    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

                        CONSTITUTIONAL CONSIDERATIONS: STATE
                          VERSUS FEDERAL ENVIRONMENTAL POLICY IM-
                          PLEMENTATION

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

                                    HEARING

                                   BEFORE THE

                  SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JULY 11, 2014

                                   __________

                               Serial No. 113-159

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov

                                  ____________

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                        COMMITTEE ON ENERGY AND COMMERCE

                              FRED UPTON, Michigan
                                     Chairman

    RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
    JOE BARTON, Texas                      Ranking Member
      Chairman Emeritus                  JOHN D. DINGELL, Michigan
    ED WHITFIELD, Kentucky               FRANK PALLONE, Jr., New Jersey
    JOHN SHIMKUS, Illinois               BOBBY L. RUSH, Illinois
    JOSEPH R. PITTS, Pennsylvania        ANNA G. ESHOO, California
    GREG WALDEN, Oregon                  ELIOT L. ENGEL, New York
    LEE TERRY, Nebraska                  GENE GREEN, Texas
    MIKE ROGERS, Michigan                DIANA DeGETTE, Colorado
    TIM MURPHY, Pennsylvania             LOIS CAPPS, California
    MICHAEL C. BURGESS, Texas            MICHAEL F. DOYLE, Pennsylvania
    MARSHA BLACKBURN, Tennessee          JANICE D. SCHAKOWSKY, Illinois
      Vice Chairman                      JIM MATHESON, Utah
    PHIL GINGREY, Georgia                G.K. BUTTERFIELD, North Carolina
    STEVE SCALISE, Louisiana             JOHN BARROW, Georgia
    ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
    CATHY McMORRIS RODGERS, Washington   DONNA M. CHRISTENSEN, Virgin
    GREGG HARPER, Mississippi            Islands
    LEONARD LANCE, New Jersey            KATHY CASTOR, Florida
    BILL CASSIDY, Louisiana              JOHN P. SARBANES, Maryland
    BRETT GUTHRIE, Kentucky              JERRY McNERNEY, California
    PETE OLSON, Texas                    BRUCE L. BRALEY, Iowa
    DAVID B. McKINLEY, West Virginia     PETER WELCH, Vermont
    CORY GARDNER, Colorado               BEN RAY LUJAN, New Mexico
    MIKE POMPEO, Kansas                  PAUL TONKO, New York
    ADAM KINZINGER, Illinois             JOHN A. YARMUTH, Kentucky
    H. MORGAN GRIFFITH, Virginia
    GUS M. BILIRAKIS, Florida
    BILL JOHNSON, Ohio
    BILLY LONG, Missouri
    RENEE L. ELLMERS, North Carolina

                                     7_____

                  Subcommittee on Environment and the Economy

                             JOHN SHIMKUS, Illinois
                                     Chairman
    PHIL GINGREY, Georgia                PAUL TONKO, New York
      Vice Chairman                        Ranking Member
    RALPH M. HALL, Texas                 FRANK PALLONE, Jr., New Jersey
    ED WHITFIELD, Kentucky               GENE GREEN, Texas
    JOSEPH R. PITTS, Pennsylvania        DIANA DeGETTE, Colorado
    TIM MURPHY, Pennsylvania             LOIS CAPPS, California
    ROBERT E. LATTA, Ohio                JERRY McNERNEY, California
    GREGG HARPER, Mississippi            JOHN D. DINGELL, Michigan
    BILL CASSIDY, Louisiana              JANICE D. SCHAKOWSKY, Illinois
    DAVID B. McKINLEY, West Virginia     JOHN BARROW, Georgia
    GUS M. BILIRAKIS, Florida            DORIS O. MATSUI, California
    BILL JOHNSON, Ohio                   HENRY A. WAXMAN, California (ex
    JOE BARTON, Texas                        officio)
    FRED UPTON, Michigan (ex officio)

                                      (ii)
                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. John Shimkus, a Representative in Congress from the State of
      Illinois, opening statement....................................     1
        Prepared statement...........................................     3
    Hon. Paul Tonko, a Representative in Congress from the State of
      New York, opening statement....................................     4
    Hon. Henry A. Waxman, a Representative in Congress from the State
      of California, opening statement...............................     6

                                   Witnesses

    Robert Meltz, Legislative Attorney, Congressional Research
      Service........................................................     8
        Prepared statement...........................................    10
    Jonathan H. Adler, Johan Verheij Memorial Professor of Law and
      Director, Center for Business Law and Regulation, Case Western
      University School of Law.......................................    26
        Prepared statement...........................................    28
    Richard Revesz, Lawrence King Professor of Law and Dean Emeritus,
      New York University School of Law..............................    48
        Prepared statement...........................................    51
    Rena Steinzor, Professor, University of Maryland School of Law,
      and President, Center for Progressive Reform...................    59
        Prepared statement...........................................    61

       CONSTITUTIONAL CONSIDERATIONS: STATE VERSUS FEDERAL ENVIRONMENTAL
                             POLICY IMPLEMENTATION

                                  ----------

                             FRIDAY, JULY 11, 2014

                      House of Representatives,
           Subcommittee on Environment and the Economy,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 9:16 a.m., in
    room 2123, Rayburn House Office Building, Hon. John Shimkus
    (chairman of the subcommittee) presiding.
        Members present: Representatives Shimkus, Gingrey,
    Whitfield, Murphy, Latta, Harper, McKinley, Johnson, Tonko,
    Green, DeGette, McNerney, Barrow, and Waxman (ex officio).
        Staff present: Charlotte Baker, Deputy Communications
    Director; Sean Bonyun, Communications Director; Leighton Brown,
    Press Assistant; Allison Busbee, Policy Coordinator, Energy and
    Power; Jerry Couri, Senior Environmental Policy Advisor;
    Brittany Havens, Legislative Clerk; Kirby Howard, Legislative
    Clerk; David McCarthy, Chief Counsel, Environment and the
    Economy; Tina Richards, Counsel, Environment and the Economy;
    Chris Sarley, Policy Coordinator, Environment and the Economy;
    Jessica Wilkerson, Legislative Clerk; Jeff Baran, Democratic
    Staff Director, Energy and the Environment; Jacqueline Cohen,
    Democratic Senior Counsel; Caitlin Haberman, Democratic Policy
    Analyst; and Ryan Schmit, Democratic EPA Detailee.
        Mr. Shimkus. The subcommittee will now come to order.
        The Chair recognizes myself for 5 minutes for an opening
    statement.
        Before I want to start, I want to recognize Mike Pollock,
    who is our intern from American University. He is in the School
    of Law. Because when I make my opening statement, you will know
    that I didn't write it. I am reading it. So I appreciate his
    work.

      OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF ILLINOIS

        Today's hearing gives us an opportunity to discuss some
    important questions we face as lawmakers. When we create
    policies to protect human health and the environment, when
    should we defer to the States? When should policy be set at the
    national level but implemented at the State level? When should
    it be implemented at the national level?
        At first, different provisions of the U.S. Constitution
    seem to offer different answers, but our job is to reconcile
    those provisions. That harmony will not come if we take the
    easy way out and say, on the one hand, that all these decisions
    are up to the States or, on the other hand, that what the
    Federal Government determines should rule, even right down to
    the most local level, thus making the States mere area offices
    of the Federal Government.
        The Commerce Clause confers enormous power on Congress. Our
    friend, Rob Meltz, a leading constitutional scholar, will tell
    us just how sweeping it is and just how broad our options are.
    But Rob will also help us remember that there is a 10th
    Amendment to our Constitution's Bill of Rights which reads, and
    I quote, ``The powers not delegated to the United States by the
    Constitution nor prohibited by it to the States are reserved to
    the States respectively or to the people.''
        Let's not forget the Bill of Rights was the States' price
    of ratification. In fact, the States themselves created the
    Federal Government, but, in doing so, the States did not
    dissolve themselves.
        So what did the States want from a national Government that
    the Articles of Confederation did not give them? For one, they
    wanted open interstate trade or, and I quote, ``regular
    commerce.'' Their vehicle for achieving this was Congress'
    power to regulate commerce with foreign nations among the
    several States and with Indian tribes.
        During the 1930s, this commerce power was read so broadly
    by the Supreme Court that it seemed to have no bounds. In fact,
    a loaf of bread baked and consumed by a farmer using his own
    wheat was said to be interstate commerce for purposes of
    Congress' power to regulate it.
        By the late 1990s, the Supreme Court began to rediscover
    some limits on the Commerce Clause. The Lopez decision, which
    we will ask Rob Meltz to explain, seemed to focus on Congress'
    power under the law more than on its reach. That case
    established that only economic activity may have a substantial
    effect on interstate commerce to be regulated by the Commerce
    Clause.
        So when we look at environmental policy and commerce
    regulation, we see an interesting mosaic. If someone tosses
    litter out his window, the punishment is entirely between him
    and the county sheriff applying State or local law. But when
    the sheriff records the time of the offense on the citation, he
    uses a time set by the Federal Government under the Standard
    Time Act of 1918, a law our committee amended in 2005 for
    daylight savings.
        Drugs and medical devices, among many others, are regulated
    at the national level, in part because they are important but
    also because, once approved, they need to flow freely in
    interstate commerce. Consumers and the whole economy benefit
    enormously from a single market for these and other products
    that are made in one State, sold in another, and used in still
    others.
        Professor Revesz described this as capturing economies of
    scale. Mass production, which makes so many of our everyday
    goods more economical, is pretty hard to do if each State
    demands its own custom batch.
        Free trade among States leads also to free trade with
    foreign countries. When we work out international trade
    agreements that give our products, such as corn growers, access
    to foreign markets, part of the deal sometimes includes
    allowing those countries access to our markets. That access is
    hollow if States have the option of closing off trade on their
    own. As a prior witness put it, the price of admission to the
    international trade negotiations is ``one country, one voice.''
        So, in my view, where Congress has the inherent capability
    to protect health and the environment, we in Congress should
    defer to them. We in Congress must also have a rationale to
    step in where a State is not constituted to take the steps it
    needs to achieve that protection. And I believe we have a basis
    to step in where impacts are multi-State and doing so will
    facilitate trade in goods and services among States and
    internationally.
        And then there is the middle ground, where either leaving
    the job entirely to the Federal or the State Government is not
    warranted. Sometimes Congress sets national standards to be
    fair among the States but leaves implementation of those
    national standards to the States.
        How stringent such Federal standards should be and whether
    benefits should outweigh the costs are all questions for
    another hearing. For today, we are only asking when should
    Congress consider acting and who should be the regulator. At
    our next hearing on July 23rd, we invite EPA, the States, and
    others to discuss steps to modernize State and Federal
    cooperation. Today, we will focus on the constitutional
    underpinnings of those basic decisions.
        We appreciate all our witnesses appearing today and look
    forward to your testimony.
        [The prepared statement of Mr. Shimkus follows:]

