Questions

    Question 1. Please provide supporting information for the statement 
in your testimony that ``the administration has under funded the 
Superfund program by $1 to $1.4 billion from 2001 to 2003.''
    Response. I derived these figures from comparing actual (2001 and 
2002) and projected (2003) amounts that the budget authorized for the 
Superfund program, against Resources For the Future's ``baseline'' and 
``high'' estimates of the program's financial needs for the same time 
period. RFF's estimates are contained in the book, Superfund's Future: 
What Will It Cost?

    Question 2. Did all of the companies that paid the four Superfund 
taxes ``pollute''? Are they all directly responsible for Superfund 
sites?
    Response. Conservatives and liberals alike both agree that taxes 
can be an exemplary tool for creating disincentives or incentives for 
particular activities that benefit or harm society. To this end,
    Congress structured Superfund's polluter pays taxes to focus on 
those polluting activities, corporations, and products that are closely 
associated with contamination at toxic waste sites. These taxes create 
a disincentive on the use of products or undertaking of activities that 
are associated with the creation of future toxic waste sites. They also 
shift the market to the use of more environmentally safe alternatives, 
while potentially saving society money on future cleanups, reducing 
incidents of adverse health effects, and creating new industries and 
products that benefit economic growth and the environment.
    Congress created three polluter-pays taxes: (1) Chemical Feedstock 
Tax; (2) Petroleum Tax; and (3) Corporate Environmental Income Tax.
    Chemical Feedstock Tax.--Congress created Superfund's Chemical 
Feedstock Tax by surveying the types of chemicals that often appeared 
at toxic waste sites, and then taxing those chemicals, or their 
precursors, to create a disincentive for the use of those chemicals. 
Specifically, Congress taxed the purchase of 42 toxic chemicals 
associated with dangerous substances at toxic waste sites. The amount 
of tax ranged from $0.22 to $4.87 per ton, except xylene, which was 
taxed at $10.13 per ton. Also, this tax exempted certain chemicals when 
used for certain purposes (e.g. methane and butane when used for fuel) 
or when produced in certain ways (e.g. any listed chemicals derived 
from coal).
    If Congress reauthorized Superfund's polluter pays taxes, it would 
apply to chemicals found in 13 out of the 20 most dangerous substances 
at Superfund sites. The Federal Government has already banned six other 
chemicals found in the 20 most dangerous substances at Superfund sites. 
These facts demonstrate that reauthorization of Superfund's polluter 
pays taxes would create disincentives for the use of dangerous products 
that are associated with the creation of the nation's worst toxic waste 
sites.
    Petroleum Tax.--Congress created Superfund's Petroleum Tax through 
a political compromise. The oil industry is one of the most polluting 
industries on the planet. Each year, there are at least 14,000 oil 
spills in the United States. The oil industry got exempted from 
liability for most types of oil contamination at Superfund sites, and 
in return Congress places a moderate tax on the purchase of oil (9.7 
cent per barrel). Since the tax expired, oil companies have little 
liability for their contamination, and polluting industries that use 
oil have enjoyed a tax holiday.
    Corporate Environmental Income Tax.--Congress created the Corporate 
Environmental Income Tax to shift costs on some large corporations that 
earned over $2 million a year. Specifically, Congress created taxes at 
a rate of 0.12 percent on taxable profits in excess of $2,000,000. If 
Congress reauthorized this tax, corporations in the manufacturing 
industrial sector (e.g. chemical and allied products, petroleum and 
coal products, electrical and electronic equipment) and mining sectors 
would pay about 41 percent of the tax. Similarly, these sectors are 
responsible for about 43 percent of all Superfund sites.
    Superfund's polluter pays taxes expired in 1995. Since then, 
polluters have enjoyed a $4 million a day tax holiday, totaling $10 
billion. Superfund's reserves have dwindled from a high of $3.6 
billion, to an expected $28 million in 2003. EPA uses these reserves, 
as requested by the President and appropriated by Congress, to clean up 
contamination when polluters refuse to clean up their contamination, 
are bankrupt or cannot be located.
    Without these funds, taxpayers--not polluting industries and 
activities--will pay an increasing amount to cleanup the nation's worst 
toxic waste sites. This means, rather than spending money on 
maintaining or increasing protections for clean air or drinking water, 
or ensuring the long-term financial stability of our nation's Social 
Security Trust Fund or Medicare programs, the government will use this 
money to subsidize a tax holiday for polluters. At the same time, the 
government is failing to use the market to apply accepted methods of 
creating disincentives for activities that harm public health and 
which, conversely, create incentives for the use of safer alternatives.

                               __________

     Statement of Michael W. Steinberg on Behalf of the Superfund 
                          Settlements Project

                           EXECUTIVE SUMMARY

    Status of Superfund Program.--Superfund today is a mature program 
that has largely accomplished its goals. Private parties are cleaning 
up most of the sites on the NPL and paying the full cost of those 
cleanups. Superfund has also addressed most of its original workload; 
construction of the remedy has already been completed at most of the 
sites on the NPL.
    Pace of Cleanups.--Ironically, Superfund's accomplishments have 
given rise to a concern that cleanups may be slowing down. But cleanups 
are not slowing down. Instead, Superfund is working on the remaining 
sites, which include some of the largest, most complex, and most 
challenging NPL sites. For example, construction has been completed at 
roughly 75 percent of the non-Federal NPL sites, but at just 20 percent 
of the Federal facility NPL sites. Selecting, designing, and 
constructing remedies at these Federal facility sites takes longer for 
a variety of reasons, including the technical challenges they pose.
    The NPL Should Become the Tool of Last Resort.--Looking ahead, we 
confront many thousands of sites perceived to be impacted by 
contamination, most of which either are being addressed by increasingly 
robust State programs or else pose no immediate risk to human health or 
the environment. There is no reason to ``make a Federal case'' out of 
these sites. Instead, NPL listing should be the tool of last resort, 
reserved for sites that:
    (1) are severely contaminated;
    (2) pose severe risks; and
    (3) have no near-term prospect of cleanup by responsible private 
parties.
    Most Large Mining Sites and Sediment Sites Do Not Belong on the 
NPL.--These two types of sites differ greatly from the type of site 
that the Superfund process was designed to handle. To date, there has 
been no Congressional or societal debate about whether the Superfund 
program--or indeed any other Federal program--should attempt to handle 
these extremely large and complex sites, which may prove to be so 
costly that the risks and benefits involved would not warrant such 
expenditures.
    Removal Actions Should Be Limited to ``Emergencies.''--EPA spends 
about $250 MM/yr on removal actions, 75 percent of which do not involve 
``emergencies'' of any kind. The removal program should be refocused to 
its original purpose.

                              Introduction

    The Superfund Settlements Project appreciates the opportunity to 
share with the Subcommittee some perspectives on the status and future 
of the modern Superfund program. The Superfund Settlements Project is a 
not-for-profit association of nine major companies from various sectors 
of American industry.\1\ It was organized in 1987 in order to help 
improve the effectiveness of the Superfund program by encouraging 
settlements, streamlining the settlement process, and reducing 
transaction costs for all concerned.
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    \1\ The current members of the Superfund Settlements Project are 
Ciba Specialty Chemicals Corporation, E.I. duPont de Nemours & Co., 
Inc., [CHECK SPELLING!!] General Electric Company, General Motors 
Corporation, Honeywell International Inc., IBM Corporation, Solutia 
Inc., United Technologies Corporation, and Waste Management, Inc.
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    The members of the Superfund Settlements Project share an 
extraordinary degree of practical, hands-on experience with the 
Superfund program. These companies have been involved at hundreds of 
Superfund sites across the country over the last 20 years. 
Representatives of the Superfund Settlements Project have testified 
before Congress on numerous occasions regarding various aspects of the 
Superfund program. The Superfund Settlements Project has also played an 
active leadership role in the national policy debate over many 
Superfund issues, and has been a strong supporter of EPA's Superfund 
Administrative Reforms since they were first announced in 1995.\2\
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    \2\ In addition, members of the Superfund Settlements Project are 
also active members of other organizations analyzing the Superfund 
program, including the Superfund Action Alliance, the American 
Chemistry Council, the Business Roundtable, and the National 
Association of Manufacturers.
---------------------------------------------------------------------------
    Collectively, these nine companies have paid out well over two 
billion dollars in site cleanup and site study costs since 1980. They 
have also paid out hundreds of millions of dollars more in dedicated 
Federal Superfund taxes paid during the first 15 years of the program's 
life. These payments far exceed any fair or equitable measure of their 
responsibility for the contamination at these sites.
    The Superfund Settlements Project regards Superfund as a mature 
program that has largely accomplished its goals (albeit at a cost that 
was not always justified by the risks being addressed). The gaps in 
environmental regulatory programs that led to the creation of many 
Superfund sites have been filled. Today, private parties are cleaning 
up most of the sites on the National Priorities List (``NPL''), and 
they are paying the full cost of those cleanups. The Superfund Trust 
Fund is paying for cleanups at the ``orphan'' sites where no 
responsible party exists.\3\
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    \3\ This includes ``orphan'' sites where the responsible party is 
insolvent, or has been exempted from liability by Congress. The Trust 
Fund is also paying for general informational and outreach programs 
such as technical assistance to community groups, research and 
development, remedial and brownfields policy development, and public 
participation.
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    Superfund has also largely addressed its original workload. 
Significantly, construction of the remedy has already been completed at 
most of the sites on the NPL. Ironically, this progress has given rise 
to a concern that cleanups may be slowing down. But cleanups are not 
slowing down. Instead, Superfund is working on the remaining sites, 
which include some of the largest, most complex, and most challenging 
NPL sites.
    For example, construction has been completed at roughly 75 percent 
of the non-Federal NPL sites, but at just 20 percent of the Federal 
facility NPL sites. Selecting, designing, and constructing remedies at 
these sites takes longer due to the technical challenges they pose.
    In the body of this statement, we address several key aspects of 
the Superfund program's past, present, and future. First, we describe 
the evolving partnership between EPA and industry that has enabled the 
program to achieve successes, particularly since the announcement of 
the administrative reforms in October 1995.
    Second, we address more fully the concern about the current pace of 
cleanups. In this discussion, we explain why the number of 
``construction complete'' sites is tapering off and why this does not 
represent a slowdown in the pace of the cleanup program.
    Third, we focus on the future scope of the NPL, proposing that it 
be ``the tool of last resort,'' to be used only for sites that meet the 
relevant criteria.
    Fourth, we briefly discuss the reasons why large mining sites and 
contaminated sediment sites, in particular, typically do not belong on 
the NPL.
    Fifth, we show how, despite the passage of recent brownfields 
legislation, Superfund remains a major impediment to the goal of 
restoring contaminated sites to productive use.
    Sixth, and last, we propose refocusing the removal action program 
so that it will serve its original intended purpose--addressing 
``emergency'' threats to human health or the environment.

