[Congressional Record Volume 143, Number 67 (Tuesday, May 20, 1997)]
[Senate]
[Pages S4753-S4760]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]





      THE RIGHT-TO-KNOW MORE AND POLLUTION PREVENTION ACT OF 1997

  Mr. LAUTENBERG. Mr. President, today the Environmental Protection 
Agency is making public its annual inventory of toxic chemical 
releases. This information is made available to the public under the 
Emergency Planning and Community Right-to-Know Act which I authored in 
1986.
  EPA announced today a 45.6 percent decrease nationwide in the release 
of toxic chemicals since 1988, when these data were first collected. In 
my State of New Jersey, which has a large chemical industry, releases 
were reduced by a stunning 70 percent.
  Mr. President, the right-to-know law has been an enormous success. 
Shedding the light of day on toxic pollution has encouraged industries 
to find ways to reduce the threat of these cancer causing materials to 
our communities. We should build on that success.
  Today I am introducing with Senators Torricelli, Boxer, Kerry, 
Graham, Kennedy and Wellstone the Right-to-Know More and Pollution 
Prevention Act of 1997, which will significantly expand the public's 
right-to-know about toxic chemicals in their homes, workplaces, and 
communities.
  The landmark 1986 Right-to-Know Act requires companies to list the 
amount of certain chemicals that leave their facilities as pollution 
and enter our air, water, or soil. It has often been cited as one of 
the most effective environmental laws on the books. By shining a public 
spotlight on pollution, the public is better informed, and many 
companies have taken voluntary steps to reduce pollution.
  In fact, without using traditional ``command and control 
requirements,'' the publication of right-to-know data has led companies 
to voluntarily reduce their releases of toxic chemicals by almost 46 
percent, or 1.6 billion pounds, between 1988 and 1994.
  The bill I am introducing today significantly expands the community 
right-to-know reporting requirements by tracking toxic materials as 
they move through a facility--to tell us what comes in, what is 
transformed into product or waste, and what leaves a facility as 
pollution. This tracking system, known as chemical use or materials 
accounting, can further decrease the use of toxic chemicals and their 
release into the environment.
  When my own State of New Jersey began collecting information on toxic 
chemicals used by industries, in addition to recording toxic chemical 
releases, the results were dramatic. Whereas the national decrease in 
toxic emissions reported is 45.6 percent since 1988, in New Jersey it 
has been 70 percent. The discrepancy between New Jersey and the rest of 
the country, I believe, is due to the State requirement for materials 
accounting.
  The reason that materials accounting data is so valuable is that it 
provides information to industry and incentives to prevent pollution. 
With this data, industrial facilities have the information necessary to 
develop pollution prevention plans.
  Pollution prevention is the highest priority in managing waste, and 
falls at the top of the ladder of steps industry can take to reduce 
pollution--starting with prevention, then recycling, and then 
treatment, with disposal or release into the environment the least 
desirable last step. This so-called hierarchy of waste management has 
been endorsed by the Environmental Protection Agency as well as many 
Fortune 500 companies and the armed services.
  Materials accounting makes pollution prevention planning possible. 
You can't reduce toxic use if you don't know the quantity of toxics 
used and how they're used. That's why materials accounting data is so 
important. The bill requires companies which collect materials 
accounting data to prepare pollution prevention plans to decrease their 
use of toxics to protect those who might be exposed to them and can 
help companies improve their bottom line.

[[Page S4754]]

It represents a strong marriage between environmental concerns and 
economic efficiency.
  A recent New Jersey study found that for every dollar spent on 
additional reporting, companies actually saved between five and eight 
dollars in reduced costs. By reducing waste, companies reduce their 
cost of doing business.
  Mr. President, materials accounting provides a framework for 
identifying opportunities to reduce pollution at the source through 
changes in production, operation and raw materials use. A random survey 
of 42 New Jersey facilities showed that 62 percent of the companies 
questioned anticipated that pollution prevention initiatives, based on 
information gleaned from materials accounting data, could save them 
money. Business wins, the public wins, and the public health and 
environment wins.
  Mr. President, my bill directs the EPA to expand right-to-know 
reporting to include information on toxic chemicals being transported 
through communities and used by industries in their products and 
workplaces.
  It would fill reporting gaps in the existing law by requiring all 
companies that have more than the stipulated threshold amounts to file 
reports, regardless of the industrial classification in which they 
fall. EPA could exempt categories of industry groups if the benefits 
and paperwork requirements are disproportionate to any benefit.
  Finally, the bill requires businesses to prepare pollution prevention 
plans based on the materials accounting data they collect.
  Mr. President, EPA has proposed requiring materials accounting data 
under existing authorities of the Emergency Planning and Community 
Right-To-Know Law [EPCRA] and other statutes.
  I believe the law gives them that authority. However, some industry 
groups have challenged literally every action by the office that 
implements the Right-to-Know Law. To avoid continuing court fights and 
avoid needless delays, this law would clarify congressional intent.
  Mr. President, this bill will help ensure a healthier environment for 
all of us, and can save industry money, making our economy and chemical 
industry more cost competitive. It makes good environmental sense and 
good business sense. And it's legislation that the public wants. I hope 
we will move to enact it in this Congress.
  Mr. President, I ask unanimous consent that the text of the bill be 
inserted in the Record, along with letters from EPA Administrator 
Browner and USPIRG and the Environmental Information Center supporting 
the bill.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 769

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Right-To-
     Know-More and Pollution Prevention Act of 1997''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

         TITLE I--PUBLIC RIGHT TO KNOW ABOUT TOXIC CHEMICAL USE

Sec. 101. Reporting requirements.
Sec. 102. Disclosure of toxic chemical use.
Sec. 103. Environmental reporting and public access to information.
Sec. 104. Trade secret protection.
Sec. 105. Civil actions.

  TITLE II--COMMUNITY RIGHT TO KNOW AND POLLUTION PREVENTION PLANNING

Sec. 201. Toxic chemical release forms.
Sec. 202. Pollution prevention planning.
Sec. 203. Information gathering and access.
Sec. 204. Public availability.
Sec. 205. Federal facilities.
Sec. 206. Enforcement.
         TITLE I--PUBLIC RIGHT TO KNOW ABOUT TOXIC CHEMICAL USE

     SEC. 101. REPORTING REQUIREMENTS.