                    Prepared statement of Hon. John Shimkus

        Today's hearing gives us an opportunity to discuss some
    important questions we face as lawmakers. When we create
    policies to protect human health and the environment, when
    should we defer to States? When should policy be set at the
    national level but implemented at the State level? When should
    it be implemented at the national level?
        At first, different provisions of the U.S. Constitution
    seems to offer different answers. But our job is to reconcile
    those provisions.
        That harmony will not come if we take the easy way out and
    say, on the one hand, that all these decisions are up to the
    States or, on the other hand that what the Federal Government
    determines should rule, even right down to the most local
    level, thus making the States mere area offices of the Federal
    Government.
        The Commerce Clause confers enormous potential power on
    Congress. Our friend, Rob Meltz, a leading Constitutional
    scholar, will tell us just how sweeping it is and just how
    broad our options are. But Rob will also help us remember that
    there is a Tenth Amendment in our Constitution's Bill of Rights
    which reads:
        ``The powers not delegated to the United States by the
    Constitution, nor prohibited by it to the States, are reserved
    to the States respectively, or to the People.''
        Let's not forget: the Bill of Rights was the States' price
    of ratification. In fact, the States themselves created the
    Federal Government, but in doing so, the States did not
    dissolve themselves.
        So what did the States want from a national Government that
    the Articles of Confederation did not give them? For one, they
    wanted open interstate trade or ``regular commerce.'' Their
    vehicle for achieving this was Congress' power ``to regulate
    commerce with foreign nations, among the several States, and
    with the Indian tribes.''
        During the 1930s this commerce power was read so broadly by
    the Supreme Court that it seemed to have no bounds. In fact, a
    loaf of bread baked and consumed by a farmer using his own
    wheat was said to be in interstate commerce for purposes of
    Congress' power to regulate it.
        But by the late 1990's the Supreme Court began to
    rediscover some limits on the Commerce Clause. The Lopez
    decision, which we'll ask Rob Meltz to explain, seemed to focus
    on Congress' purpose under the law more than on its reach. That
    case established that only economic activity may have a
    substantial effect on interstate commerce to be regulated by
    the Commerce Clause.
        So when we look at environmental policy and commerce
    regulation we see an interesting mosaic. If someone tosses
    litter out his window, the punishment is entirely between him
    and his county sheriff applying State or local law.
        But when the sheriff records the time of the offense on the
    citation he uses a time set by the Federal Government under the
    Standard Time Act of 1918--a law our Committee amended in 2005
    for daylight savings.
        Drugs and medical devices, among many other goods, are
    regulated at the national level, in part because they are
    important, but also because, once approved, they need to flow
    freely in interstate commerce. Consumers and the whole economy
    benefit enormously from a single market for these and other
    products that are made in one State, sold in another, and used
    in still others.
        Professor Revesz describes this as capturing economies of
    scale. Mass production, which makes so many of our everyday
    goods more economical, is pretty hard to do if each State
    demands its own custom batch.
        Free trade among States leads also to free trade with
    foreign countries. When we work out international trade
    agreements that give our producers, such as corn growers,
    access to foreign markets, part of the deal sometimes includes
    allowing those countries access to our markets. That access is
    hollow if States have the option of closing off trade on their
    own. As a prior witness put it, the price of admission to
    international trade negotiations is ``one country, one voice.''
        So, in my view, where States have the inherent capability
    to protect health and the environment, we in Congress should
    defer to them. We in Congress must also have a rationale to
    step in where a State is not constituted to take the steps it
    needs to achieve that protection. And I believe we have a basis
    to step in where impacts are multi-State or doing so will
    facilitate trade in goods and services among States and
    internationally.
        And then there is the middle ground where either leaving
    the job entirely to the Federal or State Government is not
    warranted: sometimes Congress sets national standards to be
    fair among the States, but leaves implementation of those
    national standards to the States.
        How stringent such Federal standards should be, and whether
    benefits should outweigh the costs, are all questions for
    another hearing. For today, we are only asking when should
    Congress consider acting and who should be the regulator?
        At our next hearing on July 23 we invite EPA, the States,
    and others to discuss steps to modernize State and Federal
    cooperation. Today, we will focus on the Constitutional
    underpinnings of those basic decisions.
        We appreciate all our witnesses appearing today and look
    forward to your testimony.

        Mr. Shimkus. With that, I yield back my time and recognize
    the gentlemen from New York, Mr. Tonko, for 5 minutes.

       OPENING STATEMENT OF HON. PAUL TONKO, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF NEW YORK

        Mr. Tonko. Thank you, Mr. Chair, and good morning.
        Good morning to our witnesses.
        The first hearing held by our subcommittee last February
    was on the same topic that we are going to discuss today, the
    balance between Federal and State authority. As I pointed out
    at the start of that hearing, this issue has been part of our
    national debate since the first Continental Congress. I don't
    expect we are going to resolve that issue today, if ever.
        State and Federal involvement in environmental protection
    has been a part of our history for much longer than the past 70
    or 80 years. Congress established our first national park,
    Yellowstone, in 1872 to protect the unique and beautiful
    landscape and its resources.
        Federal involvement in environmental protection increased
    over the years when it became obvious to the public that
    individual State action was insufficient to protect essential
    common resources that were being severely damaged by pollution
    generated and disposed of by unregulated industrial and other
    human activities. Resources often are not contained within the
    border of a single State, especially air and water resources,
    and pollutants frequently do not respect State boundaries.
        Over the course of this Congress, our subcommittee has held
    hearings on two issues, in particular, that have involved
    questions of whether the States or the Federal Government
    should define the floor of environmental and public health
    protection for citizens: the disposal of coal ash for one, and
    the regulations of chemicals in Congress for another.
        In both cases, the current level of guaranteed Federal
    protection is very low. This is especially true in the case of
    coal-ash disposal, a practice that for all intents and purposes
    is regulated by individual States. The failures of coal-ash
    disposal facilities that communities have experienced in recent
    years and the risk to the air and water resources are a clear
    demonstration of the hazardous situation being created by
    insufficient monitoring and insufficient regulation.
        In the case of chemicals, the Federal law governing
    industrial chemicals has failed to generate basic information
    about hazards and exposure for the vast majority of chemicals
    that we are exposed to each and every day. In fact, we do not
    even have reliable information about how many chemicals are
    actually in use. Very few have been regulated or restricted
    through application of TSCA.
        In the absence of a credible Federal program and in the
    face of evidence of increased exposure and risk of chemicals,
    States have responded to their citizens' demands for action. We
    need Federal laws to set strong standards to ensure all of our
    citizens a basic level of health, safety, environmental
    quality, and opportunity.
        But that does not mean that individual States should be
    prevented from exercising their authority to act on behalf of
    and in response to the desires of their citizens. States should
    be able to go beyond Federal law and offer additional
    protections to address unique situations or to safeguard unique
    resources. And the model of Federal standards-setting with
    State-based implementation has worked well, giving States the
    flexibility to tailor requirements to their specific
    circumstances.
        Through State and Federal environmental programs, we have
    fostered a dynamic economy and a healthy and clean environment.
    We need to build on the progress we have made, and we can do
    that with a strong partnership amongst the Federal Government
    and our States.
        We have a very able and distinguished panel of witnesses,
    and I look forward to your testimony. And I want to thank all
    of you for participating in today's hearing, which will provide
    valuable direction and insight into the issues we address.
    Thank you so much.
        And, with that, Mr. Chairman, I yield back.
        Mr. Shimkus. The gentleman yields back his time.
        Does anyone on the majority side seek time?
        If not, the Chair recognizes the gentleman from California,
    the ranking member of the full committee, Mr. Waxman, for 5
    minutes.

    OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Mr. Waxman. Thank you very much, Mr. Chairman.
        Two weeks ago, we marked a grim milestone. The House of
    Representatives took its 500th anti-environmental vote since
    the Republicans took control. With the Energy and Water
    Appropriations bill on the floor this week, the tally, I am
    sure, is now even higher.
        This hearing examines what the Constitution has to say
    about State and Federal authority to protect the environment.
    Unfortunately, House Republicans appear more interested in
    weakening existing environmental protections than in using our
    constitutional authority to ensure that all Americans, wherever
    they may live, can breathe the air, drink the water, and avoid
    exposure to toxic chemicals.
        In February of this year, a stormwater pipe under a retired
    coal-ash impoundment in North Carolina collapsed. It released
    up to 82,000 tons of coal ash and 27 million gallons of
    contaminated water. The effects of the spill were visible
    across 70 miles of the Dan River, crossing from North Carolina
    into Virginia, and affecting drinking-water sources for the
    citizens of Danville, Virginia, and Virginia Beach.
        This is just the latest coal-ash spill to pollute drinking-
    water sources and damage resources across State lines.
    According to a recent estimate, the economic impacts of this
    spill could exceed $70 million. For the recreation industry
    around Danville, Virginia, the impact could even be more severe
    if the river loses its designation as a scenic river.
        There is no question that water pollution, air pollution,
    and toxic chemicals cause widespread economic harm. It is also
    clear that Congress has the authority under the Constitution
    and responsibility to address risks from pollution. Courts have
    repeatedly upheld environmental statutes as appropriate
    exercises of our commerce power.
        Over the years, Congress and States have developed and
    refined a proven model of cooperative federalism which has
    successfully reduced air and water pollution and ensured the
    public's access to safe drinking water. Under this model,
    Congress sets minimum national standards of environmental
    protection. States may take responsibility for implementing and
    enforcing these standards if their requirements are at least as
    protective as the Federal floor. EPA retains backstop
    enforcement authority, ensuring that every citizen in the
    United States receives a minimum level of protections from
    environmental risks. And States retain the authority to
    establish more protective standards and programs to meet their
    own individual circumstances.
        At a hearing in this subcommittee last year, stakeholders
    told us that protecting the environment through cooperative
    federalism is working. States are implementing over 96 percent
    of the environmental programs that can be delegated by the
    Federal Government to the States. These programs have an
    impressive track record of protecting Americans.
        Despite this record of success, the majority has continued
    to pursue proposals that would upend this proven model,
    although there is no consistency in their approach. A core
    Federal responsibility is protecting one State from pollution
    of another. Well, that makes sense; we have to deal with cross-
    State boundaries, and pollution doesn't respect those
    boundaries. Yet this committee has voted over and over again to
    block EPA regulations that would do exactly this.
        EPA promulgated regulations to reduce power-plant emissions
    that pollute the air in downwind States. Well, that makes
    sense. But the House Republicans voted to block implementation
    of those standards. The States can't deal with it by themselves
    if they are subject to downwind pollution, so they have to look
    to the other State to cooperate.
        EPA issued standards to reduce mercury and other toxic air
    pollutants from power plants. That pollution crosses State
    boundaries and is a national problem. Our Republican majority
    voted to block those important public health standards, as
    well.
        This hearing should remind us again that protecting public
    health and the environment works best when both the Federal
    Government and State Governments contribute. If not, polluting
    industries will play one State off another so that every State
    is forced to reduce their pollution protection for their
    citizens for fear that they will lose the jobs and industry
    will locate elsewhere.
        Thank you, Mr. Chairman, for this opportunity to make this
    opening statement.
        Mr. Shimkus. The gentleman yields back his time, and I
    thank the gentleman.
        Now we are going to go right to our panel. I will do an
    introduction, and then I will turn to you for your opening
    statement. I will do an introduction of the whole panel.
        First of all, we have Robert Meltz. He is with the American
    Law Division of the Congressional Research Service, a service
    that we rely on a lot. And we appreciate you being here. Jon
    Adler, who is a professor of law at Case Western School of Law.
    We have Richard Revesz, who is from New York University School
    of Law. Thank you, sir. And Rena Steinzor, who is a professor
    at the University of Maryland School of Law. She has been here
    numerous times, and we thank her for coming back.
        The ranking member helped set this debate, and I appreciate
    his comments. Again, what we asked was, when should Congress
    consider acting, and who should be the regulators, the question
    we posed.
        With that, I will start with Mr. Meltz. Sir, your full
    statement is entered into the record, and you have 5 minutes.
        And hit the microphone, and then pull it close so that it
    can get to the transcriber.
        Mr. Meltz. Is it on now?
        Mr. Shimkus. Yes, but pull it close like you want to eat
    it.

    STATEMENTS OF ROBERT MELTZ, LEGISLATIVE ATTORNEY, CONGRESSIONAL
      RESEARCH SERVICE; JONATHAN H. ADLER, JOHAN VERHEIJ MEMORIAL
      PROFESSOR OF LAW AND DIRECTOR, CENTER FOR BUSINESS LAW AND
      REGULATION, CASE WESTERN UNIVERSITY SCHOOL OF LAW; RICHARD
     REVESZ, LAWRENCE KING PROFESSOR OF LAW AND DEAN EMERITUS, NEW
     YORK UNIVERSITY SCHOOL OF LAW; AND RENA STEINZOR, PROFESSOR,
    UNIVERSITY OF MARYLAND SCHOOL OF LAW, AND PRESIDENT, CENTER FOR
                           PROGRESSIVE REFORM

                       STATEMENT OF ROBERT MELTZ

        Mr. Meltz. Mr. Chairman and members of the subcommittee,
    CRS is pleased to assist the subcommittee with its inquiry into
    the appropriate allocation of responsibilities in Federal
    environmental programs between Federal and State Governments.
        I am an attorney with the American Law Division of CRS,
    where I specialize in environmental law. I am going to
    summarize my formal statement, reviewing the constitutional
    constraints imposed on Congress by current Commerce Clause and
    10th Amendment jurisprudence in crafting environmental
    legislation.
        To cut to the chase, the Commerce Clause and the 10th
    Amendment, as currently construed by the Supreme Court, impose
    as a practical matter few significant constraints on Congress'
    legislating in the environmental area. I will start with
    Congress' power to regulate commerce among the several States,
    the basis of not only most Federal environmental laws but also
    much of the social and economic legislation enacted by
    Congress.
        Supreme Court decisions hold that Congress' commerce power
    allows it to regulate the channels and the instrumentalities of
    interstate commerce and, by far the most debated category,
    activities, even intrastate activities, that substantially
    affect interstate commerce either individually or in the
    aggregate.
        The Court has strongly suggested that only economic
    activity may be aggregated to show a substantial effect on
    interstate commerce, but what is economic is very broadly
    construed--not so broadly, however, as to have kept the Court
    from invalidating congressional enactments in 1995 and 2000,
    triggering speculation that certain Federal environmental laws
    might being on precarious constitutional footing, though in
    2005 the speculation subsided a bit when a Supreme Court
    decision stressed that even noneconomic intrastate activity can
    be regulated by Congress if failure to do so would undercut
    interstate regulation.
        Federal environmental laws, by and large, have fared well
    against Commerce Clause challenges. After the Supreme Court's
    decisions in 1995 and 2000, the vulnerabilities were suggested
    in the non-intrastate applications of several of these laws:
    the Clean Air Act, the Clean Water Act, the Safe Drinking Water
    Act, the Superfund Act, and the Endangered Species Act. Yet the
    overwhelming majority of Commerce Clause challenges to Federal
    environmental laws were rejected by the lower courts, six out
    of six in the case of the Endangered Species Act, all with cert
    denials by the Supreme Court.
        Some of these decisions arguably are hard to reconcile with
    the Supreme Court's Commerce Clause jurisprudence. To hazard a
    theory, it may be that the courts implicitly recognize the
    nationwide interconnectedness of environmental problems and the
    consequent need for broad Federal involvement. Or perhaps the
    courts simply are not ready to chip away at Federal
    environmental laws on the chance it would open to Commerce
    Clause attack other areas of Federal law, such as the civil
    rights laws and criminal laws.
        Turning to the 10th Amendment, that amendment says that the
    powers not delegated to the Federal Government are reserved to
    the States or to the people. During the same period when the
    Court was setting out Commerce Clause limits on Federal power,
    it came to see in the 10th Amendment a bulwark of State
    sovereignty. Supreme Court decisions during this time, the
    1990s, held that Congress can compel actions of State
    legislatures or actions of State executive branch officials in
    their sovereign capacity.
        At the same time, the Supreme Court has been explicit that
    Congress may constitutionally encourage, though not compel,
    States to participate in Federal environmental programs.
    Congress may attach conditions on States receiving Federal
    money, with some constraints. Congress may offer States a
    choice between regulating according to Federal standards or
    having State law preempted by Federal regulation or having a
    Federal plan imposed, as by EPA.
        Congress also may authorize sanctions triggered by State
    inaction but applying solely to private activity, such as the
    emission offset sanction in the Clean Air Act. And the 10th
    Amendment is not implicated when the State itself engages in an
    activity that Congress legitimately may regulate, as when a
    county operates a solid-waste landfill. As with the Commerce
    Clause, 10th Amendment challenges to Federal environmental laws
    have rarely succeeded.
        So, in sum, Federal environmental programs largely have
    withstood both Commerce Clause and 10th Amendment challenge.
    And, barring a shift in the jurisprudence, the key
    considerations in how to divide Federal and State
    responsibilities in a Federal environmental program are likely
    to fall in the policy realm rather than the constitutional one.
        Thank you for the opportunity to testify, and I look
    forward to your questions.
        [The prepared statement of Mr. Meltz follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Shimkus. Thank you, sir.
        The Chair now turns to Mr. Adler. Sir, you are recognized
    for 5 minutes.