 I. SUPERFUND TODAY REPRESENTS A HIGHLY SUCCESSFUL PARTNERSHIP BETWEEN 
                            EPA AND INDUSTRY

    Although the Superfund program has generated extraordinary levels 
of controversy and criticism, EPA has, over time, developed 
institutional capability and expertise, solved problems, improved 
relationships, and ultimately established a program that operates 
relatively effectively and performs a critical function in society. 
Tens of thousands of contaminated sites have been evaluated, short-term 
removal actions have been taken at several thousand of those sites, 
longer term remedial actions have been completed at most of the non-
Federal sites on the National Priorities List, and construction is 
underway at most of other NPL sites, which are among the most severely 
contaminated sites.
    Superfund, a topic of intense public concern--once dominated by 
controversy and emotion--has fundamentally achieved its objectives and 
accordingly has receded in the public focus. Today a general public 
recognition exists that the actions which should be taken now are being 
taken.
    In the process and in recent years, EPA has also worked to improve 
relationships with PRPs and has minimized its previously 
confrontational approach to private parties. For the most part, there 
now exists an atmosphere of cooperation and mutual respect. EPA should 
be commended for its accomplishments in this field.
    It should also be recognized that industry has made major 
contributions to the success of this program. Perhaps unfairly, 
industry initially bore the brunt of criticism for past disposal 
practices that in essence reflected the values and scientific knowledge 
of society in an earlier era. Stung by such criticism and offended by a 
liability system that many regarded as totally unfair, much of industry 
initially protested and resisted the obligations imposed on it by the 
Superfund statute.
    By the mid to late 1980's, however, those attitudes had changed, 
and most national corporations accepted the imperative that they must 
participate constructively in addressing this national problem. At site 
after site across the country, those companies rose to the challenge. 
They organized PRP groups, established committees within those groups, 
investigated the conditions of contamination, and developed action 
proposals. Once EPA selected the remedies, those companies carried out 
remedial actions, and today they are managing long-term operation and 
maintenance at most sites. They provided the leadership, the technical 
resources, and the funding to perform required work at an ever-
increasing percentage of contaminated sites. That percentage is now 
greater than 70 percent of NPL sites.
    Welcoming the more cooperative spirit that EPA has demonstrated 
since adoption of the administrative reforms in 1995, those companies 
have themselves taken pride in the results of this program. They have 
earned the right to be regarded as constructive partners in the 
achievement of success under Superfund. They will continue to be 
constructive partners in addressing other sites through other cleanup 
programs.

     II. SUPERFUND IS MAKING RAPID PROGRESS ON CLEANING UP THE NPL

    Specifically, in the years since 1995, Superfund has achieved 
levels of operational progress and public acceptance it had never 
before experienced. Much of the credit for that improvement is 
attributable to the set of administrative reforms announced by EPA in 
October 1995, which reduced the elements of confrontation between the 
government and PRPs and achieved a number of specific improvements in 
program management. In addition, building on past experience and 
accomplishment, EPA made solid progress each year in moving sites on 
the NPL into remedial construction and bringing sites to construction 
completion.
    Today, Superfund can point to a remarkable 810 sites where 
construction of the remedy is already complete, and another 400 or so 
where construction is underway. The vast majority of these cleanups 
were conducted and paid for by private parties. What does this means in 
practical terms? It means two things.
    First, it means that the great majority of NPL sites either already 
have remedies in place, or are well on their way toward that status.
    Second, and equally important, it means that if we measure progress 
solely in terms of the number of ``construction complete'' sites 
achieved in each fiscal year, then we will see an apparent tapering off 
in the rate of progress from this point forward. There are fewer sites 
available each year for ``construction completion,'' of course, and, 
more importantly, those that remain are among the largest, most 
complex, and most challenging sites of all.
    This apparent tapering off does not represent a real-world slow-
down in the pace of cleanup. Instead, it reflects the fact that 
Superfund, having addressed most of its original workload, must now 
focus on those sites that remain. The nature of these sites makes it 
inherently more difficult--and thus more time-consuming--to select, 
design, and construct remedies.
    A good example of this phenomenon is the roughly 140 Federal 
facility NPL sites at which construction has not yet been completed. By 
far the largest and most threatening sites in the country are those 
created by the Federal Government, mainly the U.S. Department of Energy 
and the U.S. Department of Defense.\4\ Thus, Federal facilities 
comprise 13 percent of the total sites listed on the NPL, but a much 
lower percentage of the ``construction complete'' sites. Today, 
construction is complete at nearly 75 percent of the non-Federal NPL 
sites, but only 20 percent of the Federal facility NPL sites.
---------------------------------------------------------------------------
    \4\ Superfund policy debate tends to focus on the sites associated 
with private industry, especially because Superfund dollars are not 
used to clean up the federally owned DOD or DOE sites. But in 
evaluating both problems and successes, we should not forget the huge 
involvement by government on both sides of this program.
---------------------------------------------------------------------------
    Many of these Federal facility NPL sites are particularly 
challenging to remediate for one or more of the following reasons:
    (1) they are very large, sometimes extremely large;
    (2) they contain numerous distinct operable units;
    (3) they have ongoing public missions that cannot easily be 
disrupted by site study or cleanup activities; and
    (4) they are remediated with funds from the DOD or DOE budgets.
    These unique features of Federal facility NPL sites help explain 
why only 20 percent of them have reached the ``construction complete'' 
stage to date. It also explains why, going forward, these sites will 
not reach that stage as quickly as many of the non-Federal NPL sites 
addressed in earlier years.
    In sum, Superfund has made remarkable progress in cleaning up the 
NPL. The sites that remain will likely take somewhat longer to complete 
than the sites already completed. This should be viewed as an indicator 
of progress made, not as a sign that the pace of cleanup, or the 
commitment to cleanup, is waning.

   III. THE NPL SHOULD BE ``THE TOOL OF LAST RESORT'' FOR ADDRESSING 
                           CONTAMINATED SITES

    Based on 20 years' worth of experience with Superfund, it is also 
timely to reconsider the purpose and scope of the NPL itself. Indeed, 
this is one of the specific recommendations made by Resources for the 
Future in its July 2001 report to Congress. In response to that 
recommendation, EPA has already taken steps to convene a broad-based 
dialog on this subject, with a new NACEPT subcommittee likely to begin 
meeting in the very near future.
    In thinking about the purpose and scope of the NPL, it is helpful 
to bear in mind the lessons learned during the past 20 years in three 
main areas:
    (1) the universe of contaminated sites;
    (2) the alternatives available for addressing those sites; and
    (3) the strengths and weaknesses of the Superfund program.
    We address each of these points below, before presenting our 
specific proposal on the future role of the NPL.
    First, experience has dramatically changed our knowledge about the 
number and character of contaminated sites throughout the country, as 
well as the risks associated with them. Rather than having only a few 
hundred of sites, each of which was initially believed to pose severe 
threats to public health, it now is clear that we have a great many 
contaminated sites, most of which pose relatively small risks. For 
example, one EPA count of potential Brownfield sites indicated over 
600,000 sites perceived to be impacted by contamination, the great 
majority of which either are being addressed through State programs or 
pose no severe or immediate risk to human health or to the environment. 
These factors mean that contaminated sites should be managed by 
leveraging all appropriate private and public resources. The framework 
for response should emphasize state, local, and private efforts, rather 
than ``making a Federal case'' out of each site.
    Second, the choices available to society to address contaminated 
sites are far greater today than the situation that existed when 
Superfund was enacted in 1980. Virtually all states have developed 
strong regulatory programs to control such sites. Most states also have 
developed their own ``mini-Superfund'' programs and voluntary cleanup 
programs that have achieved success. In addition, at the Federal level, 
EPA's RCRA corrective action program now governs operating facilities, 
and another program (UST) covers underground storage tanks.
    Third, Superfund's strengths and weaknesses as a cleanup program 
can now be seen far more clearly with the benefit of 20 years' worth of 
experience. As to its strengths, Superfund has focused attention on the 
need to remediate sites contaminated as a result of the inadequacies of 
pre-1980 disposal requirements. It has galvanized cleanup efforts, and 
it has achieved cleanups at most of the nearly 1,500 sites listed on 
the NPL. Superfund has also performed thousands of successful removal 
actions, most of them at non-NPL sites.
    As to its weaknesses, Superfund has attached a lasting stigma to 
those sites and to some of the communities that surround them. In many 
cases, Superfund has also imposed excessive operational, legal, and 
financial restrictions on these sites that will interfere with their 
future reuse or redevelopment. Moreover, the cost at which Superfund 
has achieved results--over $30 billion in EPA appropriations alone 
since 1980, and at least $30 billion more in private sector spending--
is widely viewed as far higher than necessary or justified in light of 
the risks being addressed.
    In hindsight, at least, it seems clear that many of the sites 
addressed under Superfund never presented major risks to human health 
or the environment.\5\ Instead, sites were listed or targeted based on 
fairly crude assessments of their potential threats. Once a site is 
listed or targeted under Superfund, however, the focus shifts from 
potential risk to ``cleanup.'' Instead of focusing on risk reduction, 
where the program has actually achieved dramatic results, Superfund has 
tended to focus on ``cleanup,'' where progress is much slower and 
closure is maddeningly elusive. Ironically, this focus on ``cleanup'' 
often delays or limits the reduction of risk that should be Superfund's 
principal objective.
---------------------------------------------------------------------------
    \5\ See, e.g., U.S. General Accounting Office, Environmental 
Protection--Meeting Public Expectations With Limited Resources 17-18 
(1991) (GAO/RCED-91-97) (risks from contaminated sites ranked 
relatively low by EPA scientists, but relatively high by the public).
---------------------------------------------------------------------------
    In light of this experience, it is clear that the Superfund NPL 
must be regarded as just one tool among many to address the full range 
of contaminated sites. In fact, the NPL should be the tool of last 
resort--a tool that because of its unique nature should only be used in 
those rare situations that require such a high-cost, inefficient 
mechanism. EPA itself adopted this term--``the tool of last resort''--
as its unofficial policy some years ago, but EPA has failed to change 
its actual decisionmaking in any concrete way to reflect this policy.
    The special circumstances that might warrant use of the Superfund 
NPL as ``the tool of last resort'' might include sites that:
    (1) are severely contaminated;
    (2) pose immediate or severe risks; and
    (3) have no near-term prospect of cleanup by responsible private 
parties.
    Some so-called ``mega sites,'' such as large mining sites and 
sediment sites, might meet these criteria, but not simply because of 
their size. Many, perhaps most, ``mega sites'' simply do not belong on 
the NPL. In fact, their very complexity and potential huge cost make 
them presumptively unsuited for NPL listing, as we discuss below.
    Apart from those sites that meet the above criteria for NPL 
listing, nearly all other sites should be managed under whatever other 
programs are most appropriate for them. This would include the RCRA 
corrective action program as well as the full range of state cleanup 
programs. If those other programs are viewed as deficient in some 
respects, then they should be improved rather than shifting sites to 
Superfund and thereby removing the incentive to remedy the shortcomings 
of those programs.
    It is fully expected that private industry will continue to perform 
and fund cleanups, either individually or in conjunction with 
regulatory agencies, at sites they have contaminated. The point here is 
simply that Superfund is not the proper mechanism to address these 
sites.
    The implementation of this ``tool of last resort'' approach would 
require only modest changes to current EPA policy and practice. EPA 
should continue to treat the Superfund NPL the tool of last resort. To 
that end, EPA should identify in each new proposed NPL listing which 
other cleanup programs or approaches it has considered, why it believes 
such other programs or approaches are not suitable, and what it hopes 
to achieve through listing on the NPL. The Office of Emergency and 
Remedial Response at EPA Headquarters should carefully review these 
findings before it concurs with a proposed NPL listing. These issues 
should also be explored during the public comment period on proposed 
new NPL listings.
    Finally, it would be consistent with the above to implement this 
approach with regard to NPL delistings or deletions, not just NPL 
listings. This raises some additional complications, and careful 
thought would be needed as to practical aspects of changing the current 
criteria for NPL deletion. The core idea is that if the studies and 
cleanup work performed at an NPL site have brought it to the point 
where the remaining risk would no longer justify application of ``the 
tool of last resort,'' then EPA should find a way to remove that site 
from the NPL so it can be addressed in a more appropriate way. Whatever 
the criteria for NPL listing, it makes little sense to keep a site in 
the NPL universe once it no longer meets those criteria.