       (a) Thresholds for Toxic Chemicals with Certain Significant 
     Risks.--Section 313(f) of the Emergency Planning and 
     Community Right-To-Know Act of 1986 (42 U.S.C. 11023(f)) is 
     amended--
       (1) in paragraph (1), by adding at the end the following:
       ``(C) With respect to each of the toxic chemicals described 
     in paragraph (3) that are released from a facility, the 
     amount of the threshold for the toxic chemical under that 
     paragraph.''; and
       (2) by adding at the end the following:
       ``(3) Thresholds for toxic chemicals with certain 
     significant risks.--
       ``(A) Establishment of thresholds.--Not later than 2 years 
     after the date of enactment of this paragraph, the 
     Administrator shall establish a threshold for each toxic 
     chemical that the Administrator determines may present a 
     significant risk to children's health or the environment 
     because of--
       ``(i) the tendency of the toxic chemical to persist or to 
     bioaccumulate or disrupt endocrine systems; or
       ``(ii) other characteristics of the toxic chemical.
       ``(B) Chemicals to be included.--Among the toxic chemicals 
     for which the Administrator shall establish thresholds under 
     subparagraph (A) shall be lead, mercury, dioxin, cadmium, 
     chromium, and the substances listed as bioaccumulative 
     chemicals of concern in the notice published by the 
     Administrator at 60 Fed. Reg. 15393.''.
       (b) Additional Chemicals.--Section 313(c) of the Emergency 
     Planning and Community Right-To-Know Act of 1986 (42 U.S.C. 
     11023(c)) is amended--
       (1) by striking ``are those'' and inserting the following: 
     ``are--
       ``(1) the'';
       (2) by striking the period at the end and inserting ``; 
     or''; and
       (3) by adding at the end the following:
       ``(2) dioxin and substances listed as bioaccumulative 
     chemicals of concern in the notice published by the 
     Administrator at 60 Federal Register 15393.''.
       (c) Releases.--Subsections (a) and (b)(1) of section 313 of 
     the Emergency Planning and Community Right-To-Know Act of 
     1986 (42 U.S.C. 11023) are amended by striking ``or otherwise 
     used'' and inserting ``otherwise used, or released''.
       (d) Civil Actions.--Section 326(a)(1)(B) of the Emergency 
     Planning and Community Right-To-Know Act of 1986 (42 U.S.C. 
     11046(a)(1)(B)) is amended--
       (1) by redesignating clauses (iii) through (vi) as clauses 
     (iv) through (vii), respectively, and
       (2) by inserting after clause (ii) the following:
       ``(iii) Establish a reporting threshold for a toxic 
     chemical described in section 313(f)(3).''.
       (e) Revised Thresholds.--Section 313(f)(2) of the Emergency 
     Planning and Community Right-To-Know Act of 1986 (42 U.S.C. 
     11023(f)(2)) is amended in the first sentence by striking 
     ``paragraph (1)'' and inserting ``subparagraph (A) or (B) of 
     paragraph (1)''.

     SEC. 102. DISCLOSURE OF TOXIC CHEMICAL USE.

       (a) Toxic Chemical Release Form.--
       (1) In general.--Section 313(g) of the Emergency Planning 
     and Community Right-To-Know Act of 1986 (42 U.S.C. 11023(g)) 
     is amended--
       (A) in paragraph (1)(C)--
       (i) by inserting ``for the preceding calendar year'' after 
     ``items of information'';
       (ii) in clause (i) by striking ``is'' and inserting 
     ``was'';
       (iii) in clause (ii) by striking ``preceding'';
       (iv) in clause (iv) by striking ``annual quantity of the 
     toxic chemical entering'' and inserting ``quantity of the 
     toxic chemical that entered''; and
       (v) by adding at the end the following:
       ``(v) The number of employees (including contractors) at 
     the reporting facility, the number of employees (including 
     contractors) at the reporting facility who were potentially 
     exposed to the toxic chemical;
       ``(vi) The following materials accounting information:

       ``(I) A description of the uses of the toxic chemical at 
     the facility.
       ``(II) The starting (as of January 1) inventory of the 
     toxic chemical at the facility.
       ``(III) The quantity of the toxic chemical produced at the 
     facility.
       ``(IV) The quantity of the toxic chemical that was 
     transported to the facility and the mode of transportation 
     used.
       ``(V) The quantity of the toxic chemical consumed at the 
     facility.
       ``(VI) The quantity of the toxic chemical that was shipped 
     out of the facility as a product or in a product and the 
     quantities intended for industrial use, commercial use, 
     consumer use, and any additional categories of use that the 
     Administrator may designate by regulation.
       ``(VII) The quantity of the toxic chemical that entered any 
     waste stream (or that was otherwise released into the 
     environment) prior to recycling, treatment, or disposal (as 
     required to be reported under section 6607(b)(1) of the 
     Pollution Prevention Act of 1990 (42 U.S.C. 13107(b)(1))).
       ``(VIII) The amount of toxic chemical at the facility as of 
     December 31.
       ``(IX) The amount of the toxic chemical recycled at the 
     facility that was used during the calendar year at the 
     facility.
       ``(X) The toxic chemical use of the chemical that is 
     calculated by adding the quantities reported under subclauses 
     (II), (III), (IV), and (IX) and subtracting the quantity 
     reported under subclause (VIII).
       ``(XI) If the sum of the quantities reported under 
     subclauses (II), (III), (IV), and (IX) does not equal the sum 
     of the quantities reported under subclauses (V), (VI), (VII), 
     and (VIII), a statement of the cause of the discrepancy.