                     STATEMENT OF JONATHAN H. ADLER

        Mr. Adler. Thank you, Mr. Chairman and members of this
    committee. I appreciate the opportunity to address the
    constitutional constraints on environmental regulation, a
    subject which I have studied now for close to 2 decades.
        It is a fundamental principle of our constitutional order
    that the Federal Government is one of limited and enumerated
    powers, and those powers not delegated to the Federal
    Government are reserved to the States and to the people.
        All Federal laws, no matter their value or purpose, must be
    enacted pursuant to the Federal Government's enumerated powers
    and may not transgress other constitutional constraints. This
    is true whether we are talking about national security, health
    care, or environmental protection.
        While Federal power is broad--and it certainly is,
    especially as interpreted by the Court's precedents--it is not
    infinite. The Supreme Court has made clear, including in very
    recent cases such as NFIB v. Sebelius and in the unanimous
    judgment this spring in Bond v. United States, that it will
    enforce limits on Federal power, it will invalidate laws that
    exceed those constitutional limits, and it will also construe
    statutes narrowly if that is necessary to avoid difficult
    constitutional questions--something the Supreme Court has done
    twice with the Clean Water Act when regulations reaching
    wetlands and intrastate waters pushed the bounds of Federal
    authority to regulate commerce among the States.
        Several environmental statutes and regulations, both on the
    books and proposed, raise serious constitutional questions that
    courts will have to address in the wake of decisions like NFIB,
    and these are also questions that Congress should consider.
    Because whether a statute or a regulation is constitutional is
    not solely a question for the courts; it is also a question for
    the legislative branch and something the legislative branch
    should consider when evaluating proposals for legislation.
        Now, constitutional limits on Federal power need not come
    at the expense of environmental protection. The division of
    authority between the Federal and State Governments counsels
    that Congress think careful about the nature and scope of
    Federal environmental regulation. Fiscal constraints and the
    inherent limits of centralized regulatory structures reinforce
    the wisdom of focusing Federal efforts on those areas where the
    Federal Government may do the most good.
        The EPA cannot and should not try to address every
    environmental problem or concern that this Nation faces. It has
    neither the time nor the resources to do so. The Federal
    Government should instead concentrate its efforts in those
    areas where the Federal Government has a comparative advantage
    or where the separate States are unlikely to be able to address
    environmental concerns adequately.
        This is true in the case of interstate spillovers. This is
    true in cases where there are serious economies of scale in
    Federal interventions. It is not true in the context of
    localized environmental problems that have relatively localized
    causes and localized effects. And if one looks at the U.S.
    Code, that describes much of Federal environmental regulation.
        When it comes to developing and enforcing environmental
    standards for localized environmental concerns, the case for
    Federal intervention is comparatively weak. And if we want the
    Federal Government to do more to address things like interstate
    spillovers where there are economies of scale, we have to think
    seriously about what we might take off the EPA's plate so that
    it has the time and the resources to address these new and
    emerging problems.
        And it is not coincidental that the Constitution constrains
    Federal efforts to reach some localized environmental concerns.
    There are some environmental problems that are very real but
    that do not contain the necessary connection to commerce or to
    other nexuses of Federal power to justify the exercise of
    Federal regulatory authority.
        Again, however, constitutional constraints need not
    compromise environmental protection any more than
    constitutional constraints compromise our Nation's ability and
    efforts to protect our national security or advance other
    important goals.
        Insofar as the Constitution encourages policymakers to
    think carefully about the comparative strengths and weaknesses
    of Federal intervention, it may actually enhance this Nation's
    system of environmental protection, as it helps ensure that
    Federal resources are focused and targeted in those areas where
    Federal intervention can do the most good.
        Thank you again for your invitation today, and I look
    forward to any questions you might have.
        [The prepared statement of Mr. Adler follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Shimkus. Thank you.
        And the Chair now recognizes Mr. Revesz for 5 minutes.

                      STATEMENT OF RICHARD REVESZ

        Mr. Revesz. Thank you, Mr. Chairman and members of the
    subcommittee. I am Richard Revesz from the New York University
    School of Law. I also serve as the director of the American Law
    Institute.
        I have written extensively in the area of federalism and
    environmental regulation, mostly in the matter of the policy
    domain, when should Congress act when it has the power to do
    so. I have not written as extensively in the constitutional
    domain but generally share the views of Mr. Meltz that the
    constitutional limits, while they definitely exist, leave a
    great scope of--a great domain for action from Congress. So
    many of the important questions are questions of when Congress
    should decide to exercise that authority, rather than does
    Congress actually have that authority.
        Mr. Shimkus. Excuse me. Could you make sure your mike is on
    and that it is pulled close to you?
        Mr. Revesz. I am sorry.
        Mr. Shimkus. That is OK. We have some old guys up here, and
    I could hear you fine, but----
        Mr. Revesz. I will focus on three matters in this
    testimony.
        First, the presence of interstate externalities provides
    the most compelling argument for Federal regulation. A State
    that sends pollution to another State obtains the labor and
    fiscal benefits of the economic activity that generates that
    pollution but does not suffer the full cost of the activity
    because the adverse health and environmental consequences are
    suffered by other States. As a result, a suboptimally large
    amount of pollution crosses State lines.
        But the fact that some form of Federal regulation is
    necessary to properly control interstate externalities does not
    mean that any type of Federal regulation is well-suited for the
    task. The Clean Air Act provides a compelling example of this
    problem. Even though it has been in effect since 1970, we still
    have not properly succeeded at controlling interstate
    pollution.
        Let me give you two bookends. The first significant
    litigated case in this area was Air Pollution Control District
    of Jefferson County v. EPA and was decided by the Court of
    Appeals for the Sixth Circuit in 1984. Interestingly, at that
    time, Mitch McConnell, the current Senate minority leader, was
    the judge/executive for Jefferson County, Kentucky, which
    brought this action to try to compel Indiana to reduce its
    interstate externalities.
        Kentucky actually controlled its local power plant very
    stringently, and that power plant had at the time spent $138
    million in pollution control, which would be more than $300
    million in today's dollars. But Jefferson County, despite
    having done that, was not able to obtain the benefits of the
    regulation because prevailing winds from Indiana deposited in
    Jefferson County pollution from an Indiana plant that was
    essentially uncontrolled. The Kentucky plant emitted 1.2 pounds
    of sulphur dioxide per million BTU of heat input, and the
    Indiana plant emitted 6 pounds--five times as much.
        Jefferson County was actually unsuccessful in that case in
    its effort to compel the U.S. Environmental Protection Agency
    to order the reduction in the Indiana emissions. And, in fact,
    it wasn't until more than 30 years later, until this past
    April, when the U.S. Supreme Court, in EPA v. EME Homer City
    Generation, held that under the good-neighbor provision of the
    Clean Air Act the pollution control burden to upwind and
    downwind States could be allocated in a way that minimized the
    overall cost of meeting the Federal ambient standards.
        This cost-minimization formula strikes me as eminently
    rational, and the court decided this on a six-two vote. If this
    rule had been in effect in 1984, then-Judge/Executive Mitch
    McConnell's citizens would have gotten the Federal redress that
    they had sought and that they actually deserved.
        My second point: The issue of interstate externalities is
    now being raised by a more recent environmental problem arising
    from hydraulic fracturing, or fracking, which is a technique
    used to extract oil and natural gas from shale.
        Some of the environmental ills from fracking, such as
    increased seismic activity and groundwater contamination, are
    localized. But at least one significant consequence of
    fracking, the emission of fugitive methane, can wreak harm far
    from the wellhead. Fugitive methane's interstate and, indeed,
    international impacts make it particularly well-suited for
    Federal regulation.
        Methane, as you know, is a potent greenhouse gas with an
    estimated global-warming potential 21 to 25 times greater than
    that of carbon dioxide. Natural gas itself is composed of more
    than 80 percent methane, and, during the production and
    distribution processes, some portion of methane leaks or is
    vented into the atmosphere. While fugitive methane emissions
    can result from all drilling techniques, some studies suggest
    that fracking is associated with significantly higher leakage
    rates.
        Like carbon dioxide, methane emissions become well mixed in
    the upper atmosphere, making their harmful effects global
    rather than local.
        The U.S. Environmental Protection Agency recently began the
    process of regulating greenhouse gas emissions associated with
    the ultimate combustion of natural gas by proposing performance
    standards for new and existing power plants. Those standards,
    however, will do nothing to reduce pollution emitted at earlier
    stages in the gas' life cycle, including extraction,
    processing, storage, and delivery. Such upstream emissions can
    be quite significant, accounting for 20 to 30 percent of the
    natural gas life cycle emissions.
        My last point refers to a related question: When, if ever,
    should the Federal Government preempt more stringent State
    standards?
        So the most compelling argument for doing that is in the
    case of product standards where there are products that exhibit
    significant economies of scale in production. If these products
    were subjected to inconsistent State standards, those economies
    of scale would be lost.
        And the most compelling example of this case are
    automobiles. And, in fact, for the most part, we do have
    uniform auto standards. In fact, we have two in the country; we
    have the Federal standards, and we have the California
    standards, and States can opt for one or the other but can't
    choose anything in between.
        There are other products that exhibit significant economies
    of scale in production, but not all products do. And where
    products don't exhibit those economies of scale, the argument
    for Federal preemption of more stringent State standards is
    much weaker.
        The argument for Federal preemption of more stringent State
    standards is even weaker in the case of----
        Mr. Shimkus. We are going to have to get you to wrap up.
        Mr. Revesz. Yes, I----
        Mr. Shimkus. I know you are very close.
        Mr. Revesz. I am done, basically.
        In the case of process standards, because inconsistent
    process standards do not impede the proper trading of products
    in a national market.
        And, with that, my summary is done, and I am happy to at
    some point take your questions.
        [The prepared statement of Mr. Revesz follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Shimkus. Thank you, sir.
        Now we will turn to Rena Steinzor, a professor from the
    University of Maryland.
        Welcome back, and you are recognized for 5 minutes.