   IV. MOST LARGE MINING SITES AND MOST SEDIMENT SITES DO NOT BELONG 
                               ON THE NPL

    A special case of the NPL listing issue discussed above involves 
the large mining sites and sediment sites that make up many of what are 
now called ``mega sites'' due to the extraordinarily high cost of 
cleaning them up under Superfund. Like any other sites, they should not 
be listed on the NPL unless they meet the criteria described above. In 
addition, however, these two types of sites present some unique 
features that warrant a presumption against adding them to the NPL. We 
summarize below some of those distinctive features.
    First, these sites are very different from the type of site that 
Superfund was intended to address. Unlike abandoned disposal sites and 
drum burial sites, there has never been a public debate about whether 
large mining sites or sediment sites belong in the Superfund program. 
Nor has Congress ever indicated its view as to whether the Federal 
Government should assume responsibility for these sites or whether they 
would be properly addressed through the Superfund approach.
    Second, in the case of large mining sites, we are looking at the 
legacy of a domestic industry that has been economically devastated. 
Many large mining sites will therefore be orphan sites. Their cleanup 
costs will be staggeringly high, and those costs will be paid by the 
Trust Fund if these sites are added to the NPL. At a minimum, it would 
be fiscally prudent to explore alternative options for addressing these 
sites before seizing on the Superfund program as a vehicle for 
obtaining cleanups. It would also be appropriate to consider ways in 
which the industry responsible for creating these sites can absorb as 
large a share of the costs as possible.
    Third, in the case of sediment sites, the question of how to deal 
with contaminated sediments in rivers, harbors, and estuaries remains a 
daunting challenge.\6\ EPA is beginning to recognize that dredging is 
not the solution for all instances of contaminated sediments. 
Unfortunately, dredging remedies are being selected at certain 
locations but without any clear policy rationale as to their selection.
---------------------------------------------------------------------------
    \6\ The issue is further complicated by the fact that sediment 
sites, unlike most Superfund sites, typically involve both (1) 
continuing movement of contamination into the area being remediated and 
(2) continuing expectation of public use and/or access to the area for 
recreational or commercial purposes.
---------------------------------------------------------------------------
    The implications of starting down this path are staggering. 
Virtually every industrialized river system in this country could 
trigger remediation if overly stringent criteria were to be applied. 
However, given the limitations of existing dredging technology, these 
remedial efforts may cause more damage than allowing natural processes 
to address the contamination.
    Society presently faces the prospect of enormous disparities in 
treatment between sediment sites that are subjected to dredging action 
and those that are not. Ironically, municipalities are among the larger 
sources at many sediment sites. Along with much of private industry, 
these cities and towns will face the prospect of sharing in the extreme 
costs of dredging remedies. These potentially responsible parties will 
have little choice but to seek judicial review of these ad hoc 
remedies, and the courts should be able to hear such challenges (on an 
expedited basis, so that cleanup is not delayed).
    In sum, most large mining sites and most sediment sites 
presumptively should not be listed on the NPL.

        V. THE KEY OBJECTIVE IS TO RETURN LAND TO PRODUCTIVE USE

    In recent years, it has been increasingly recognized that a major 
objective of programs addressing contaminated sites must be to achieve 
the return of such property to productive use in society. Particularly 
in areas of historical industrial development where major sections of 
urban and metropolitan areas were long devoted to industrial 
operations, it is unacceptable to leave those properties sealed off and 
consigned to ``warehouse'' status simply because the costs of 
remediation of such areas would exceed their market value after 
remediation. The prevalence of such areas, commonly referred to as 
``brownfields,'' has driven policy debate to confront difficult 
realities of the tension between goals of restoration to original 
background purity and goals of returning land to productive use after 
effective controls have been achieved to prevent risks to health.
    During the past 5 years, increasing attention has been placed on 
returning contaminated sites to productive use. Often that has involved 
redevelopment for industrial or commercial purposes, while other sites 
have been converted to recreational use or wildlife preservation. Such 
constructive accomplishment may easily be precluded by unrealistic 
requirements as to acceptable levels of concentration that must be 
achieved before reuse will be permitted. That risk would be exacerbated 
if these sites were addressed under Superfund. The unwillingness of EPA 
and the Department of Justice to support state decisions on brownfields 
by withdrawing the threat of future Superfund action is a serious 
deterrent to many projects.
    An intensive bipartisan effort to address these problems resulted 
in the Brownfields Revitalization and Environmental Restoration Act of 
2001, Pub. L. No. 107-118, which is an important first step. But 
Superfund--particularly the fear of EPA second-guessing state cleanup 
decisions--remains an enormous obstacle to redevelopment at many 
brownfields sites around the country. EPA and the Department of Justice 
should seriously reassess their policies on waiving Superfund claims at 
sites cleaned up under state programs. Incentives also must be provided 
to owners of contaminated property, analogous to those currently 
authorized for purchasers of contaminated property, in order for the 
full potential brownfields programs to be achieved.

VI. THE REMOVAL ACTION PROGRAM SHOULD BE REFOCUSED IN ORDER TO ADDRESS 
                     ITS ORIGINAL INTENDED PURPOSE.

    The Superfund removal action program poses somewhat different 
issues. The true emergencies it was originally meant to address now 
account for only one-fourth of all removals. The other three-fourths 
consist of so-called ``time-critical'' actions, where EPA believes work 
should be commenced within a period of 6 months, and even ``non-time-
critical'' actions. For example, of the 2,440 removal actions commenced 
during the period from fiscal year 1992 through fiscal year 1999, a 
total of 1,892 (77.5 percent) were either ``time-critical'' or ``non-
time-critical'' actions.\7\
---------------------------------------------------------------------------
    \7\ Probst et al., Superfund's Future--What Will It Cost? at 25, 
Table 2-4 (2001).
---------------------------------------------------------------------------
    Many of these non-emergency actions are undoubtedly beneficial. But 
it is unclear why a continuing $250 MM/yr Federal program is needed to 
perform primarily non-emergency removal actions. Instead, Superfund 
removal actions should be limited to those contaminated sites, orphan 
or otherwise, that need immediate action to avert an actual health or 
environmental emergency.
    The idea here is not to bog down in endless debate about the 
precise contours of the term ``emergency.'' Rather, the idea is to 
limit the removal program to sites that present an ``emergency'' under 
some reasonable definition of that term. Most Superfund removal actions 
today, by EPA's own definition, simply do not involve ``emergencies'' 
in any sense of the term. Accordingly, the removal program should be 
narrowed in order to refocus on its original intended purpose. EPA can 
accomplish this change as a matter of policy, without the need for any 
legislative action or any protracted rulemaking.