       ``(vii) The reduction (from the calendar year preceding the 
     calendar year for which the form is submitted) in the 
     quantity of the toxic chemical that is reported under clause 
     (vi)(VII), as a result of the following: equipment or 
     technology modifications; process or procedure modifications; 
     reformulation or

[[Page S4755]]

     redesign of products; substitution of raw materials; and 
     improvements in housekeeping, maintenance, training, or 
     inventory control.
       ``(viii) The reduction (from the calendar year preceding 
     the calendar year for which the form is submitted) in the 
     quantity of toxic chemical use as defined in subclause (X) as 
     a result of the following: equipment or technology 
     modifications; process or procedure modifications; 
     reformulation or redesign of products; substitution of raw 
     materials; and improvements in housekeeping, maintenance, 
     training, or inventory control.''; and
       (B) by adding at the end the following:
       ``(3) Computations.--Quantities reported under this 
     subsection shall be complete and verifiable by computations 
     under generally accepted principles of materials 
     accounting.''.
       (2) Definition of materials accounting information.--
       (A) In general.--Section 329 of the Emergency Planning and 
     Community Right-To-Know Act of 1986 (42 U.S.C. 11049) is 
     amended--
       (i) by redesignating paragraphs (7), (8), (9), and (10) as 
     paragraphs (8), (9), (10), and (11), respectively; and
       (ii) by inserting after paragraph (6) the following:
       ``(7) Materials accounting information.--The term 
     `materials accounting information' means the information 
     described in section 313(g)(1)(vi).''.
       (B) Conforming amendment.--Section 6603(4) of the Pollution 
     Prevention Act of 1990 (42 U.S.C. 13102(4)) is amended by 
     striking ``329(8)'' and inserting ``329''.
       (3) Regulation.--Not later than 2 years after the date of 
     enactment of this Act, the Administrator of the Environmental 
     Protection Agency shall promulgate a regulation regarding the 
     information to be provided under clauses (v), (vi), (vii), 
     and (viii) of section 313(g)(1)(C) of the Emergency Planning 
     and Community Right-To-Know Act of 1986 (42 U.S.C. 
     11023(g)(1)(C)), as added by paragraph (1).
       (b) Other Requirements.--The Administrator of the 
     Environmental Protection Agency shall by regulation integrate 
     the reporting requirements under the Emergency Planning and 
     Community Right-To-Know Act of 1986 (42 U.S.C. 11001 et seq.) 
     and the Pollution Prevention Act of 1990 (42 U.S.C. 12101 et 
     seq.).

     SEC. 103. ENVIRONMENTAL REPORTING AND PUBLIC ACCESS TO 
                   INFORMATION.

       (a) Streamlined Data Collection and Dissemination.--Section 
     313 of the Emergency Planning and Community Right-To-Know Act 
     of 1986 (42 U.S.C. 11023) is amended by adding at the end the 
     following:
       ``(m) Streamlined Data Collection and Dissemination.--
       ``(1) In general.--To enhance public access and use of 
     information resources, to facilitate compliance with 
     reporting requirements, and to promote multimedia permitting, 
     reporting, and pollution prevention, not later than 3 years 
     after the date of enactment of this subsection, the 
     Administrator shall--
       ``(A) create standard data formats for information 
     management;
       ``(B) integrate information resources, using common 
     company, facility, industry, geographic, and chemical 
     identifiers and any other identifiers that the Administrator 
     considers appropriate;
       ``(C) establish a system for indexing, locating, and 
     obtaining agency-held information about parent companies, 
     facilities, industries, chemicals, geographic locations, 
     ecological indicators, and the regulatory status of toxic 
     chemicals and entities subject to agency regulation;
       ``(D) consolidate all annual reporting requirements under 
     this title and other Federal environmental laws for small 
     businesses, including by permitting reporting to a single 
     point of contact using a single form or electronic reporting 
     system; and
       ``(E) provide the public a single point of contact for 
     access to all the publicly available information gathered by 
     the Administrator for any regulated entity.
       ``(2) Consolidation.--Not later than 5 years after the date 
     of enactment of this subsection, the Administrator shall 
     consolidate all annual reporting under this title and other 
     Federal environmental laws administered by the Administrator 
     for each entity required to report, including by permitting 
     reporting to a single point of contact using a single form or 
     electronic reporting system.
       ``(3) Ease of compliance.--In improving the means by which 
     the Administrator provides information to the public and 
     requires information be reported by regulated entities, as 
     required by paragraphs (1) and (2), the Administrator, 
     building on the experiences of the States, shall use 
     technology to facilitate reporting by regulated entities and 
     improve access to the data by the public.''.
       (b) Disclosure of Uses of Toxic Chemicals.--
       (1) Basic requirement.--Section 313(a) of the Emergency 
     Planning and Community Right-To-Know Act of 1986 (42 U.S.C. 
     11023(a)) is amended in the second sentence by inserting 
     ``toxic chemical uses and'' before ``releases''.
       (2) Use of release form.--Section 313(h) of the Emergency 
     Planning and Community Right-To-Know Act of 1986 (42 U.S.C. 
     11023(h)) is amended in the second sentence by inserting 
     ``the uses of toxic chemicals at covered facilities and'' 
     before ``releases of toxic chemicals to the environment''.

     SEC. 104. TRADE SECRET PROTECTION.

       Section 322 of the Emergency Planning and Community Right-
     To-Know Act of 1986 (42 U.S.C. 11042) is amended--
       (1) in subsection (a)(1) by adding the following at the 
     end:
       ``(C) Withholding of materials accounting information.--A 
     person that is required to submit materials accounting 
     information under section 313(g)(1)(C)(vi) may withhold an 
     element or portion (as defined by a regulation promulgated by 
     the Administrator under subsection (c)) of the information if 
     the person complies with paragraph (2) with respect to the 
     information to be withheld.'';
       (2) in subsection (b)(4) by inserting ``or other 
     information withheld'' after ``The chemical identity'';
       (3) in subsection (d)--
       (A) in paragraph (1), in the first sentence, by striking 
     ``toxic chemical which'' and inserting ``toxic chemical or 
     other information that'';
       (B) in paragraph (2), by inserting ``or other information 
     withheld'' after ``specific chemical identity'';
       (C) in paragraph (3)--
       (i) in subparagraph (A), by inserting ``or other 
     information withheld'' after ``specific chemical identity'';
       (ii) in subparagraph (B), by inserting ``or other 
     information withheld'' after ``chemical identity''; and
       (iii) in subparagraph (C), in the first sentence, by 
     inserting ``or other information withheld'' after ``chemical 
     identity'' each place it appears; and
       (D) in paragraph (4)(A), by inserting ``or other 
     information withheld'' after ``chemical identity'';
       (4) in subsection (f), by inserting ``or other information 
     withheld under subsection (a)(1)'' after ``specific chemical 
     identity''; and
       (5) in subsection (h)--
       (A) in paragraph (1), by inserting ``or other information 
     withheld'' before ``is claimed as a''; and
       (B) in paragraph (2), by inserting ``or other information 
     withheld'' after ``identity of a toxic chemical''.

     SEC. 105. CIVIL ACTIONS.