                       STATEMENT OF RENA STEINZOR

        Ms. Steinzor. Mr. Chairman, Ranking Member Tonko, and
    members of the subcommittee, I appreciate the opportunity to
    testify today on cooperative federalism, which is the term used
    to describe----
        Mr. Shimkus. Can you check your mike also or pull it
    closer?
        Ms. Steinzor [continuing]. The constitutional and the
    political policy and legal relationship between the Federal and
    State Governments with respect to environmental policies and
    law.
        As I understand the situation, the subcommittee's
    leadership called this hearing in part to explore the
    contradiction between the notion that legislation to
    reauthorize the Toxic Substances Control Act should preempt any
    State authority to regulate chemical products with the notion
    that the Federal Government should depend on the States to
    regulate coal ash and has no role to play in protecting the
    public from such threats.
        These positions are a dichotomy if there ever was one. The
    contradictory ideas that the Federal Government must dominate
    the field in one area but that State Government should be
    exclusively in control in another seems irreconcilable as a
    matter of principle.
        Of course, as a practical matter, these irreconcilable
    positions have consistent pragmatic outcomes: They help big
    business. The chemical industry feels much more confident about
    its ability to browbeat the EPA into quiescence under the weak
    provisions of the TSCA legislation under discussion so long as
    proactive States like California are knocked out of the
    equation. The electric power industry is much happier
    submitting to State regulators, who, as the recent spill in
    North Carolina clearly illustrates, have done almost nothing to
    control the severe hazards of improper coal-ash disposal. Or,
    in other words, States should prevail as long as they aren't
    doing much to gore the ox of big business.
        This debate has been going on in one iteration or another
    for decades. Congress has grappled with it. The Supreme Court
    has grappled with it. The States have participated in the
    debate, as has the executive branch. And out of all this
    intense debate have come two fundamental principles well-
    recognized by mainstream constitutional scholars:
        One, the wide range of Federal programs dealing with
    health, safety, and the environment are grounded appropriately
    in the Commerce Clause. While the Supreme Court has imposed
    some limits on Federal authority, they do not apply to the
    structure of Federal environmental law.
        Two, a coherent set of eminently reasonable principles
    defines the cooperative partnership that prevails in the
    health, safety, and environmental areas.
        So what are those principles? As everyone has said,
    pollution does not stop at State lines, and, in many cases,
    strong Federal laws are the only way to control so-called
    transboundary pollution. My State, Maryland, suffers
    tremendously from transported pollution from Ohio. Coal-fired
    power plants is just one example. We actually send a plane up
    every time those emissions increase because the State agency is
    so anxious to demonstrate that it can't control this pollution.
        But there are other principles. A second one is that
    uniform national standards crafted by the Nation's best and
    brightest technical experts are efficient, avoiding the need to
    reinvent the wheel 50 times.
        A third and very important one is that all citizens should
    receive equal protection under the law. That is, everyone
    should be able to expect a minimal set of effective safeguards
    no matter what State they happen to live in.
        Businesses should compete on a level playing field. If they
    operate in States that choose strong protections, they should
    not be undercut by businesses operating in States that choose
    weak protections. And States should avoid a race to the bottom
    in competing for new industry.
        It is easy to write a law, as you know, and much harder to
    make sure it is implemented and enforced fairly and
    aggressively throughout our vast country. Governments at all
    levels struggle to be effective and efficient and must remain
    accountable to their citizens. In areas as important as
    protecting public health and the environment, everyone, no
    matter where they live, deserves equal protection. Making
    States responsible for delivering on this crucial goal is a key
    part of EPA's mission.
        Thank you.
        [The prepared statement of Ms. Steinzor follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Shimkus. Thank you, Ms. Steinzor.
        I am going to start just by making a statement. You made
    some assumptions as to why or why we didn't call this hearing,
    but I don't remember you ever asking me, the chairman of the
    subcommittee, why I called it. So just in future times you come
    before us, if you want to know why, come ask me. Don't make an
    assumption and weave a story that may or may not be true.
        Mr. Meltz, for nonlawyers like me, could you please explain
    the difference between the Supremacy Clause and the Commerce
    Clause and how preemption in Federal environmental law is
    constitutionally based?
        Mr. Meltz. Well, the Supremacy Clause in Article 6 says
    that the Federal law is the supreme law of the land, so that
    when there is a conflict, either express or implied or in fact,
    the non-Federal law has to give way to the Federal
    prescription.
        Preemption considerations arise in just about every Federal
    environmental law I have ever encountered. In fact, I have a
    CRS report compiling all the preemption provisions in all the
    environmental statutes, and they run the gamut from total
    preemption--a State cannot act, and there is no waiver even--
    all the way to the other extreme, where the State has complete
    freedom to do what it wishes, whether or not the Federal
    Government acts.
        So, depending on the circumstances, Congress has seen the
    full gamut of possibilities appropriate.
        Mr. Shimkus. Hence the dilemma and why we have you here
    today, to help us try to figure out that.
        Professor Adler, how is it that in some ways an historical
    accident--that is, leadership in environmental policy--was
    supplanted by Federal regulation?
        Mr. Adler. That is a long subject, and----
        Mr. Shimkus. Well, don't be too long.
        Mr. Adler. Yes. And given that I live in Cleveland, it is a
    somewhat of a, I guess, a personal subject given that an
    infamous fire on the Cuyahoga River is often credited with
    helping to drive the enactment of many Federal environmental
    statutes.
        And just to use as an example, that event in June of 1969
    was seen as evidence that most measures of environmental
    quality were getting much worse, that State and local
    governments were not acting, and that, therefore, Federal
    intervention was necessary.
        But when one looks at the historical record, that, in fact,
    isn't true. If one just looks at the case of river fires, river
    fires on the Cuyahoga River, in Michigan and Pennsylvania and
    Maryland, all throughout the country, had actually at one point
    been common throughout the late 19th and early 20th century.
    Rivers used for industrial purposes were often dumping grounds
    for various flammable and other wastes. And it was a problem
    that was easily identified and one that State and local
    governments readily addressed.
        If one looks at water pollution more generally, one sees
    that States in the 1960s were becoming very active in enacting
    water pollution control statutes. We see a similar pattern in
    air. California, in particular, was quite aggressive. And
    measures of things like ambient air quality for the pollutants
    with the greatest health effects that were understood at the
    time were actually declining before Federal environmental
    statutes were enacted.
        So whether we think these Federal environmental statutes
    are good or bad as a matter of policy, the general story that
    we tell, that they were necessary to stem a precipitous decline
    in environmental quality that was occurring in the late 20th
    century, just doesn't square with the actual historical record.
        Mr. Shimkus. So is it safe to say that it is under your
    opinion that the environmental policy might be improved if
    States regained a more historic role?
        Mr. Adler. Sure. I think that if both State Governments and
    the Federal Government are able to focus on those areas where
    they have comparative advantage, we would improve the overall
    levels of environmental protection. It would be both more
    efficient and more effective.
        In areas like interstate spillovers, as has already been
    discussed, the downwind State can't do anything about an upwind
    State's pollution. And as we look at the history of things like
    the Clean Air Act, those sorts of concerns have been the focus
    of a tiny fraction of EPA's time and effort and a tiny fraction
    of what is actually in the U.S. Code.
        And if we stood back and actually tried to rationalize
    where is Federal intervention truly necessary and where can
    State and local governments take the lead, I think we would
    have a more rational, more efficient, less costly, and more
    effective approach to environmental protection.
        Mr. Shimkus. Thank you.
        Professor Revesz, you noted at the end of your statement
    about the national fuel efficiency standard for cars,
    California differently from other States, but you did not seem
    to defend the decision with the policy on constitutional
    rationale. Do you have one?
        Mr. Revesz. The decision for California to have different
    standards than the Federal standards?
        Mr. Shimkus. Yes, sir.
        Mr. Revesz. It is a historical accident. I mean, clearly,
    Congress has the authority to allow States to do that. I don't
    think there is any serious constitutional argument that somehow
    or other once the Federal Government acts it needs to preempt
    more stringent State standards.
        The reason the California standards are more stringent is
    because in 1970, when the Clean Air Act was enacted, California
    already had State standards for automobiles, and Congress
    decided not to preempt those standards and did it as a matter
    of policy. And it was actually not----
        Mr. Shimkus. Yes, let me just jump in. Do you think it is
    fair for Congress to discriminate among States in its
    regulation of trade in the same articles?
        Mr. Revesz. Well, as a practical matter, Congress gave
    other States the choice to choose the California standards or
    the Federal standards. So, basically, every State could do
    something. It is true that they couldn't pick other standards.
        But I think Congress had good reason for doing that, and I
    think it is definitely constitutional for Congress to do it. I