                                 ______
                                 
       Responses by Michael W. Steinberg to Additional Questions 
                           from Senator Smith

    Question 1. How can we change Superfund to make the program more 
successful and efficient in cleaning up superfund sites?
    Response. There are a number of changes that would make Superfund 
more successful and efficient. This letter focuses primarily on two: 
First, the NPL should be recognized as ``the tool of last resort'' for 
addressing contaminated sites. Second, the removal action program 
should be refocused to address the emergency situations for which it 
was originally intended. In addition, EPA should take several other 
important actions to improve the program; this letter presents those 
other reforms below in summary fashion.

    A. The NPL Should Be the Tool of Last Resort. Although hundreds of 
sites on the NPL have been and are being cleaned up, Superfund has 
attached a lasting stigma to many of those sites and to some of the 
communities that surround them. In many cases, Superfund also has 
imposed excessive operational, legal, and financial restrictions on 
these NPL sites that will interfere with their future reuse or 
redevelopment. Moreover, the cost at which Superfund has achieved 
results--over $30 billion in EPA appropriations alone since 1980, and 
at least $30 billion more in private sector spending--is far higher 
than necessary or justified in light of the risks being addressed.
    Looking ahead, Superfund is a poor choice for the government to 
rely upon to clean up future sites, other than in truly exceptional 
cases. NPL listing should be the tool of last resort--a tool that 
should only be used in those rare situations that require a high-cost, 
inefficient mechanism. EPA itself adopted this term--``the tool of last 
resort''--as its unofficial policy some years ago, but EPA has failed 
to change its actual decisionmaking in any concrete way to reflect this 
policy.
    The special circumstances that warrant use of the Superfund NPL as 
``the tool of last resort'' include sites that:
    (1) are severely contaminated; and
    (2) pose severe risks; and
    (3) have no near-term prospect of cleanup being initiated by 
responsible parties.
    Apart from sites that meet these three criteria for NPL listing, 
nearly all other sites should be managed under other appropriate 
programs, such as the RCRA corrective action program and the full range 
of state cleanup programs. Under those programs, responsible parties 
will continue to perform and fund cleanups, either individually or in 
conjunction with regulatory agencies, at sites they have contaminated. 
It is not necessary to resort to an NPL listing to secure the cleanup 
of these sites.

    B. The Removal Program Should Be Refocused to Its Original Intended 
Purpose. The removal action program should be refocused. The true 
emergencies it was originally meant to address, such as the recent 
decontamination of the Hart Senate Office Building, today account for 
just one-fourth of all removals. The other three-fourths consist of so-
called ``time-critical'' actions, where EPA seeks to have work commence 
within 6 months, and even ``non-time-critical'' actions. Of the 2,440 
removal actions commenced during the period from fiscal year 1992 
through fiscal year 1999, a total of 1,892 (77.5 percent) were non-
emergency situations.
    It is unclear why a continuing $250 MM/yr Federal program is needed 
to perform primarily non-emergency removal actions. Instead, Superfund 
removal actions should be limited to those contaminated sites, orphan 
or otherwise, that need immediate action to avert a significant health 
or environmental emergency.

    C. Other Reforms. Beyond the two points described above, a number 
of other reforms would also help to make Superfund faster, fairer, and 
more efficient. We present several of these reforms here in summary 
fashion:
     EPA should strengthen the effectiveness and authority of 
the National Remedy Review Board by (1) giving responsible parties a 
fair opportunity to participate in the process, (2) allowing non-EPA 
technical experts from states, local governments, NGO's, and the 
private sector to present their views, and (3) requiring the EPA 
Regions to implement the Board's recommendations or else explain 
publicly why they will not do so;
     EPA should extend to all NPL sites its strategy for 
optimizing ground water pump-and-treat remedies, which is currently 
limited to Fund-lead sites;
     EPA should follow through on its 1995 commitment to reduce 
oversight activities, establish clear criteria to determine what level 
of oversight is needed, and devise an accounting system to track 
oversight costs at specific sites in real time;
     EPA should strengthen its 1995 orphan share funding reform 
by removing the arbitrary 25 percent ``cap'' it adopted on an interim 
basis in 1996;
     EPA should develop practical ground rules for using funds 
in site-specific accounts as incentives to reward responsible parties 
who perform cleanups and incur costs far in excess of their own fair 
shares of liability; and
     EPA should use its new authority under the Small Business 
Liability Relief and Brownfields Revitalization Act to (1) provide 
sellers of contaminated property with appropriate and practical relief 
from liability and (2) construe broadly the universe of ``eligible 
response sites'' that will benefit from the finality provisions in the 
new Act.

    Question 2. What is your view on renewal of the Superfund tax?
    Response. The SSP strongly opposes any effort to re-impose the 
Superfund tax, for many reasons.
    First, it is important to recognize that the Superfund tax itself 
has little or nothing to do with the pace of the cleanup program. The 
pace of cleanup is determined primarily by the annual appropriation for 
Superfund. This amount has remained remarkably constant (at about $1.4 
billion) over the past 10 years, regardless of how much money was in 
the Trust Fund at any given time, and regardless of whether the 
Superfund tax was in effect. In other words, imposing the tax per se 
does nothing to maintain or increase the pace of cleanup.
    Second, the financial health of the Superfund program is actually 
better than one might think. Over and above the hundreds of millions of 
dollars remaining in the Trust Fund today, EPA has nearly $1 billion 
parked in site-specific accounts at hundreds of Superfund sites.\1\ EPA 
can spend that money at its own discretion to clean up those sites, 
without further appropriation by Congress. In addition, the Trust Fund 
typically takes in several hundred million dollars each year from (1) 
cost recoveries from PRPs, (2) collections from other Federal agencies 
for services rendered, (3) interest earned on investments, and (4) 
several other categories of recurring collections.
---------------------------------------------------------------------------
    \1\ These funds are often overlooked, perhaps because the special 
site accounts have not been widely publicized.
---------------------------------------------------------------------------
    Third, most new cleanups--about 70 percent of them--are performed 
and paid for by private parties, not by EPA. This is not at all what 
Congress expected when it levied the tax to finance cleanups that would 
be performed by EPA. Currently, EPA spends only about half of its 
annual Superfund appropriation on cleanup. The rest is spent on other 
things, including administration, management, research, and grants. 
Virtually all other Federal programs (including all EPA programs other 
than Superfund) receive money from general revenues to pay for their 
administration, management, research, and grants.
    Fourth, the Superfund program has addressed most of its original 
workload and accomplished the major part of its mission. In addition, 
EPA will soon convene a Superfund Subcommittee under the National 
Advisory Committee for Environment, Policy, and Technology (``NACEPT'') 
to deliberate on ``fundamental issues related to the future of 
Superfund,'' including the role and scope of the NPL.\2\ Thus, although 
work is ongoing and will be for some time, a massive infusion of new 
funds for the program is unnecessary and inappropriate. It also would 
encourage ``mission creep'' in a program justly famous for its 
inefficiency and poor cost control.
---------------------------------------------------------------------------
    \2\ 66 Fed. Reg. 56,104 (Nov. 6, 2001).
---------------------------------------------------------------------------
    Fifth, the companies targeted by the Superfund tax--oil, chemical, 
and large manufacturing companies--have already paid not once, but 
twice, and, in some multiparty cases, three times, for Superfund. As 
responsible parties, they have paid directly to clean up the sites they 
contaminated. As corporate taxpayers, they paid again. And as the only 
remaining ``deep pockets'' at many multi-party sites, they paid the 
shares of responsible parties that were defunct, insolvent, or 
bankrupt.
    Sixth, the Superfund tax is not needed to maintain the so-called 
``polluter pays'' principle, because Superfund is already 
overwhelmingly a ``polluter pays'' program. At most sites, responsible 
parties (private companies, DOD, DOE, etc.) pay virtually all the costs 
themselves. Even at the sites where EPA pays up front, the Department 
of Justice recovers those costs from viable responsible parties. As the 
Chief of DOJ's Environmental Enforcement Section just recently told a 
D.C. Bar Association symposium, ``The funding issue will have no direct 
impact on enforcement of Superfund sites.''\3\ This is because general 
revenues are used for cleanup only at ``orphan'' sites where no 
responsible party exists. This use of general revenues is entirely 
fair, because the companies targeted by the Superfund tax did not 
create those sites.
---------------------------------------------------------------------------
    \3\ 24 Hazardous Waste/Superfund Week 151 (April 22, 2002).
---------------------------------------------------------------------------
    Seventh, and last, to the extent that Superfund is used to clean up 
large mining sites--the vast legacy of an economically devastated 
American industry--it would be both illogical and unfair to use money 
raised by the Superfund tax. The companies targeted by the Superfund 
tax--oil, chemical, and large manufacturing companies--did not create 
or contaminate these large mining sites.
    In sum, imposing a tax on oil, chemical, and large manufacturing 
companies has little or nothing to do with the pace of cleanups under 
today's Superfund program. If Congress believes there is a need to 
raise additional revenues for other purposes, such as urban 
redevelopment and job training initiatives in connection with the 
brownfields program, then it should initiate a broader dialog on the 
need(s) and the potential revenue source(s). The Superfund tax is not 
the answer.