       (a) Past and Ongoing Violations.--Section 326(a)(1)(A) of 
     the Emergency Planning and Community Right-To-Know Act of 
     1986 (42 U.S.C. 11046(a)(1)(A)) is amended by inserting ``any 
     past or ongoing'' after ``An owner or operator of a facility 
     for''.
       (b) Venue.--Section 326 of the Emergency Planning and 
     Community Right-To-Know Act of 1986 (42 U.S.C. 11046(b)) is 
     amended--
       (1) in subsection (b), by striking paragraph (2) and 
     inserting the following:
       ``(2) Actions against the administrator.--
       ``(A) Petitions in the united states court of appeals for 
     the district of columbia circuit.--
       ``(i) In general.--Review of an action of the Administrator 
     described in clause (ii) shall be sought by filing a petition 
     for review in the United States Court of Appeals for the 
     District of Columbia.
       ``(ii) Actions of the administrator.--The actions of the 
     Administrator described in this clause are--

       ``(I) a final agency action in response to a petition filed 
     under section 313(e);
       ``(II) a final agency action to revise a threshold under 
     section 313(f)(2);
       ``(III) a final rule to modify nationally the reporting 
     frequency under section 313(i);
       ``(IV) any other rulemaking of general applicability under 
     this title; and
       ``(V) any other action that is based on a determination of 
     nationwide scope or effect if, in taking the action, the 
     Administrator publishes a finding that the action is based on 
     such a determination.

       ``(B) Petitions for review in other circuits.--
       ``(i) In general.--Review of an action of the Administrator 
     described in clause (ii) shall be sought by filing a petition 
     for review in the United States Court of Appeals for the 
     circuit in which the geographic region to which the action 
     relates is situated.
       ``(ii) Actions of the administrator.--The actions of the 
     Administrator described in this clause are--

       ``(I) a final rule to modify the reporting frequency under 
     section 313(i) for a particular geographic region; and
       ``(II) any other rulemaking specific to a particular 
     geographic region.

       ``(C) Civil actions in united states district court.--An 
     action of the Administrator under subsection (a) other than 
     an action described in subparagraph (A) or (B) shall be 
     brought in the United States District Court for the District 
     of Columbia.''; and
       (2) by adding at the end the following:
       ``(i) Time for Filing Petition for Review of Action by the 
     Administrator; Exclusive Means of Review.--
       ``(1) Time for filing petition.--A petition for review of 
     an action of the Administrator under subparagraph (A) or (B) 
     of subsection (b)(2) shall be filed not later than 60 days 
     after the date on which notice of the action is published in 
     the Federal Register.
       ``(2) Exclusive means of review.--An action of the 
     Administrator with respect to which review can be or could 
     have been obtained under subparagraph (A) or (B) of 
     subsection (b)(2) shall not be subject to judicial review in 
     a civil or criminal enforcement proceeding.''.

[[Page S4756]]

  TITLE II--COMMUNITY RIGHT TO KNOW AND POLLUTION PREVENTION PLANNING

     SEC. 201. TOXIC CHEMICAL RELEASE FORMS.

       Section 313(b) of the Emergency Planning and Community 
     Right-To-Know Act of 1986 (42 U.S.C. 11023(b)) is amended--
       (1) by striking paragraph (2); and
       (2) in paragraph (1)--
       (A) by striking ``(A) The requirements'' and inserting 
     ``The requirements'';
       (B) by striking ``and that are in Standard Industrial 
     Classification Codes 20 through 39 (as in effect on July 1, 
     1985)'';
       (C) by striking subparagraph (B) and inserting the 
     following:
       ``(2) Deletion of Facilities.--
       ``(A) In general.--The Administrator, at the instance of 
     the Administrator or in response to a petition, may delete by 
     rule a particular facility or category of facilities from the 
     requirements of this section based on a determination that 
     reporting by the owner or operator of the facility or 
     category of facilities is inconsistent with the efficient 
     operation of this title.
       ``(B) Considerations.--In making a determination under 
     subparagraph (A), the Administrator may consider the toxicity 
     of the toxic chemical, proximity to other facilities that 
     release the toxic chemical or to population centers, the 
     history of releases of toxic chemicals at the facility or 
     category of facilities, and such other factors as the 
     Administrator considers appropriate.'';
       (D) in subparagraph (C) --
       (i) by striking ``(C) For purposes'' and inserting ``(3) 
     Definitions.--For purposes'';
       (ii) by redesignating clauses (i) and (ii) as subparagraphs 
     (A) and (B); and
       (iii) in subparagraph (B) (as redesignated by clause (ii)), 
     by redesignating subclauses (I) and (II) as clauses (i) and 
     (ii).

     SEC. 202. POLLUTION PREVENTION PLANNING.

       (a) In General.--Title III of the Emergency Planning and 
     Community Right-To-Know Act of 1986 (42 U.S.C. 11001 et seq.) 
     is amended--
       (1) by redesignating subtitle C as subtitle D; and
       (2) by inserting after subtitle B the following:
              ``Subtitle C--Pollution Prevention Planning

     ``SEC. 316. POLLUTION PREVENTION PLANS.