    don't think there is a serious constitutional argument that
    would stand in the way of Congress making those distinctions if
    it thought that they were good as a matter of policy. They
    would need to think they are good as a matter of policy for
    this to actually be a good idea.
        I think in that particular case, given the history of that
    provision, it made sense for Congress in 1970 to do what it
    did. And it was not a controversial issue then; there was
    strong bipartisan support for that provision.
        Mr. Shimkus. Great. Thank you.
        The Chair now recognizes Mr. Tonko for 5 minutes.
        Mr. Tonko. Thank you, Mr. Chair.
        On many issues within this subcommittee's jurisdiction, the
    States have led the way. When risks are not adequately
    addressed at the Federal level, State protections are
    essential. My home State of New York has taken significant
    steps to protect its citizens and its resources from DDT, MTBE,
    flame retardants, risks posed by hydraulic fracturing, or
    fracking.
        I served in the New York State Assembly for some 25 years,
    so I have a strong appreciation for the work of State
    Governments to protect the environment. But there is also an
    important role for the Federal Government in environmental
    protection, ensuring a minimum level of protection for all
    citizens. A cooperative approach, where the Federal Government
    sets a floor and States remain free to set more stringent
    standards, has proven effective and successful.
        Ms. Steinzor, can you briefly describe the principles of
    cooperative federalism in environmental law, please?
        Ms. Steinzor. Yes.
        Environmental law has set up a system where the States can
    apply to be delegated to have authority to implement the law.
    As was mentioned earlier, 96 percent of the environmental
    programs covered by these laws have been delegated to the
    States.
        So EPA sets the Federal standards by which we operate, and
    then the States implement the law. Most of these laws say the
    States can enact more stringent provisions if they want to. And
    the States also receive financial support for implementing
    their programs.
        Because the States are volunteering to do this, there are
    no constitutional impediments. The main impediment,
    constitutionally, is that the Federal Government is not allowed
    to commandeer a State Government's resources. And we saw that
    in the New York v. United States case that I mentioned in my
    written testimony.
        Mr. Tonko. Uh-huh.
        Ms. Steinzor. So what we have is a situation where the
    States and the Federal Government have gotten married, and,
    like most marriages, there are points of friction and
    differences. I am not going to pretend that these partnerships
    are always happy, especially when there is money lacking. And I
    think that is a problem at both the Federal- and the State-
    level resources.
        Mr. Tonko. Thank you.
        Have recent proposals from this committee comported with
    those principles?
        Ms. Steinzor. I actually do not think that the effort to
    preempt all State law under the Toxic Substances Control Act is
    consistent with those principles. The Toxic Substances Control
    Act is implemented primarily by EPA, but States are allowed to
    do more stringent laws, as you just mentioned.
        And the States resent become being preempted precisely
    because of what Professor Adler said, which is that they want
    to make sure that they are not following a one-size-fits-all,
    they want to tailor the requirements, and so they home in on
    problems that are specific to their State and take whatever
    action they think appropriate.
        And you have a letter from attorneys general in several
    States that is attached to my written testimony that explains
    these principles.
        Mr. Tonko. Uh-huh.
        Well, I was particularly concerned by the preemption
    provisions in the majority's draft bill to amend TSCA, as you
    focused on that issue. The draft bill could have had widespread
    impacts on State laws, including laws on fracking. More than 20
    States have new enacted laws or regulations requiring some
    level of public disclosure of the chemical contents of
    hydraulic fracturing fluids. Other States have successfully
    imposed requirements for groundwater testing and restrictions
    on disposal of flow-back water and even prohibitions on the use
    of certain chemicals.
        Ms. Steinzor, does the Commerce Clause require that
    preemption?
        Ms. Steinzor. Absolutely not.
        Mr. Tonko. Is there any constitutional provision that
    necessitates that preemption?
        Ms. Steinzor. Absolutely not.
        Mr. Tonko. Do you have concerns about the effects of broad
    preemption in TSCA reform on State fracking laws and other
    environmental protections?
        Ms. Steinzor. Yes, I do. I think that it would be extremely
    unwise to stifle the States in this way and that actually
    preempting them in such a harsh manner contradicts all the
    other discussion about letting them have a greater role in
    environmental protection. Right now, we have a cooperative
    partnership. This would make the partnership completely one-
    sided and kick them out of the field.
        And fracking is just an example of an emerging problem
    where they have been able--as we have called them in the past,
    laboratories of democracy--they have been able to step forward
    and be creative and lead the way for the Federal Government.
        Mr. Tonko. Thank you very much.
        I yield back.
        Mr. Shimkus. The gentleman yields back his time.
        For the sake of keeping peace on my side, the Chair is to
    recognize Mr. Whitfield, but I am going to ask unanimous
    consent that the gentleman from West Virginia go out of order
    for his 5 minutes. Is there objection?
        OK. The Chair recognizes the gentleman from Kentucky.
        Mr. Whitfield. You all are so nice. Thank you very much.
        Well, I would like to thank the panel for being here today.
        And I am going to approach this a little differently. As
    you know, President Obama has been under a lot of criticism
    lately of deciding which laws he will try to prosecute and
    which laws he will not prosecute. And, as you know, the House
    of Representatives now is considering a lawsuit, but because of
    the standing issue, it is very difficult to bring those
    lawsuits on the behalf of Congress as an institution.
        But what made me think a little bit about this was Ms.
    Steinzor, in her opening statement, talked about the
    unreconcilable positions that Congress is in right now as it
    approaches reauthorization of TSCA, doing one thing, and
    addressing the coal-ash-regulation issue by doing another
    thing. And she said that the only--to read her language here,
    ``They have consistent pragmatic outcomes. These are
    unreconcilable positions, and the only outcome is that they
    help big business.'' So the assumption here is that the
    Republican Congress is doing this because it helps big
    business.
        Well, it raised an issue with me, in that she is talking
    about two laws here, that we have not reauthorized TSCA yet,
    and we have not been able to pass legislation the way we would
    like to on coal ash yet by the Congress.
        But the Migratory Bird Act, for example, is a Federal law,
    and there is a Federal law that protects golden eagles and bald
    eagles. And yet this administration, with the spill in the Gulf
    in the latter part of the Bush administration, the Federal
    Government instituted a fine of $100 million against British
    Petroleum for killing migratory birds in that spill. And yet
    this administration has granted an exemption from the Migratory
    Bird Act and the Golden and Bald Eagle Protection Act to
    windmills.
        So it appears that this administration, rather than just
    being in favor of big business in general, it is determined
    upon whether or not they like the big business. And, for
    example, Google is a large company that is taking advantage of
    some Federal tax codes to invest in the wind industry.
        And so, for this administration to basically say we are not
    going to enforce, we are going to grant exemptions to certain
    big businesses from the Migratory Bird Act and the Golden and
    Bald Eagle Protection Act--I would ask if any of you would like
    to make a comment on that, how this administration has--we have
    two Federal laws, and this administration has affirmatively
    said we are going to grant exemptions from these Federal laws
    for certain industries that we agree with what they are doing.
        You don't have to comment.
        Mr. Shimkus. You can offer to answer it, or you can pass.
        Mr. Adler. I will just say briefly that, as a general
    matter, if the executive branch believes that certain
    industries or activities should be exempt from Federal
    regulation, as it is currently written, they should either, if
    it is legal, redraft the existing regulations and repromulgate
    them or they should ask Congress to amend the law, and that
    disparate application of existing laws and regulations to
    different industries based on their political or other
    characteristics is not the sort of thing any executive branch
    should engage in.
        Mr. Shimkus. The gentleman from Kentucky?
        Mr. Whitfield. I yield back.
        Mr. Shimkus. The gentleman yields back the time.
        The Chair now recognizes the gentleman from Texas, Mr.
    Green, for 5 minutes.
        Mr. Green. Thank you, Mr. Chairman, for holding the hearing
    today on this important issue.
        I would like to also thank our distinguished panelists for
    joining us this morning.
        States play an essential role in environmental regulation,
    creating specific requirements to reflect the reality of
    circumstances in each State. But there is an important role for
    the Federal Government as a partner.
        Like my colleague from New York, I served 20 years in the
    State legislature in Texas and am familiar with our
    relationship with EPA and TCEQ. I used to joke, it must be in
    Texas' DNA to complain about the EPA literally from my first
    term in 1973. But this issue, it has been cooperative.
        In fact, one of my frustrations 2 years ago, that the State
    of Texas decided not to issue carbon-based permits because of
    politics, and so we ended up having them issued through EPA,
    which delayed those permits months, if not years. We are
    working through that backlog. The most recent legislative
    session corrected that. And so now our Texas Environmental
    Quality Commission is actually doing what they should be doing,
    because it is a cooperative basis.
        Mr. Meltz, do you agree that, generally, environmental
    regulation is done in a partnership with States and the Federal
    Government?
        Mr. Meltz. I agree that that has been the pattern of
    Federal enactments, and----