                               __________

        Statement of Kenneth Cornell, Executive Vice President, 
                           AIG Environmental

    Madame Chairwoman and members of the committee, I am Ken Cornell, 
Executive Vice President of AIG Environmental. Thank you for allowing 
us to present our views on the Superfund program and suggest ways that 
the program can be improved to speed cleanups, and reduce costs by 
using financial and insurance tools that can benefit both the private 
and public sector.
    AIG Environmental is a division of American International 
Companies. AIG's General insurance operations include the largest 
underwriters of commercial and industrial insurance in the United 
States, and the most extensive international property-casualty network. 
We are a Triple A rated company by Standard and Poors with over $450 
billion in assets and a wide variety of insurance and financial 
products to serve our clients. AIG Environmental has over 20-years of 
experience underwriting environmental risks and is currently the 
nations leading provider of environmental insurance. Our portfolio of 
environmental insurance products ranges from coverage for underground 
storage tanks, to environmental remediation contractors to insuring the 
cleanup of hazardous waste sites across the country--including 
Brownfields and Superfund sites. We are also the endorsed environmental 
insurance carrier for the Commonwealth of Massachusetts' Brownfields 
Redevelopment Access to Capital program. This innovative environmental 
insurance program has resulted in more than 70 Brownfield redevelopment 
projects in Massachusetts in the last 3 years.
    We view ourselves as a solutions company, as we work to provide 
innovative approaches to handling environmental liability and cleanup 
issues. Throughout our history, we have developed new insurance 
products to respond to new and emerging risks for the public and 
private sectors. In the 1980's, we offered insurance for Superfund 
Remedial Action Contractors (RAC), RCRA Treatment Storage and Disposal 
facilities (TSDF), and Underground Storage Tanks operators. In the 
1990's, we offered insurance for lender liability and private sector 
cleanups. In the new millennium, we are looking at mold, terrorism and 
bioterrorism risks. We are here today to focus on three areas where we 
believe the use of environmental insurance and financing can lead to 
more and faster cleanups of NPL sites within the existing framework of 
the Superfund statute. These areas are Cleanup Cost Cap Insurance for 
Fund lead work by EPA; De Minimis settlements for PRPs; and blended 
finite insurance programs that provide short and long term funding for 
cleanup of sites conducted by PRPs.

         CAPPING THE CLEANUP COSTS FOR EPA LEAD SUPERFUND SITES

    Based on our experience with other Federal Agencies, we believe 
that we can devise a program for hazardous waste sites being cleaned up 
by the EPA to help the Agency budget more effectively. A program 
supported by insurance can maximize the use of existing Superfund 
dollars, provide protection against unexpected costs that can postpone 
or stop current projects and move sites into redevelopment sooner 
because costs will be quantified and capped. Cleanup Cost Cap insurance 
can provide the EPA with a high degree of certainty as to what cleanups 
will cost, and provide private sector expertise in cost estimating.
    Briefly, Cleanup Cost Cap protects the responsible party(ies) 
against the unknown and unexpected cost overruns during cleanups. An 
example would be an estimate that the cost of cleanup is $10 million. 
The responsible party(ies) purchases Cleanup Cost Cap to cover cost 
overruns above the $10 million (plus a buffer). The buffer usually is 
about 10 percent of the expected cost of cleanup--or in this example $1 
million. The limits on the policy can range from a low of $100,000 to 
as high as $150 million. Going back to our example of a $10 million 
cleanup--the responsible party(ies) might elect to cover 100 percent 
above their expected cleanup cost of $10 million so they would buy a 
Cleanup Cost Cap limit of $10 million. In this example the responsible 
party(ies) would pay the first $11 million of cleanup (the original 
estimated cost of $10 million, plus the 10 percent buffer or $1 
million). Once cleanup costs exceed $11 million, the Cleanup Cost Cap 
would pay the next $10 million in cost. In others words, by buying the 
policy the responsible party(ies) is providing that $21 million dollars 
will be available for cleanup.
    EPA often sees cost overruns of between 20 percent to 30 percent at 
Fund lead NPL sites. When these overruns occur, funds are often 
diverted from other future planned cleanups, thereby delaying cleanups 
at other sites due to cost overruns.
    A program of this type would protect EPA's budget against these 
cost overruns. We have used similar programs with U.S. Department of 
Defense in addressing both active and closing military bases, Formerly 
Used Defense Sites (FUDS), as well as on transferring Department of 
Interior sites. For example:
     Mare Island (CA). The Department of Navy was able to 
transfer the site ``dirty'' to the remediation firm with the 
stipulation that no additional funding would be available. The 
remediation firm purchased Cleanup Cost Cap, which assured that the 
site would be cleaned up to the reuse standard--without returning to 
the Navy for additional funding. In the absence of Triple A rated paper 
supporting the remediation firm, transfer with provisions against 
future recourse may not have been possible.
     Fort Leavenworth (KS). The Department of Army was able to 
guarantee a finite cleanup on an active military base. In this 
instance, environmental insurance made it possible for the military to 
appropriate the cost of cleanup at the site thus being assured that the 
remediation firm would not try to return to the Army to request 
additional funding. The environmental insurance product assured that if 
there was more contamination than originally discovered, the Cleanup 
Cost Cap would cover the remediation costs.
     Portland-Bangor Waste Oil Facility (ME). This is a joint 
private sector-Federal government State Superfund Remediation. The 
insurance allows a long-delayed cleanup to occur by financially 
securing a realistic settlement and eliminating hundreds of PRPs. The 
Army agreed to fund their portion of the cleanup at this formerly used 
defense site (FUDS), with the stipulation that the remediation firm not 
return to them for additional cleanup funds. The cleanup firm took this 
assurance and approached the other PRPs at the site. After ``buying 
out'' the PRPs liability at the site, the cleanup firm used a finite 
insurance product to assure the cost of remediation and address future 
liability issues at the site.
    These programs can be cost effective and result in faster and more 
cleanups because the threat of cost overruns is reduced or eliminated. 
As the insurer our interest are aligned with EPA in that we minimize 
our risk by making sure the project is completed satisfactorily at 
minimal cost.
    Further, when the policy is underwritten by AIG Environmental the 
resources of AIG Consultants is included. They are a dedicated staff of 
environmental engineers who will review planning, designs, and costs to 
help the insured implement a cost effective remedy given the 
requirements of the cleanup goals. During the course of the cleanup AIG 
Consultants work with the insured to monitor costs and watch for 
potential overruns.
    If the committee is interested in this approach, we would welcome 
the opportunity to work with you and the EPA to develop a program for 
Fund lead Superfund cleanups.

       CREATING A CONSTANT REVENUE STREAM FOR LONG-TERM CLEANUPS

    One of AIG Environmental's most important achievements occurred in 
November, 2000 with the settlement of liability at the Iron Mountain 
Superfund Site in California. This innovative settlement, involving 
multiple private and public entities, will provide funding for cleanup 
over the next 30 years and fund a trust fund in perpetuity for the 
largest source of acid mine drainage in North America. This was 
achieved through the use of Blended Finite Insurance and a guaranteed 
investment contract.
    The use of blended finite insurance programs, coupled with SEC 
Regulation 468b trust funds for funding of environmental liabilities, 
may well prove to be one of the most effective tools to quickly settle 
liability at sites. This will provide funds for cleanup even if in the 
future PRPs involved in the cleanup are no longer financially able to 
pay for the cleanups.
    Blended Finite insurance is, very simply, a risk management tool 
that is used in conjunction with Cleanup Cost Cap and Pollution Legal 
Liability insurance and provided with environmental loss control 
expertise. It is a flexible program combining insurance with discounted 
funding techniques for existing liabilities. While seemingly complex at 
first glance, blended finite insurance programs establish trust funds, 
coupled with environmental insurance, to provide short and long term 
funding for the cleanup of sites. The Federal Government has a 
guaranteed source of funds to cleanup a site, even if PRPs become 
unable to pay for a variety of reasons. In many instances the 
government may be able to transfer the liability for cleanup from a 
company on shaky financial footing to a trust fund backup by a Triple A 
rated insurance company. This could prove to be a significant advantage 
for the government to insure that funds are available to cleanup the 
site--even over many years. It would also mean that if a PRP was no 
longer able to pay for the cleanup that EPA would not have to use 
scarce Fund dollars to conduct the cleanup.
    PRPs will be required shortly to make more accurate the disclosure 
of their environmental liabilities as a result of new congressionally 
mandated SEC disclosure laws. The blended finite insurance program will 
allow companies and related responsible parties to demonstrate that 
they are managing their environmental liabilities appropriately. For 
PRPs, there may be significant benefits as well, thereby motivating 
them to settle faster. This would end lengthy settlement negotiations 
and move the sites into the cleanup stage faster than is currently 
occurring.
    For the community that lives around the site--it has the additional 
security of knowing that the money will be there for cleanup, that the 
litigation surrounding the settlement is over more quickly, and that 
the site will be cleaned up as expeditiously as possible.
    An example of blended finite insurance is as follows. A site has an 
estimated cost of $20 million to cleanup. It has soil contamination and 
needs 10 years of ground water treatment. Blended finite insurance 
looks at the estimated cost of cleanup for each year and then adjusts 
those figures for inflation. In this example, the estimated cost is $20 
million. The net present value of the total cost is adjusted based upon 
the expected payout pattern and market interest rates. If one assumes 
that under this example the net present value of the expected costs is 
$15 million, that would mean if we were paid $15 million today we would 
be able to pay for $20 million in cleanup costs based upon the 
estimated payout pattern. Added to this could be coverage for cost 
overrun protection, or for the actual costs being spent sooner than 
estimated. Under this example we may be willing to provide $40 million 
of cleanup cost and cost overrun coverage (the original $20 million 
estimated cost, plus an additional $20 million of Cleanup Cost Cap) for 
an up front payment of $17 million. The policy would pay all costs of 
cleanup up to the $40M policy limit. In this situation the government 
has the actual estimated cost of cleanup served on day one, plus 
protection for unforeseen costs that may arise. The government could 
then consider partial, accelerated or full releases of liability for 
the PRPs who establish these accounts.
    Blended Finite insurance could prove to be a valuable policy tool. 
It will not solve every Superfund problem nor can it be used at every 
site. We do believe though that it should be considered much more 
frequently by the government. Our belief is that this approach can lead 
to faster settlements and encourage faster cleanups.
    We would welcome this opportunity to work with the committee, EPA 
and the Department of Justice to develop guidelines for the use of this 
approach at Superfund sites.