       ``(a) Definitions.--In this section:
       ``(1) Authorized state.--The term `authorized State' means 
     a State authorized under subsection (m) to carry out the 
     Administrator's authorities and responsibilities under this 
     section.
       ``(2) Byproduct.--The term `byproduct' means a toxic 
     chemical that--
       ``(A) is generated prior to storage, recycling (except in-
     process recycling), treatment, control, disposal, or release;
       ``(B) is not intended for use as a product; and
       ``(C) is required to be reported under section 6607 of the 
     Pollution Prevention Act of 1990 (42 U.S.C. 13107).
       ``(3) Facility.--The term `facility' means a facility for 
     which a toxic chemical release form is required to be 
     submitted under section 313.
       ``(4) In-process recycling.--The term `in-process 
     recycling' means the practice of returning a recycled toxic 
     chemical to a production process using dedicated equipment 
     that is directly connected to and physically integrated with 
     a production process.
       ``(5) Pilot facility.--The term `pilot facility' means a 
     facility, or designated area of a facility, used for pilot-
     scale development of a product or process not primarily 
     involved in the production of a good for commercial sale.
       ``(6) Pollution prevention.--The term `pollution 
     prevention' means--
       ``(A) toxic use reduction; or
       ``(B) source reduction.
       ``(7) Production process.--The term `production process' 
     means a process, line, method, activity, or technique used to 
     produce a product or to reach a planned result.
       ``(8) Recovery.--
       ``(A) In general.--The term `recovery' means the act of 
     extracting or removing the toxic chemical from a waste stream 
     that includes--
       ``(i) the reclamation of the toxic chemical from a stream 
     that entered a waste treatment or pollution control device or 
     process (including an air pollution control device or 
     process, wastewater treatment or control device or process, 
     Federal or State permitted treatment or control device or 
     process, and any other type of treatment or control device or 
     process) where destruction of the stream or destruction or 
     removal of certain constituents of the steam occurs; and
       ``(ii) the reclamation for reuse of an otherwise used toxic 
     chemical that is spent or contaminated and that must be 
     recovered for further use in the original operation or any 
     other operation.
       ``(9) Recycling.--The term `recycling' means--
       ``(A) the recovery for reuse of a toxic chemical from a 
     gaseous, aerosol, aqueous, liquid, or solid stream; or
       ``(B) the reuse or the recovery for reuse of a toxic 
     chemical that is a hazardous waste or is a constituent of a 
     hazardous waste under the Solid Waste Disposal Act (42 U.S.C. 
     6901 et seq.), as determined by the Administrator.
       ``(10) Research and development laboratory.--The term 
     `research and development laboratory' means a facility or a 
     designated area of a facility used for research, development, 
     and testing activity, and not primarily involved in the 
     production of a good for commercial sale, in which a toxic 
     chemical is used by or under the direct supervision of a 
     technically qualified person.
       ``(11) Source reduction.--The term `source reduction' has 
     the meaning given the term in section 6603 of the Pollution 
     Prevention Act of 1990 (42 U.S.C. 13103).
       ``(12) Targeted production process.--The term `targeted 
     production process' means a production process or a group of 
     production processes (identified by the owner or operator of 
     a facility) that accounts for 90 percent or more of--
       ``(A) the total toxic chemical use calculated in accordance 
     with section 313(g)(1)(C)(vi)(X); or
       ``(B) the total quantity of byproducts generated at the 
     facility.
       ``(13) Toxic use reduction.--The term `toxic use reduction' 
     means the reduction in the quantity of toxic chemical use 
     reported under section 313(g)(1)(C)(viii) that is reduced so 
     as to reduce potential exposure to the public, workers, 
     consumers, and the environment.
       ``(b) Pollution Prevention Planning.--
       ``(1) In general.--To promote the assessment and 
     implementation of pollution prevention alternatives, the 
     owner or operator of a facility shall periodically complete a 
     pollution prevention plan.
       ``(2) Initial plan and updates.--The owner or operator of a 
     facility shall--
       ``(A) complete a pollution prevention plan on or before 
     July 1 of the second calendar year that begins after the date 
     of enactment of this section; and
       ``(B) review and update the pollution prevention plan 
     biennially thereafter.
       ``(3) Contents of pollution prevention plans.--
       ``(A) Items to be included.--Except as provided in section 
     317, a pollution prevention plan shall include--
       ``(i) a statement of management policy regarding pollution 
     prevention;
       ``(ii) a written certification by the owner or operator of 
     the facility regarding the accuracy and completeness of the 
     plan;
       ``(iii) 2- and 5-year pollution prevention goals for 
     targeted production processes, including a numerical 
     statement regarding the intended reduction in the quantity of 
     each toxic chemical manufactured, processed, or otherwise 
     used;
       ``(iv) a statement of progress achieved toward previously 
     submitted pollution prevention goals;
       ``(v) an analysis of each targeted production process, 
     including--

       ``(I) an assessment of materials accounting information of 
     toxic chemicals with respect to the targeted production 
     process; and
       ``(II) a full cost accounting of the direct and indirect 
     costs (including liabilities) of toxic chemical purchase, 
     use, and waste management;

       ``(vi) an evaluation of the options for reducing the use of 
     toxic chemicals or the generation of byproducts in the 
     targeted production unit process by means of the substitution 
     of raw materials, reformulation or redesign of products, 
     production unit modifications, and improvement in operation 
     and maintenance, including--

       ``(I) identification of options that minimize potential 
     exposure to workers, consumers, the public, and the 
     environment; and
       ``(II) an assessment of the technical and economic 
     feasibility of the options identified under subclause (I);

       ``(vii) an identification of options identified under 
     clause (vi)(I) that are technically feasible and have a 
     payback period of less than 2 years;
       ``(viii) a schedule for implementing the options identified 
     under clause (vii) that the owner or operator of the facility 
     intends to implement; and
       ``(ix) if there is an option identified under clause (vii) 
     that is not included in the schedule developed under clause 
     (viii), a statement of the reason why the option is not 
     included.
       ``(B) Items not to be included.--A pollution prevention 
     plan shall not include a waste management or control 
     activity.
       ``(4) Pollution prevention plan summaries.--
       ``(A) In general.--For each pollution prevention plan, the 
     owner or operator of a facility shall prepare a pollution 
     plan summary.
       ``(B) Contents.--A pollution plan summary shall include the 
     information reported under--
       ``(i) clauses (i), (ii), (iii), and (iv) of paragraph 
     (3)(A); or
       ``(ii) if applicable, subparagraphs (A), (B), (C), and (D) 
     of section 317(c)(2).
       ``(c) Pollution Prevention Plan Progress Reports.--
       ``(1) In general.--Beginning with the second full calendar 
     year after a pollution prevention plan has been prepared 
     under subsection (b), the owner or operator of a facility 
     shall prepare a pollution prevention plan progress report 
     annually for the facility in accordance with the schedule for 
     the submission of toxic release forms under section 313.
       ``(2) Contents.--A pollution prevention progress report 
     shall include--
       ``(A) a description of the facility and identification of 
     each targeted production process;
       ``(B) a numerical statement demonstrating the progress of 
     the facility towards achieving each of its 5-year goals for 
     pollution prevention; and

[[Page S4757]]