        Mr. Green. OK. Yes, generally, EPA sets some standards, and
    the State then negotiates with the EPA on how they can reach
    those standards.
        Mr. Meltz. With many of the statutes, not all, yes.
        Mr. Green. Is there anything in the Constitution or caselaw
    that says regulation can't be done that way, as a partnership?
        Mr. Meltz. Nothing in the Constitution, no.
        Mr. Green. OK.
        I would like to turn a minute to the Superfund statute,
    which has played an important role in our district in cleaning
    up the San Jacinto Waste Pits. Our office has worked with both
    the State of Texas and Harris County and EPA to get that site
    listed on the national priority list. And, most recently, we
    sent a letter to EPA calling for more environmental protective
    remediation to be taken at the site. This is a clear example of
    local and Federal officials working together to protect a local
    community and ensure that taxpayers don't bear that cleanup
    cost.
        Mr. Meltz, in your testimony, you mentioned that challenges
    have been brought alleging that Superfund and other
    environmental statutes were not authorized by the Commerce
    Clause. Is that correct?
        Mr. Meltz. Yes. That has been--yes. Several statutes.
        Mr. Green. OK. And courts have found these statutes,
    including Superfund, are constitutional, correct?
        Mr. Meltz. Yes. The one exception has been the challenges
    to the Corps and EPA, expansive definition of waters of the
    United States under the Clean Water Act to include isolated
    waters and remote adjacent wetlands, yes.
        Mr. Green. OK.
        You know, again, my experience, both as a State legislator
    and in Congress, when there was a need for a Superfund site, I
    was actually first approached by the State of Texas. And I know
    there were some issues a few months ago in Congress about, you
    know, the States not being a part of it. Believe me, we have a
    dioxin facility that was there before we had an EPA. And our
    States are typically the ones that are more proactive, at least
    in Texas.
        Now turning to Ms. Steinzor, do you agree that the
    constitutional footing of the Superfund is strong?
        Ms. Steinzor. The--I am sorry, sir.
        Mr. Green. The constitutional footing of the Superfund----
        Ms. Steinzor. Yes.
        Mr. Green [continuing]. Is strong.
        Ms. Steinzor. I do agree to that.
        Mr. Green. OK. I have a few questions for Mr. Revesz.
        Mr. Revesz, in your testimony, you agreed that it is
    prudent policy of the Federal Government to preempt State
    regulation on goods that exhibit significant economies of scale
    and production, such as cars and pesticides.
        Mr. Revesz. That is right.
        Mr. Green. OK. Do you believe that industrial chemicals
    such as those that are regulated under the Toxic Substance
    Control Act also exhibit significant economies of scale and
    production?
        Mr. Revesz. It is an empirical question. Many probably
    don't. Some might.
        And I think to justify preemption and to display State
    autonomy, to display the State's ability to protect their
    citizens at a level that is more stringent than what the
    Federal Government can do nationwide is a big decision and
    should only be done if the empirical evidence is very
    compelling.
        I believe, in the case of cars, it is quite compelling, and
    Congress has acted accordingly since 1970. I don't think it is
    compelling in the case of every product.
        I don't think it is compelling in the case of every product
    that is regulated under the Toxic Substance Control Act. So I
    don't think that across-the-board preemptions without empirical
    justification would be justified.
        Mr. Green. Well, do you believe that industrial chemicals
    such as under the Toxic Control Act--would you agree that the
    argument for Federal preemption in a State regulation is
    strongest when its Federal standards are regulating the
    consequences of these products themselves?
        Mr. Revesz. Well, I think we are talking about a situation
    where there is Federal regulation--Federal substantive
    regulation and where the States are trying to regulate the same
    product in a more stringent way.
        Clearly, less stringent State regulations would be
    preempted. So if the States are trying to regulate the same
    product in a more stringent way, the propriety of Federal
    preemption would depend on the strength of these economies of
    scale.
        And it is--as a result, it is not a question that can
    really be answered across the board. It would have to be
    examined, basically, industry by industry or compound by
    compound.
        Mr. Green. Mr. Chairman, I appreciate your patience.
    Although, if we are going to do cars, then why shouldn't we do
    bleaches and other things that have some national standard?
        I yield back.
        Mr. Shimkus. The gentleman yields back his time.
        The Chair now recognizes the gentleman from Ohio, Mr.
    Latta, for 5 minutes.
        Does the gentleman from Ohio want to go?
        Mr. Latta. Mr. Chairman, I thought you said you were
    recognizing the----
        Mr. Shimkus. No. Let's go. We are running out of time.
        Mr. Latta. Thank you very much, Mr. Chairman.
        Professor Adler, if I could start the question with you.
        In your testimony, you discussed a proposed policy of
    ecological forbearance under which States could petition
    Federal agencies for waivers from Federal requirements where
    there are no compelling reasons to enforce the Federal rule.
        Can you think of a current example where this would be
    applicable in the State of Ohio or elsewhere?
        Mr. Adler. Well, I think there are lots of areas where
    State regulators have complained that they are forced, as part
    of the existing regulatory structure, to devote time and
    resources to meeting standards or fulfilling requirements that
    aren't of particular importance in that State.
        One of the most obvious areas where this occurs is under
    the Safe Drinking Water Act where you have requirements to test
    for certain substances or to bring levels of certain
    contaminants below Federally approved levels. That may or may
    not be the greatest concern in particular local areas.
        And sometimes this has led to some States even challenging
    the listing of such substances. The State of Nebraska, for
    example, challenged the tightening of Federal standards for
    arsenic, arguing both that this was not a serious health
    concern for people in Nebraska, but, secondly, insofar as this
    would increase the costs of providing water through regulated
    water systems, this would drive many consumers, particularly
    those in lower incomes, to opt out of using water systems and
    use unregulated well water, which in many cases would actually
    be more risk--more dangerous to public health.
        Nebraska, therefore, sued, arguing--and it failed in its
    lawsuit, but I think that is an example of where States will
    sometimes have very good reasons for wanting to devote their
    resources to a different set of environmental priorities than
    what is specified under Federal law.
        And it would be good if there is a mechanism whereby States
    could seek relief from Federal requirements so that they may
    devote their resources in ways--or to problems that are of
    greater concern to their citizens and are in alignment with
    what the demands of local citizens are.
        We don't now really have a mechanism that is very effective
    at doing that. And so, in my testimony, I suggest an idea that
    has also been suggested by Professor Farber at the University
    of California at Berkeley of one way of giving States the
    opportunity for that kind of flexibility.
        Mr. Latta. Let me follow up.
        Also, is there empirical evidence to support the assertion
    that leaving environmental regulation to the States will
    precipitate a race to the bottom?
        Mr. Adler. No. There actually really isn't such evidence.
    There is one study that relies upon survey data that shows that
    State regulators are responsive to competitive concerns, but
    that is not sufficient to show there is race to the bottom.
        Professor Revesz has written what is probably the seminal
    article on the theoretical arguments related to race to the
    bottom, I think showing quite compellingly that, as an
    analytical matter, the ``race to the bottom'' theory rests on a
    lot of a assumptions that are hard to justify.
        As an empirical matter, I have done work in the area of
    wetlands, showing that the pattern of State wetland regulation
    prior to Federal regulation is the exact opposite of what the
    ``race to the bottom theory'' would predict.
        There is a significant amount of literature in both the
    economic literature and the political science literature
    looking empirically at patterns of State regulation, again
    showing that the patterns of State regulation are not
    consistent with the idea of a race to the bottom.
        And, in fact, there is some scholarship that suggests that
    States, in fact, learn from each other and that, when one
    State, whether it is California or New York or what have you,
    regulates more stringently or to enhance environmental
    protection, that neighboring States become more likely to
    follow suit and more likely to increase their levels of
    environmental protection as well as they learn from the
    positive experience of their neighbors.
        And then there is also some work--I have done some work and
    others have done work about suggesting that even non-preemptive
    Federal regulation alters the incentives that State regulators
    face and, in some cases, will discourage States from being
    innovative and being more aggressive and experimental in trying
    to address environmental problems because of the way it alters
    the political and other incentives for State action.
        So even non-preemptive Federal regulation can discourage
    States from being the laboratories of democracy that we would
    like them to be.
        Mr. Latta. Thank you very much, Mr. Chairman. I yield back.
        Mr. Shimkus. The gentleman yields back.
        The Chair now recognizes the gentleman from California, Mr.
    McNerney.
        Mr. McNerney. Thank you, Mr. Chairman.
        Mr. Shimkus. You are welcome.
        Mr. McNerney. Ms. Steinzor, have you ever heard of the word
    ``chemical trespass''--the term?
        Ms. Steinzor. I am actually not familiar with that.
        Mr. McNerney. OK. Professor Revesz, you discussed fracking
    and the fugitive emissions of methane.
        Is the commerce clause broad enough, in your opinion, to
    permit the EPA--or the Federal Government to regulate fugitive
    emissions of methane?
        Mr. Revesz. Oh, definitely. The--I mean, fugitive emissions
    of methane are an interstate problem. They are actually a
    global problem. They would affect the negotiating posture of