                REDUCING DE MINIMIS PARTY CLEANUP COSTS

    One of the complaints often heard about the current Superfund 
process is the settlement of De Minimis Parties at sites. In order to 
get a full release of liability from EPA at settlement, De Minimis 
parties are usually charged a ``premium'' by EPA to cover unexpected 
cost overruns at the site. These ``premiums'' usually run between 50 
percent to 100 percent of cleanup cost allocated to the De Minimis 
parties. Most De Minimis parties object to paying this ``premium'', but 
wind up paying it anyway in order to receive the release of liability.
    We believe an insurance approach could significantly lower the 
premium for De Minimis parties. This would work through the use of 
Cleanup Cost Cap insurance. As an example let us assume there are 200 
De Minimis parties at a site and each has a cleanup liability of 
$20,000 for an aggregate of $4 million. In a traditional settlement EPA 
would seek up to an additional ``premium'' of $4 million (100 percent 
of cleanup liability) and charge each De Minimis PRP an additional 
$20,000 or a total of $40,000. However, if the De Minimis Parties were 
allowed to purchase a Cleanup Cost Cap policy for $4 million their 
premium would vary between 8 percent to 12 percent of the policy limit 
or an approximate high end total cost of $480,000, resulting in a cost 
of $2,400 each. This would make the De Minimis parties settlement cost 
$22,400 as opposed to EPA's $40,000 or a savings to the De Minimis 
parties of $17,600. However the settlement would still provide EPA with 
the same $4 million dollars in cost overrun protection it was looking 
for.
    This approach should result in faster settlements with the 
government. De Minimis parties may not view the Cleanup Cost Cap 
premium in the same light as the EPA ``Premium'' since it is 
significantly less costly and therefore would agree to settle faster, 
and thereby move the site into the cleanup phase sooner.
    Again, we would suggest that the committee might ask that EPA and 
the Department of Justice could make the Superfund program fairer for 
small parties, while protecting the government against unexpected 
costs.
    Madame Chairwoman, thank you for this opportunity to present our 
views and solutions to Superfund issues. We look forward to being a 
part of solutions with you and the committee and EPA on these issues. 
Our belief is that the approaches outlined here can assist Superfund in 
achieving its mission of protecting public health and the environment.
    I will be happy to answer any questions you or the committee 
members may have.

                                 ______
                                 
         Responses of Kenneth Cornell to Additional Questions 
                         from Senator Jeffords

    Question 1. Could you briefly describe how Cleanup Cost Cap 
insurance works and how other Federal Agencies have used it?
    Response. Briefly, Cleanup Cost Cap protects the responsible 
party(ies) against the unknown and unexpected cost overruns during 
cleanups. An example would be an estimate that the cost of cleanup is 
$10 million. The responsible party(ies) purchases Cleanup Cost Cap to 
cover cost overruns above the $10 million (plus a buffer). The buffer 
usually is about 10 percent of the expected cost of cleanup--or in this 
example $1 million. The limits on the policy can range from a low of 
$100,000 to as high as $150 million. Going back to our example of a $10 
million cleanup--the responsible party(ies) might elect to cover 100 
percent above their expected cleanup cost of $10 million so they would 
buy a Cleanup Cost Cap limit of $10 million. In this example the 
responsible party(ies) would pay the first $11 million of cleanup (the 
original estimated cost of $10 million, plus the 10 percent buffer or 
$1 million). Once cleanup costs exceed $11 million, the Cleanup Cost 
Cap would pay the next $10 million in cost. In others words, by buying 
the policy the responsible party(ies) is providing that $21 million 
dollars will be available for cleanup.

    Question 2. The Iron Mountain Superfund Site settlement in 
California was identified by the Clinton Administration as one of the 
most innovative Superfund settlements. Could you briefly describe the 
settlement, how it worked to benefit the government and what other 
types of Superfund sites it could be used?
    Response. One of AIG Environmental's most important achievements 
occurred in November 2000 with the settlement of liability at the Iron 
Mountain Superfund Site in California. This innovative settlement, 
involving multiple private and public entities, will provide funding 
for cleanup over the next 30 years and fund a trust fund in perpetuity 
for the largest source of acid mine drainage in North America. This was 
achieved through the use of Blended Finite Insurance and a guaranteed 
investment contract.
    The use of blended finite insurance programs, coupled with SEC 
Regulation 468b trust funds for funding of environmental liabilities 
may well prove to be one of the most effective tools to quickly settle 
liability at sites. This will provide funds for cleanup even if in the 
future PRPs involved in the cleanup are no longer financially able to 
pay for the cleanups.
    Blended Finite insurance is, very simply, a risk management tool 
that is used in conjunction with cleanup Cost Cap and Pollution Legal 
Liability insurance and provided with environmental loss control 
expertise. It is a flexible program combining insurance with discounted 
funding techniques for existing liabilities. While seemingly complex at 
first glance, blended finite insurance programs establish trust funds, 
coupled with environmental insurance, to provide short and long term 
funding for the cleanup of sites. The Federal Government has a 
guaranteed source of funds to cleanup a site, even if PRPs become 
unable to pay for a variety of reasons. In many instances the 
government may be able to transfer the liability for cleanup from a 
company on shaky financial footing to a trust fund backup by a Triple A 
rated insurance company. This could prove to be a significant advantage 
for the government to insure that funds are available to cleanup the 
site--even over many years. It would also mean that if a PRP was no 
longer able to pay for the cleanup that EPA would not have to use 
scarce Fund dollars to conduct the cleanup.
    PRPs will be required shortly to make more accurate the disclosure 
of their environmental liabilities as a result of new congressionally 
mandated SEC disclosure laws. The blended finite insurance program will 
allow companies and related responsible parties to demonstrate that 
they are managing their environmental liabilities appropriately. For 
PRPs, there may be significant benefits as well, thereby motivating 
them to settle faster. This would end lengthy settlement negotiations 
and move the sites into the cleanup stage faster than is currently 
occurring.
    For the community that lives around the site--it has the additional 
security of knowing that the money will be there for cleanup, that the 
litigation surrounding the settlement is over more quickly, and that 
the site will be cleaned up as expeditiously as possible.
    An example of blended finite insurance is as follows. A site has an 
estimated cost of $20 million to cleanup. It has soil contamination and 
needs 10 years of ground water treatment. Blended finite insurance 
looks at the estimated cost of cleanup for each year and then adjusts 
those figures for inflation. In this example, the estimated cost is $20 
million. The net present value of the total cost is adjusted based upon 
the expected payout pattern and market interest rates. If one assumes 
that under this example the net present value of the expected costs is 
$15 million, it would mean if we were paid $15 million today, we would 
be able to pay for $20 million in cleanup costs based upon the 
estimated payout pattern. Added to this could be coverage for cost 
overrun protection, or for the actual costs being spent sooner than 
estimated. Under this example we may be willing to provide $40 million 
of cleanup cost and cost overrun coverage (the original $20 million 
estimated cost, plus an additional $20 million of Cleanup Cost Cap) for 
an up front payment of $17 million. The policy would pay all costs of 
cleanup up to the $40M policy limit. In this situation the government 
has the actual estimated cost of cleanup served on day one, plus 
protection for unforeseen costs that may arise. The government could 
then consider partial, accelerated or full releases of liability for 
the PRPs who establish these accounts.
    Blended Finite insurance could prove to be a valuable policy tool. 
It will not solve every Superfund problem nor can it be used at every 
site. We do believe though that it should be considered much more 
frequently by the government. We believe sites that have large cleanup 
costs or will take a number of years to conduct the cleanup and/or 
sites with long-term operation and maintenance activities are good 
candidates for Blended Finite insurance settlements. Our belief is that 
this approach can lead to faster settlements and encourage faster 
cleanups.