       ``(C) if the annual progress of the facility does not 
     achieve the level of progress anticipated in the pollution 
     prevention plan schedule for implementation, an explanation 
     of the reasons why that level of progress was not achieved.
       ``(d) Guidelines for Preparation of Pollution Prevention 
     Plans.--Not later than 2 years after the date of enactment of 
     this section, the Administrator shall by regulation establish 
     guidelines for the preparation of pollution prevention plans, 
     pollution prevention plan summaries, and pollution prevention 
     plan progress reports.
       ``(e) Availability of Pollution Prevention Plans, 
     Summaries, and Reports.--
       ``(1) Pollution prevention plans.--
       ``(A) In general.--The owner or operator of a facility 
     shall--
       ``(i) retain each pollution prevention plan at the 
     facility; and
       ``(ii) make each pollution prevention plan available for 
     inspection by the Administrator or authorized State.
       ``(B) Not public records.--A document or other record 
     obtained from or reviewed at a facility owned or operated by 
     a private person shall not be considered to be a public 
     record.
       ``(2) Pollution prevention plan summaries and progress 
     reports.--
       ``(A) Submission.--The owner or operator of a facility 
     shall submit a pollution prevention plan summary for the 
     facility and progress reports, with the toxic release forms 
     required under section 313 for the year in which the summary 
     is required, to the Administrator and to the State in which 
     the facility is located, in a format that is compatible with 
     electronic information storage and retrieval and compatible 
     with the data submitted under section 313 (except in a case 
     in which the Administrator determines that preparation in 
     electronic format would create a significant hardship).
       ``(B) Public availability.--The Administrator shall, using 
     electronic and other means, make pollution plan summaries and 
     progress reports available to the public consistent with 
     section 313(j).
       ``(f) Required Modification.--
       ``(1) In general.--The Administrator or an authorized State 
     may require the modification of a pollution prevention plan 
     or pollution prevention plan summary if the Administrator or 
     authorized State determines that the pollution prevention 
     plan does not meet the requirements of subsection (b) or the 
     pollution prevention plan summary does not meet the 
     requirements of subsection (b)(4).
       ``(2) Time for completion of required modification.--Any 
     modification required by the Administrator or authorized 
     State shall be completed by the owner or operator of the 
     facility not later than 90 days after the date on which the 
     Administrator or the State provides written notice that the 
     modification is required.
       ``(g) Product Formulas.--Nothing in this subtitle 
     authorizes the Administrator or a State to require that 
     information concerning nontoxic chemicals, or product 
     formulas for mixtures that include only nontoxic chemicals, 
     be included in a pollution prevention plan, summary, or 
     progress report.
       ``(h) Grouping of Processes.--The Administrator may publish 
     rules establishing criteria pursuant to which the 
     Administrator may permit an owner or operator of a facility 
     to consider production processes that use similar ingredients 
     to produce 1 or more similar products as a single production 
     process.
       ``(i) Training.--The Administrator or an authorized State 
     may require that individuals that prepare pollution 
     prevention plans for facilities in particular industrial 
     categories or subcategories receive training or attend 
     seminars and workshops on the proper preparation of toxic 
     release inventories and pollution prevention plans and on the 
     use of available pollution prevention measures.
       ``(j) Research and Development Laboratories.--The owner or 
     operator of a facility shall not be required to prepare a 
     pollution prevention plan, pollution prevention plan summary, 
     or pollution prevention progress report concerning a research 
     and development laboratory located at the facility.
       ``(k) Pilot Facilities.--The owner or operator of a 
     facility shall not be required to prepare a pollution 
     prevention plan, pollution prevention plan summary, or 
     pollution prevention plan progress report for a pilot 
     facility.
       ``(l) Technical Assistance.--
       ``(1) In general.--At the request of the owner or operator 
     of a facility, the Administrator or an authorized State may 
     provide technical assistance in pollution prevention 
     planning.
       ``(2) Reimbursement.--The Administrator may seek full (or 
     in the case of a small business, full or partial) 
     reimbursement for any technical assistance provided to a 
     facility.
       ``(3) No requirement of particular measures or standards.--
     Nothing in this subsection authorizes the Administrator to 
     require that a particular pollution prevention measure be 
     implemented or that a pollution prevention performance 
     standard be achieved at a facility or targeted production 
     process.
       ``(m) State Administration.--
       ``(1) Request for state authorization.--
       ``(A) Guidelines.--Not later than 1 year after the date of 
     enactment of this section, the Administrator shall publish 
     guidance that would be useful to the States in submitting a 
     program for approval under this paragraph.
       ``(B) Submission of programs.--A State may submit to the 
     Administrator a program for carrying out this section in the 
     State.
       ``(C) Implementation of state programs.--On and after the 
     date that is 180 days after date on which the Administrator 
     receives a State program under subparagraph (B), the State 
     may carry out the program in the State in place of the 
     Federal program under this section, unless the Administrator 
     notifies the State that the program is not approved.
       ``(2) Criteria for state authorization.--
       ``(A) In general.--The Administrator shall approve a State 
     program submitted under paragraph (1) if the Administrator 
     determines that the State program requires that--
       ``(i) each facility develop a pollution prevention plan 
     that includes materials accounting for full cost accounting; 
     and
       ``(ii) each pollution prevention plan address the reduction 
     of the use and generation as byproduct of toxic chemicals 
     subject to this section so as to reduce overall risks to the 
     public, workers, consumers, and the environment without 
     shifting risks between them.
       ``(B) Disapproval.--If the Administrator does not approve a 
     State program, the Administrator shall notify the State in 
     writing of any revisions or modifications that are necessary 
     to obtain approval.
       ``(3) Withdrawal of state authorization.--
       ``(A) In general.--If the Administrator determines after 
     public hearing that a State program approved under paragraph 
     (1) no longer meets the criteria of paragraph (2), the 
     Administrator shall so notify the State in writing. If 
     appropriate corrective action is not taken within a 
     reasonable time (not to exceed 90 days after notification), 
     the Administrator shall withdraw authorization of the program 
     and establish a Federal program under this section.
       ``(B) Notification.--The Administrator shall not withdraw 
     authorization of a State program unless the Administrator 
     first notifies the State and makes public in writing the 
     reasons for the withdrawal.
       ``(4) No preemption of state programs.--Nothing in this 
     subsection affects the authority of a State or political 
     subdivision of a State to establish or continue in effect any 
     regulation or any other measure relating to pollution 
     prevention.
       ``(n) Reports.--
       ``(1) In general.--Not later than 4 years after the date of 
     enactment of this section and not less frequently than every 
     3 years thereafter, the Administrator shall submit a report 
     to the President and Congress that describes the pollution 
     prevention plans that have been prepared under this section.
       ``(2) Matters to be addressed.--A report under paragraph 
     (1) shall include--
       ``(A) a detailed analysis that indicates the progress 
     achieved toward any pollution prevention goals established by 
     the Administrator under section 6604 of the Pollution 
     Prevention Act of 1990 (42 U.S.C. 13103); and
       ``(B) a detailed analysis of the steps that need to be 
     taken to ensure that the goals are achieved, including an 
     identification of the industrial categories or subcategories 
     that should be the highest priority for pollution prevention 
     measures and that need improvement with respect to pollution 
     prevention.