    the United States in climate change negotiations.
        I don't think there is any plausible argument that would
    stand in the way of Congress choosing to act to regulate those
    emissions, should Congress choose to do that.
        And, moreover, I think that, because of the significant
    interjurisdiction externalities posed by fugitive emissions of
    methane as a matter of policy, there is a very compelling
    reason for congressional action.
        Mr. McNerney. Thank you.
        Professor Steinzor, could you describe how the States and
    the Federal Government work together to implement Federal
    environmental programs.
        Ms. Steinzor. Yes. The States have delegated authority to
    implement the programs so they work closely with EPA. EPA will
    set the minimum standards of what kind of protection is
    offered.
        And then the States write permits or otherwise take
    enforcement action against regulated entities to make sure they
    comply with those standards.
        And most of them are based on the protection of public
    health or the environment, and many have a cost-effectiveness
    requirement.
        Mr. McNerney. Thank you.
        Mr. Meltz, regarding this model that was just described, in
    your opinion, does the case law call into question this model
    of environmental cooperation?
        Mr. Meltz. Absolutely not. It is well established. It has
    been going on at least since 1970. And States, of course, have
    their own inherent police power to deal with these
    environmental problems. It is not that they get their authority
    to do so from the Federal Government.
        It is just that the Federal Government can set preemptive
    standards and then allow States to come in with their own
    programs and run the program within the State, if they would
    rather. But States have their own inherent authority, if not
    preempted.
        Ms. Steinzor. That was a great clarification.
        Mr. McNerney. I will yield the rest of my time to the
    gentlewoman from Colorado.
        Ms. DeGette. Thank you very much in the effort of
    efficiency.
        Mr. Chairman, first of all, I apologize for being late. We
    had a hearing upstairs on 21st Century Cures, which, as you
    know, I am the cochair with Chairman Upton.
        But I do want to take a minute to welcome Dean Revesz here.
    He is the dean of my alma mater--the dean emeritus of my alma
    mater, NYU law school, and he did a wonderful job when he was
    dean.
        Mr. Shimkus. That might make me reconsider a next
    invitation. So I am not sure that is helpful.
        Ms. DeGette. I knew that that would be, and that will save
    him a trip down here. So it is all good.
        Dean Revesz, I just wanted to ask a follow-up question to
    what you were talking to Mr. Green about, which is, really, the
    propriety of the Federal Government preempting State laws. What
    you were saying is oftentimes it is an economy of scale issue
    and what is the specific State concern.
        I am wondering how we, as Congress, can take that sort of
    general principle into consideration as we really look at
    fracking legislation or Tosca or all of the other issues we
    have been talking about this morning. How do we weigh those
    equities?
        Mr. Revesz. Well, it is a hard question, and you have a
    hard job.
        But there are some important guidelines. I mean, first,
    there is a significant distinction between product standards
    and process standards.
        The economies of scale argument really doesn't apply to
    process standards. You know, process standards can be very
    different across the country and products can still trade in
    national markets.
        So tracking the process standards, you don't have to worry
    about that. You know, whether its action is good or bad will
    have to be decided on other reasons, but you don't have to
    worry about the economy of scale.
        For products, you might have to. I mean, generally, bigger
    isn't always better. And, you know, we know that in all kinds
    of contexts.
        So I think some categorical boxes are fairly clear to draw.
    And you can learn about the manufacture of cars. It probably
    won't take that long to figure out that there are significant
    economies of scales.
        For most products--you know, products are produced in the
    centralized way across the country, product economies of scale
    are less.
        And you can also give some flexibility to the Federal
    regulator. Often these standards are going to be set by Federal
    regulators and there can be some flexible mechanisms, including
    some cooperative flexible mechanisms where they can work with
    the States.
        So I think you can make some broad generalizations,
    delegate some authority to do the Federal regulators, and then
    have them work cooperatively with the States. You will probably
    end up with an outcome that is pretty good.
        Ms. DeGette. Thank you very much.
        Mr. Shimkus. I want to thank my colleague.
        There is 11 minutes left before the vote is called.
        I want to recognize the gentleman from West Virginia for 5
    minutes.
        Mr. McKinley. Thank you, Mr. Chairman.
        I will try to be brief. I have many more questions here to
    ask with this, but given the time frame with it--Mr. Chairman,
    with all due respect to your expectations at this hearing, I
    really would like to ask Ms. Steinzor some other questions,
    especially after your testimony that you said that industry is
    browbeating the EPA.
        Is that a fair statement of what you said?
        Ms. Steinzor. Yes. I believe that is a fair statement.
        Mr. McKinley. Do you think that Congress is also pushing
    back against the EPA in a browbeating way?
        Ms. Steinzor. Yes.
        Mr. McKinley. I find that pretty incredible.
        That is why I like these discussions. We get off game here
    a little bit because I know he had intention, but here is a
    chance for us to have a dialogue about that because, quite
    frankly, many of us think that the EPA is a bully in the
    playground.
        It is imposing things on small individuals, small farmers,
    individuals, and we are trying to be their voice. We are trying
    to raise the awareness around the country that the EPA is
    overextending its bounds.
        So I am glad that you think that we are because it helps me
    understand a little bit better where you are coming from,
    whatever adjective we want to add to that.
        Do you think the EPA wage garnishment is fair, is right?
        Ms. Steinzor. I am not familiar with the circumstances
    where that happened.
        Mr. McKinley. Do you think the navigable waterways on our
    agricultural farms--do you think that is fair, their ruling?
        Ms. Steinzor. I actually think----
        Mr. McKinley. Just a ``yes'' or ``no,'' given the time.
        Do you think it is ``yes''? I am hearing a ``yes.''
        I heard that--on coal ash, did you even read the bill?
        Ms. Steinzor. I am sorry?
        Mr. McKinley. We passed it four times, by the way. The
    Senate is not taking the coal ash bill up. We could have
    resolved this issue, and the North Carolina situation probably
    would not have happened if the Senate had taken that bill up.
        So we are trying to work with that--the Congress has
    actually--the House is actually working a way to try to address
    this problem, and the Senate, because of an ideology, is
    preventing that from going forth.
        So, apparently, you are not aware.
        Ms. Steinzor. I am very familiar with the coal ash bill. I
    don't think it would have solved the problem in North Carolina.
        Mr. McKinley. Oh. You don't think the collapse of the dam--
    --
        Ms. Steinzor. I don't think so, because you would have left
    it to North Carolina at the State level.
        Mr. McKinley. Well, you are not an engineer. So I can't
    image you would understand that.
        What about Spruce Mine? Do you think it was appropriate
    that the EPA has the ability to withdraw--retroactively
    withdraw a permit?
        Ms. Steinzor. I am not familiar with that situation.
        Mr. McKinley. What I am pointing out--and this is what
    America needs to understand--that is why we are pushing back
    against this bully in the playground.
        These are just examples of things that the EPA is doing to
    our community, our businesses, our farms, all across America,
    and someone has to stand up to them.
        Because individuals like the Alts over in eastern panhandle
    or the Sacketts out in Idaho, they don't have the resources.
    They need somebody here in Congress to stand up and push back
    against this bully.
        Have you ever experienced a bully?
        Ms. Steinzor. Yes, I have.
        Mr. McKinley. Then, you understand. You ought to be able to
    relate to that, about someone in the power----
        Ms. Steinzor. I disagree that EPA is a bully.
        Mr. McKinley. You do you agree that EPA is a bully?
        Ms. Steinzor. I do not agree that EPA is a bully.
        Mr. McKinley. Oh. OK. Well, I guess that is why we are just
    going to disagree with that.
        But, nevertheless, many of us perceive that, when we see
    them attacking industries, attacking families and their farms,
    we are talk--individuals trying to--in Idaho--I could go on and
    on with examples of that.
        I do hope you do get another chance to read the Fly Ash
    Bill because we passed it four times and we think it will
    address that.
        Actually, the EPA supports this legislation. They've
    indicated that they find it a workable document. If you are not
    aware of that, you might want to check into that a little bit.
        And the President did not issue a veto threat with that. So
    this was a document that could have gone to save that problem--
    prevent that problem. But because of the ideology of people in
    the other body, apparently, they didn't want to do that.
        So I am sorry. In deference to time, let me not waste any
    more. And I yield back the balance of my time.
        Mr. Shimkus. The gentleman yields back his time.
        We want to thank the panel. There is still about 6 minutes
    left before we need to get to the floor. We talked about the
    time frame beforehand. So we are going to adjourn this in a
    minute. We are not going to call you back.
        Be prepared for some folks to follow up with questions. And
    if you would respond. You know, we try to primarily focus on
    the questions when should Congress consider acting and who
    should be the regulator.
        You got some very good questions. I was hoping for clarity.
    I think I got more confusion. But I guess that is what you guys
    live with and ladies live with when you deal with
    constitutional law and States' rights and the like.
        This was helpful to me. I appreciate your attendance.
        With that, I am going to call the hearing as adjourned.
        [Whereupon, at 10:32 a.m., the subcommittee was adjourned.]

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