                               __________

     Statement of Alfred Peone, Chairman, Spokane Tribe of Indians

    Thank you Mr. Chairman and members of the Committee for the 
opportunity to present this testimony in support of EPA's Superfund 
efforts. I am submitting this testimony on behalf of the Spokane Tribe 
of Indians to ask for your help in ensuring that the Superfund is 
funded, either through appropriations or the Superfund tax, at a level 
sufficient for EPA to continue working toward cleaning up hazardous 
substances that threaten the human health and environment of our 
Reservation.
    To begin, I would like to provide you with some background 
information on our people and our Reservation, which is located in 
eastern Washington. All lands along the full length of the Spokane 
River were once held by our Tribe. These lands, and the waters that 
flowed through them, were a gift to us from the Creator. Through the 
waters, the Creator also sent to us vast numbers of salmon to feed us 
and to provide us with our culture. We are a salmon people. A river 
people.
    Our homeland has now been reduced to our current Reservation at the 
confluence of the Spokane and Columbia Rivers. The dams on these rivers 
that provide electricity for the entire northwestern United States, 
killed off our historic salmon runs. But the waters, fish, and other 
parts of our remaining river ecosystems are still a critical part of 
who we, the Spokane people, are. They sustain us, both physically and 
spiritually.
    The Spokane people use the fish, plants, animals, and waters of the 
Spokane River in ways different from the ways others use these 
resources. Some of our members live permanently along the waters. Many 
who do not live there camp along the waters for large parts of the good 
weather months. These are permanent seasonal residences, and our people 
who set up these camps spend a great deal more time there than a 
typical recreational camper or fisherman would. We have children 
playing on the beaches. We drink the waters, and we eat the fish, 
animals and plants that grow from them. These resources also provide us 
with traditional medicines, and are used in our religious ceremonies 
and in other cultural practices. Thus, our exposure to contaminants in 
natural resources is greater than the exposure the general population 
receives from contaminated natural resources.
    As we struggle to maintain the health of our people and Reservation 
through practicing our traditional ways, the rivers that once brought 
salmon to our Tribe now carry to our homeland the uncaptured poisons of 
mining and industry. Heavy metals from Idaho's historic Silver Valley 
mining district flow to our Reservation in the Spokane River, which 
also carries industrial waste from upstream cities. The Midnite Uranium 
Mine in the heart of our Reservation and a uranium mill adjacent to our 
lands leak radioactive contaminants into our only inland waterways. And 
while we know little about the pollutants in the Columbia River, we are 
beginning to learn that they are health-threatening and come from sites 
in northern Washington, as well as Canada.
    EPA's Region 10 Superfund program is in varying stages of examining 
these threats to our health and our Reservation's environment. It is 
our hope that once our contamination problems are cleaned up, it will 
be safe and healthy for our members to continue to use our gifts from 
the Creator as they were meant to be used. Otherwise, a part of the 
Spokane Tribe, as a people, will die.
    Unfortunately the Superfund is being depleted to a point where 
Region 10 is forced to either slow down or stop the work that is needed 
to protect our health. The President's insufficient budget request and 
the absence of the Superfund tax combine to ensure the impossibility of 
timely Superfund cleanups. The harmful effects from this will be 
immediately and directly felt by our people. We have awaited cleanup of 
the Midnite Uranium Mine since it ceased production more than 20 years 
ago. For several decades, it has leaked radioactive acid mine water 
into our Reservation's Blue Creek drainage. Its pollutants affect our 
surface water, ground water, plants, animals and fish. This condition 
leaves our people with the unacceptable choice of either not using that 
area's resources, or using them and ingesting their contaminants. The 
Midnite was placed on the National Priorities List in 1999, but we are 
now told that EPA Region 10's diminished Superfund budget will require 
a slowdown this year, and may mean that EPA's work will stop altogether 
during fiscal year 2003. If that happens, Region 10 will not be able to 
complete its Remedial Investigation and Feasibility Study for at least 
3 years, and probably more. Cleanup cannot begin until these studies 
are completed. Any delay of the Remedial Investigation and Feasibility 
Study will therefore mean longer exposure of our people to the Midnite 
Mine's contaminants.
    We understand the financial strains America's war on terrorism 
places on the Federal budget. When the salmon still came to our country 
we shared them with many other tribes that would come to our fishing 
places. It is our Tribal way to care for our neighbors. And we still 
care for our neighbors. We have sympathy for those who lost their lives 
in the September 11 attacks on our Country. But we also are concerned 
about the children in the Coeur d'Alene Basin who have high levels of 
lead in their blood. We are concerned about the health risks to members 
of the Coeur d'Alene Tribe who use their Reservations's waters and 
resources in their traditional ways. We are concerned about the people 
living along the Columbia River's contaminated waters. And we are also 
concerned about the citizens of Washington who use the Spokane River's 
resources. But we are all a part of the United States, and the death, 
injury or illness of an American from uncontrolled poisons in our 
natural resources hurts our Country no less than an American's death, 
injury or illness from terrorist acts.
    The Spokane Tribe appreciates the efforts of all who have been 
working to solve this nation's serious problems. We appreciate that 
industry, and the Federal, state and tribal governments, spend millions 
of dollars annually trying to understand and address the contamination 
of America's resources. And specifically, we appreciate the work EPA 
Region 10's Superfund program has done to try to understand the 
problems in Washington State and on the Spokane Indian Reservation. But 
deciding when studies of pollution threats to human health and the 
environment should be performed, and what must be cleaned up, cannot be 
driven by the bottom line. Our Nation's health is at stake, and the 
answers must be driven by science, which will tell us what is healthy 
and what is not. In the Spokane Tribe's situation, there have been no 
studies to fully examine the effects that contamination from the 
Midnite Mine and other sources have on our people using our resources 
in our Tribal way. We continue to encourage EPA to look into these 
effects, and ask Congress to support through a well-financed Superfund 
the studies that will help us understand what must be done for our 
protection. Funding must be made available to make sure cleanup actions 
can be taken so the health of everyone will be protected--not just at 
the Midnite Mine and other sources directly harming our Reservation, 
but nationally as well. Simply put, this is a critical component of our 
Nation's effort to ensure homeland defense.
    It is our Tribal way to protect future generations. Today we ask 
the Committee to protect the future generations of all America by 
supporting the Superfund at a level that will allow EPA to understand 
and address the threats of hazardous substances to American people and 
resources. A vision of a healthy America tomorrow requires no less.
    Thank you.

                               __________

            Statement on Behalf of Friends of a Clean Hudson

    We would like to thank Senators Jeffords and Boxer for convening a 
hearing on the Environmental Protection Agency's management of the 
Superfund Program and for allowing us to submit testimony, on this 
issue, EPA's approach to addressing threats from large contaminated 
sediment sites deserves close Congressional scrutiny. The Committee 
must ensure that EPA acts to fulfill its Superfund mandate to safeguard 
human health and the environment by making polluters pay to clean up 
toxic Waste sites and to integrate affected communities into the 
cleanup decisionmaking process.
    Toxic waste sites represent serious and ongoing threats to public 
health and environmental quality, In 1980, Congress enacted Superfund 
to address threats highlighted by now legendary sites including Love 
Canal, NY and Valley of the Drums, KY, Since its inception in 1980, 
Superfund has succeeded in cleaning up more than 800 sites, the 
majority of them in the last decade of this essential program.
    In 2001, however, Superfund cleanups dramatically declined, 
resulting in more than a 50 percent decrease in a short 2 year period. 
Two possible expl nations exist. First, this sudden downturn could be 
the result of the Bush administration under-funding cleanups. Second, 
the decrease could be the result of the administration intentionally 
slowing down the pace of cleanups and blaming, this slowdown on mega 
sites, which are toxic waste sites costing over $50 million to clean 
up. This in turn would enable the administration to suggest additional 
reforms to the already reformed Superfund program and to undertake 
activities that weaken Superfund's polluter paysprincipleend 
protections for public participation.
    In 1989, EPA initiated its ``enforcement first'' policy, by which 
EPA seeks to identify the party responsible for environmental 
contamination and requests a comprehensive cleanup from that polluting 
entity. If EPA's request is refused, EPA can--if it has the money--
conduct the clean up and sue the polluter to recover up to three times 
the agency's costs, plus penalties for noncompliance. Because the price 
tag of a government cleanup generally exceeds costs to the polluter of 
conductingg the cleanup itself, this cost recovery threat after a 
government conducted cleanup provides the necessary incentive 
underlying EPA's successful enforcement first policy.
    In recent testimony before a House Appropriations Subcommittee, EPA 
Administrator Whitman reported that approximately 70 percent of 
Superfund cleanups were in fact being conducted by these responsible 
parties. It is essential to understand that this success depends on 
EPA's ability to pay for cleanups: if EPA cannot pay for as many 
cleanups, then it cannot file as many cost-recovery actions.
    EPA can also issue a unilateral administrative order directing, 
polluters to clean up their contamination and seek court enforcement of 
that order. However, protracted litigation over these orders delays 
cleanups and leaves communities unprotected from the significant health 
risks from ongoing exposure to environmental toxins.
    Here is the crisis: The Superfund is dwindling, from a high of more 
than $3 billion in 1995, to only $28 million at the end of 2003. Yet 
from 2001 to 2003, the administration has under-funded the Superfund 
program by at least $1 billion to $1.4 billion. This funding shortfall 
would have an adverse impact on any program. For EPA, woefully 
inadequate funding will leave the agency unable to implement its own 
enforcement first policy.
    United States taxpayers are increasingly bearing the burden of 
EPA's Superfund program: taxpayers paid $634 million in 2001, $635 
million in 2002, and will pay a projected $700 million in 2003. In 
fact, the administration is billing taxpayers 54 percent of Superfund 
program costs in 2003. In contrast, polluting industries have enjoyed a 
$4 million a day tax break, more than $10 billion since Superfund's 
polluter pays taxes expired in 1995. We are gravely concerned that 
without renewed efforts to reauthorize the expired tax that funded the 
Superfund program, EPA will have neither the will nor the ability to 
continue to require clean up of the Hudson River and similar sites.
    The second explanation for the dramatic downturn in cleanups 
relates to the administration's approach to mega sites, which 
potentially benefits polluters at the nation's largest toxic waste 
sites, yet could weaken or eliminate Superfund's strong clean up and 
liability provisions and community participation requirements. We are 
concerned that this approach could be applied to the Hudson River PCB 
Superfund Site despite the fact that the General Electric Company has 
been identified as the responsible party and is financially viable.
    It would be regrettable if the administration could also ultimately 
shift the cost of site remediation from polluters to taxpayers. We fear 
that the administration may be planning to institutionalize--through 
formal or informal ``reforms'' to the program--the process and approach 
currently being used at Anniston, Alabama. If these divergences from 
current practice were applied to the Hudson River PCB Site, this would 
seriously weaken Superfund's ability to integrate citizens into the 
decisionmaking process and the program's ability to protect public 
health and environmental quality would be compromised.
    Recent press reports and agency actions indicate that the slowdown 
of cleanups will exist during the administration's consideration of 
potential reforms that that may weaken Superfund's protections that 
would apply to mega sites. It is as recently as December 2001 that the 
Small Business Liability Relief and Brownfields Revitalization Act was 
passed, enacting reforms supported by Congress. Reforms that the 
administration may be considering include:
    (1) Striking deals that benefit polluters while undercutting 
efforts by private citizens to make polluters pay for damage caused by 
their contamination;
    (2) Creating an administrative program, which may not contain 
Superfund protections, to address threats at mega sites;
    (3) Shifting cleanups to other programs that are ill-prepared or 
incapable of undertaking cleanup activities, or that shift the cost of 
paying for cleanups from polluters to taxpayers; and
    (4) Granting polluters unnecessary and irresponsible waivers of 
liability.
    We steadfastly oppose such ``improvements'' and any application of 
them to the Hudson River PCB Superfund Site because they threaten to 
weaken protections for public health and prevent vigorous public 
participation. More than 70,000 public comments were received by EPA on 
the clean up of this Site. We would urge that EPA agreements such as 
the partial consent decree recently entered into at Anniston, Alabama 
not be used as a model. Cutting off public participation and absolving 
polluters of environmental liability would be an unfortunate precedent 
with potential national implications. We also vehemently oppose any 
agency imposed moratorium on Superfund cleanups during the resolution 
of this ongoing debate: it is contrary to the spirit and underlying 
policy rationales of Superfund and fundamentally unfair to communities 
burdened by pollution and the consequences to human health of ongoing 
exposure to dangerous environmental toxins.
    Here in New York, we have one of the nations largest Superfund 
Sites and one of the most contentious cleanup debates. The Hudson River 
Superfund Site has harmed one of this country's most precious national 
resources and one of its most biologically productive estuaries. Beyond 
the extensive environmental risks, it poses adverse health risks to 
residents whose documented consumption of PCB contaminated Hudson River 
fish continues despite warnings of fish advisories throughout the 
region.
    The Hudson River PCB Superfund Site is at an essential juncture: 
after two decades, the nationally and internationally peer-reviewed 
Record of Decision was signed on February 1, 2002. The willingness of 
the General Electric Company as tle responsible--party to finance or 
conduct the selected remedy remains uncertain. It is essential that EPA 
go to the negotiating table fully supported by an adequately funded 
program. EPA has selected the remedy and under Superfund tradition 
money to conduct that remedy must be available.
    The strength of EPA is also necessarily tied to its ability to 
proceed with the process outlined above. The process in place works; 
there is no defensible reason to deviate from it. We would also have 
grave reservations about the impact of any new program onsites 
currently underway. For example, the Hudson River PCB Superfund Site 
could qualify as a mega site based on its estimated cleanup costs. The 
General Electric Company is the viable PRP for this site. EPA has 
finally signed the ROD and is currently reviewing GE's submitted 
response. We hope to move expeditiously towards the comprehensive 
cleanup set forth in that historic document. Any administration 
decision to retreat from this or other cleanups due to subsequent mega 
site designation could neither be legtimately defensible nor in accord 
with policy and congressional intent underscoring the rationale of our 
existing Superfund legislation.
    These potential ``reforms'' have one thing in common; each weakens 
Superfund's protections as they apply to some of the nation's most 
contaminated toxic waste sites. Superfund is the keystone cleanup 
program that makes all other Federal and State cleanup programs 
effective. Superfund is a largely unseen yet ever-present gorilla in 
the closet that Federal and State cleanup officials use to make 
intransigent polluters clean up their sites. Superfund provides vital 
funding, technical assistance, and policy guidance to other programs 
that helps them clean up their sites. When other programs do not have 
the administrative capabilities or political will to clean up a site, 
they call in Superfund.
    By undercutting the ability of Superfund to protect public health, 
this Administration is also undercutting every other cleanup program in 
the country. This is great for polluters but devastating for public 
health. Ultimately, citizens in communities across the country that are 
affected by toxic waste sites will bear the burden of less-protective 
remedial actions and longer cleanup delays that could result from EPA's 
actions.
    In the end, these ``reforms'' are also signals to polluters that 
the agency charged with holdings them responsible is less interested in 
doing so, This is not the message we want to send to companies. What 
the administration is proposing, and what we are seeing based on 
decisionmaking at sites such as Anniston, Alabama and potentially at 
the Hudson River PCB Superfund Site, is a slippery slope, a potential 
unraveling of Superfund protections for cleanups nationwide.
    Over the last 20 years, Superfund has proven that it can clan up 
toxic waste sites. The administration should not turn its back on this 
program, but rather should embrace and buildupon its more than 20 years 
of successes. The Administration should let the program do what it does 
best, clean up sites. However, the administration should not release 
polluters from liability and extract the public from the cleanup 
decisionmaking process. Superfund can protect public health and 
environmental quality at the nation's worst toxic waste sites now, and 
in the future.