     ``SEC. 317. SMALL BUSINESS POLLUTION PREVENTION COMPLIANCE 
                   AND TECHNICAL ASSISTANCE PROGRAM.

       ``(a) Establishment of Program.--The Administrator shall 
     establish a small business pollution prevention compliance 
     and technical assistance program to assist owners and 
     operators of facilities in identifying and applying methods 
     of pollution prevention.
       ``(b) Elements of Program.--The program under subsection 
     (a) shall--
       ``(1) provide compliance assistance, technical assistance, 
     and other assistance to small businesses;
       ``(2) use funds provided under this subsection for matching 
     grants to State and local government agencies for programs to 
     promote the use of pollution prevention techniques by small 
     businesses; and
       ``(3) allow small businesses to comply with the pollution 
     prevention planning requirements of this by title complying 
     with subsection (c).
       ``(c) Use of Manual and Checklist In Lieu Of Pollution 
     Prevention Plan.--
       ``(1) In general.--The Administrator may by regulation 
     allow a small business in a commercial sector for which a 
     pollution prevention opportunity assessment manual and 
     checklist have been published under paragraph (2) to comply 
     with the pollution prevention planning requirements of 
     subsections (a) and (b) of section 316 by completing the 
     checklist and retaining on site the manual and checklist in 
     lieu of preparing a pollution prevention plan.
       ``(2) Contents of manual and checklist.--The Administrator 
     may publish a manual and checklist for any commercial sector 
     by the use of which a small business in the commercial sector 
     would develop--
       ``(A) a statement of management policy regarding pollution 
     prevention;
       ``(B) a written certification by the owner or operator of 
     the facility regarding the accuracy and completeness of the 
     plan;
       ``(C) 2- and 5-year pollution prevention goals for targeted 
     production processes, including a numerical statement 
     regarding the intended reduction in the quantity of each 
     toxic chemical produced or used and each toxic chemical 
     generated as a byproduct;

[[Page S4758]]

       ``(D) a statement of progress achieved toward previously 
     submitted pollution prevention goals;
       ``(E) an estimate of the costs associated with toxic 
     chemical purchase, use, and waste management;
       ``(F) an evaluation of production processes and material, 
     storage, and treatment practices;
       ``(G) an evaluation of toxic use reduction and source 
     reduction opportunities; and
       ``(H) an economic impact analysis of options for achieving 
     reductions in toxic chemical use and byproduct generation.''.
       (b) Civil Action.--Section 326(a)(1)(A) of the Emergency 
     Planning and Community Right-To-Know Act of 1986 (42 U.S.C. 
     11046(a)(1)(A)) is amended by adding at the end the 
     following:
       ``(v) Complete and submit a pollution plan summary or 
     pollution plan progress report under section 316.''.
       (c) Table of Contents.--The table of contents in section 
     300(b) of the Emergency Planning and Community Right-To-Know 
     Act of 1986 (42 U.S.C. prec. 11001) is amended by striking 
     the item relating to subtitle C and inserting the following:

              ``Subtitle C--Pollution Prevention Planning

``Sec. 316. Pollution prevention plans.
``Sec. 317. Small business pollution prevention compliance and 
              technical assistance program.

                  ``Subtitle D--General Provisions.''.

     SEC. 203. INFORMATION GATHERING AND ACCESS.

       Section 325 of the Emergency Planning and Community Right-
     To-Know Act of 1986 (42 U.S.C. 11045) is amended by adding at 
     the end the following:
       ``(g) Provision of Information and Records; Inspections.--
       ``(1) Definitions.--In this subsection:
       ``(A) Authorized officer.--The term `authorized officer' 
     means--
       ``(i) an officer, employee, or representative of the 
     Administrator; or
       ``(ii) an officer, employee, or representative of an 
     authorized State carrying out that section 316.
       ``(B) Authorized state.--The term `authorized state' means 
     a State that is authorized to carry out and enforce section 
     316 under section 317.
       ``(2) Provision of information and records.--At the request 
     of an authorized officer, a person who has or may have 
     information relevant to the identification, nature, or 
     quantity of materials, including hazardous chemicals, 
     extremely hazardous substances, toxic chemicals, or other 
     materials subject to this title that may have been 
     manufactured, processed, or otherwise used, stored, or 
     otherwise managed (including recycling, treating, combusting, 
     releasing, or transferring from a facility subject to the 
     requirements of this title) shall--
       ``(A) furnish to the authorized officer information 
     pertaining to the identification, nature, and quantity of the 
     materials; and
       ``(B) at the option and expense of the person--
       ``(i) afford the authorized officer access at all 
     reasonable times to the facility or location to inspect and 
     copy all documents and records relating to the 
     identification, nature, and quantity of the material; or
       ``(ii) copy and furnish to the authorized officer all such 
     documents and records.
       ``(3) Inspections.--
       ``(A) In general.--At the request of an authorized officer, 
     the owner or operator of a facility subject to the 
     requirements of this title shall permit the authorized 
     officer to enter, at reasonable times--
       ``(i) the facility; or
       ``(ii) any other facility, establishment, or other place or 
     property owned or operated by the owner or operator of the 
     facility, if, in the opinion of the authorized officer, entry 
     is needed to determine compliance with and enforce this title 
     with respect to the facility.
       ``(B) Samples.--An authorized officer may inspect and 
     obtain--
       ``(i) samples from any facility subject to the requirements 
     of this title or from a facility, establishment, or other 
     place or property described in subparagraph (A)(ii); or
       ``(ii) samples of any containers of toxic chemicals or 
     other materials maintained at the facility.
       ``(C) Prompt completion.--An inspection under this 
     paragraph shall be completed with reasonable promptness.
       ``(D) Receipt for samples and copies of analyses.--If an 
     authorized officer obtains a sample under subparagraph (B), 
     the authorized officer shall--
       ``(i) before leaving the premises, give to the owner or 
     operator of the facility a receipt describing the sample 
     obtained and, if requested, a portion of the sample; and
       ``(ii) furnish promptly to the owner or operator of the 
     facility a copy of the results of any analysis made of the 
     sample.
       ``(4) Compliance orders.--
       ``(A) Issuance.--If the owner or operator of a facility 
     failed to comply with a request of an authorized officer 
     under this subsection, the Administrator or authorized State 
     may, after such notice and opportunity for consultation as is 
     reasonably appropriate under the circumstances, issue an 
     order directing compliance with the request.
       ``(B) Civil action.--
       ``(i) In general.--The Administrator may request the 
     Attorney General to commence a civil action to compel 
     compliance with a request or order under this subsection.
       ``(ii) Relief.--If the court finds that there is a 
     reasonable basis on which to believe that there may be a 
     violation of this title, unless the court finds that, under 
     the circumstances of the case, the request or order under 
     this subsection was arbitrary and capricious, an abuse of 
     discretion, or otherwise not in accordance with law, the 
     court--