    Statement of Eliot Spitzer, Attorney General, State of New York

    The New York State Attorney General's Office has a major role in 
the enforcement of the Comprehensive Environmental Response, 
Compensation, and Liability Act (``CERCLA'') in New York. The office is 
often responsible for negotiating cleanup, cost recovery and natural 
resource damages settlements, and when a settlement cannot be reached, 
it is responsible for the litigation of the State's CERCLA claims. The 
office has been litigating hazardous waste cases for more than two 
decades, ever since it commenced the Love Canal case in 1980.
    The Attorney General's Office has developed extensive familiarity 
with liability and cleanup issues in this field. We not only represent 
the Department of Environmental Conservation and other State agencies 
in relevant litigation, but have had an opportunity to consider and 
deal with many of the important policy issues relating to these 
subjects.
    The Superfund program is vitally important in assuring the 
protection of public health and the environment from releases of 
hazardous substances at thousands of sites across the country. One of 
the essential elements of that program is EPA's ability to spend money 
from the Federal Superfund on cleanups. EPA's ability to conduct 
cleanups paid for by the Superfund is a major factor in convincing 
private parties to conduct cleanups themselves at their own expense. As 
a consequence, the Superfund should be fully funded to obtain cleanups 
by responsible parties rather than force the taxpayers to bear that 
expense.
    Last month, in testimony before a House Appropriations 
Subcommittee, EPA Administrator Whitman reported that about 70 percent 
of all Superfund sites were being cleaned up by responsible parties. 
But the very fact that so many cleanups are privately funded is due in 
large part to the existence of the Superfund and the availability of 
funds within it to conduct government-funded cleanups.
    There are multiple reasons why private parties clean up sites for 
which they are responsible. Some parties no doubt pay for cleanups out 
of a sense of responsibility and public spirit. Some are concerned 
about their image. For others, it is only the fact that EPA could 
finance a cleanup that triggers a private-funded cleanup. The potential 
expenditure is enough, because the responsible party realizes that the 
cleanup will be done, one way or another, and the party often prefers 
to maintain some control over the process, including ensuring that 
costs are contained.
    The existence of the Superfund is a fundamental fact of life for 
all involved with site cleanups. It is not simply the decision to 
proceed with a government cleanup versus private cleanup that is 
affected. The terms, including scope and timing, of the private 
cleanup, which may be negotiated by the government and the private 
parties, may also be heavily influenced by the potential for government 
use of the Superfund.
    In a negotiation, each party has to decide whether the terms 
required to satisfy the other parties in the negotiation are better or 
worse than a breakdown of the negotiations altogether. As David Gold of 
Harvard Law School has said, the question is what is the ``best 
alternative to a negotiated agreement'' for each of the parties?
    Here is how that question might be answered, first, with the 
Superfund in place and, second, with no Superfund. Assume that the EPA 
insists on a thorough cleanup that costs more than a responsible party 
wants to pay. That party always has the alternative of refusing to do 
the cleanup. If the Superfund is available, EPA can then perform the 
cleanup itself and sue for cost recovery. In addition to evaluating the 
likelihood that it will be held liable, the private party must weigh 
the likely bottom-line cost of the government-financed cleanup, plus 
interest, its own attorneys' fees and those of the government, against 
the opportunity to do the cleanup itself as required by EPA, possibly 
more cheaply than the government can.
    But if no Superfund money is available, the calculus is quite 
different. EPA will be unable to clean up the site itself and sue for 
cost recovery. EPA still has the option of issuing a unilateral 
administrative order to compel cleanup and then seeking court 
enforcement. But not every case can be sent for enforcement along the 
imminent and substantial endangerment route of section 106 of CERCLA. 
And the result of such litigation is a delay in cleanup, which may suit 
the responsible party but which continues the risks to the public 
created by the hazardous waste site. Thus, from a strictly self-
interested perspective, in the absence of Superfund money to finance 
government cleanups, the best alternative in negotiations for the 
responsible party may actually be to refuse to cooperate.
    We in New York are very mindful of these considerations for many 
reasons. First, we have 87 National Priority List sites in New York. If 
NPL sites are not efficiently cleaned up because the Superfund has 
become depleted, fewer of the remaining contaminated sites will be 
cleaned, fewer sites will be placed on the NPL in the future, and more 
sites will have to be processed by State cleanup agencies. In other 
words, the failure to fund the Superfund is nothing less than a cost-
shift from the Federal Government to the States. We know of no new 
consensus that toxic sites are a local problem, which would be a 
reversal of the commitment of the Congress years ago to bring a 
national solution to this pervasive problem. Without adequate funding 
at a level sufficient to induce private parties to clean up sites, the 
States will be required to pay more of the cleanup costs than during 
the last two decades. None of the States can afford this shift.
    Second, we also have grave concerns about funding of the Superfund 
because one of the Nation's largest Superfund sites, the Hudson River 
PCBs NPL Site, is at a crucial stage. A Record of Decision was adopted 
by EPA in early February. The responsible party has an opportunity to 
implement the selected remedy, but its willingness to do so is only now 
about to be determined. It is crucial that at sites like the Hudson 
River Site, or the Onondaga Lake Sediments Site near Syracuse, the EPA 
come to the table with the strength of a well-financed Superfund. It 
must be in a position to tell responsible parties that, subject to 
judicial review after cleanup, the remedies selected after full 
investigation and study under the National Contingency Plan will be 
implemented, one way or another. If the responsible party wants to 
cooperate, that is welcome. But if not, EPA must be able to ensure that 
its remedy will be implemented by its own actions.
    Without a fully funded Superfund, and without the cooperation that 
the potential use of the Superfund elicits from private parties, many 
sites will remain contaminated indefinitely. As hazardous substances 
continue to be released and risks to the public go unabated and worsen, 
the full promise of the mature, 21-year-old CERCLA program will fade.
    We are also very troubled by suggestions that the refinancing of 
the Superfund be delayed until substantive changes in CERCLA's 
liability provisions can be legislated. Throughout the 1990's, enormous 
resources were expended to bring about or defeat major liability 
changes, without agreement being reached on a major revision. Finally, 
in December 2001, Congress passed the Small Business Liability Relief 
and Brownfields Revitalization Act, which clarified liability 
provisions and enacted those reforms which had Congressional support. 
Those at risk from hazardous waste sites cannot wait for the 
refinancing of the Superfund for the number of years it would likely 
take for additional substantive amendments to be agreed upon.
    Our communities should not be held hostage to a contentious 
liability debate. Let the sites be cleaned up as quickly as possible; 
the legislative debate on other issues can follow its own separate 
course. We oppose any moratorium on cleanups, just as we are 
emphatically opposed to any emasculation of the bargaining power of the 
EPA in cleanup negotiations.
    It is also important that when the Superfund is refinanced, 
industries that profited from the generation of hazardous wastes 
continue to carry the main burden of cleaning up hazardous waste sites. 
This is not a program that should be financed by general revenues. 
Moreover, when a petroleum tax and other industry-focused measures were 
adopted in 1980 to finance the Superfund, the petroleum industry 
obtained an exclusion from liability for petroleum products. The 
continued existence of that exclusion should depend on continuation of 
the petroleum tax.
    We thank you for this opportunity to present our views to the 
subcommittee.
  

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