       ``(I) shall enter an order directing compliance with the 
     request or order; and
       ``(II) may assess a civil penalty of not more than $10,000 
     for each day of noncompliance.

       ``(5) Other authority.--Nothing in this subsection 
     precludes the Administrator or an authorized State from 
     securing access or obtaining information in any other lawful 
     manner.''.

     SEC. 204. PUBLIC AVAILABILITY.

       Section 313(j) of the Emergency Planning and Community 
     Right-To-Know Act of 1986 (42 U.S.C. 11023(j)) is amended in 
     the second sentence by striking ``on a cost reimbursable 
     basis''.

     SEC. 205. FEDERAL FACILITIES.

       Section 329(7) of the Emergency Planning and Community 
     Right-To-Know Act of 1986 (42 U.S.C. 11049(7)) is amended by 
     inserting before the period at the end the following: ``or 
     the United States''.

     SEC. 206. ENFORCEMENT.

       Section 325(c)(1) of the Emergency Planning and Community 
     Right-To-Know Act of 1986 (42 U.S.C. 11045(b)(1)) is amended 
     by striking ``or 313'' and inserting ``, 313, or 316''.
                                  ____

                                                U.S. Environmental


                                            Protection Agency,

                                     Washington, DC, May 20, 1997.
     Hon. Frank Lautenberg,
     U.S. Senate,
     Washington, DC.
       Dear Senator Lautenberg: I am writing to thank you for your 
     leadership on community right to know. As you are aware, 
     expanding the public's right to know about harmful pollutants 
     in our communities is a top priority for this Administration. 
     We understand that your bill, The Right to Know More and 
     Pollution Prevention Act of 1997, seeks to advance community 
     right to know, pollution prevention planning and the 
     information available to the public on chemical use.
       This Administration believes that putting environmental and 
     public health information into the hands of the American 
     people is one of the most effective ways to reduce local 
     pollution and prevent it from occurring in the future. In 
     fact, the Agency recently made final a rule to add seven new 
     industry categories to the Toxics Release Inventory (TRI), 
     increasing the number of covered facilities to 31,000--a 
     thirty percent increase. During the coming year, we will be 
     working on ways to further improve TRI, including a 
     stakeholder process to address reporting burdens, an 
     examination of types of data collected, consideration of new 
     thresholds for persistent, bioaccumulating toxic chemicals 
     and developing options regarding chemical use information.
       I look forward to working with you in the future to further 
     the public's right to know about environmental health threats 
     in their homes, schools and communities.
           Sincerely,
     Carol M. Browner.
                                  ____

                                              U.S. Public Interest


                                               Research Group,

                                     Washington, DC, May 20, 1997.
       Dear Senator Lautenberg: We are writing on behalf of U.S. 
     PIRG and the State PIRGs with more than a million members 
     nation wide, to express our support for the Right to Know 
     More and Pollution Prevention Act of 1997. This bill will 
     dramatically improve the amount and quality of information 
     that citizens count on to keep themselves and their children 
     safe. This bill will also encourage pollution prevention. The 
     reduction of toxic chemical use and waste is urgent while 
     waste generation is steadily increasing nationwide, except in 
     New Jersey and Massachusetts where companies are required by 
     state law to collect and report toxic use data. The Right to 
     Know More and Pollution Prevention Act of 1997 will reverse 
     the dangerous trend for the rest of the nation.
       The Community Right to Know Act is the best source of 
     public information about toxic pollution and is lauded by the 
     administration, environmentalists, and often industry leaders 
     as one of the most effective environmental protections. 
     Unfortunately, reporting under this law is woefully 
     inadequate. Less than 5% of pollution information is reported 
     to the public. We need to protect and expand the public's 
     Right to Know. The Right to Know More and Pollution 
     Prevention Act of 1997 will expand the public's Right to Know 
     to include:
       1. Toxics use reporting which tells the public about toxic 
     chemicals transported through their neighborhoods; produced, 
     used and stored in the work place and put into consumer 
     products.
       2. More complete data on toxic emissions including 
     information from all major industrial sources of toxic 
     pollution and data on extremely hazardous substances like 
     dioxins and mercury which are currently not collected under 
     the law.
       3. Pollution Prevention Planning which will direct 
     companies to develop pollution prevention plans by setting 
     their own goals for pollution reduction.
       The public has a right to know more than they currently do 
     about toxic chemicals. In addition, preventing pollution must 
     be our

[[Page S4759]]

     goal in light of the data revealing the steady rise in waste 
     creation throughout the nation. We hope each Senator makes 
     this legislation a top environmental priority.
           Sincerely,
     Carolyn Hartmann,
       Environmental Program Director.
     Andrea Askowitz,
       Right to Know Campaign Coordinator.
                                  ____



                             Environmental Information Center,

                                     Washington, DC, May 19, 1997.
     Hon. Frank Lautenberg,
     U.S. Senate,
     Washington, DC.
       Dear Senator Lautenberg: I want to express the support and 
     appreciation of the Environmental Information Center for your 
     efforts to expand the Emergency Planning and Community Right 
     to Know Act. Your efforts should provide additional and 
     useful information about toxic chemicals to every community 
     and family in the country.
       The last decade has proven how well community right to know 
     laws work. You know well the success of the more 
     comprehensive facility reporting statute in New Jersey, and 
     we commend you for seeking to expand use data to better 
     inform workers and families about toxic chemicals in their 
     communities. In addition, bill language aimed at improving 
     pollution prevention will help to eliminate problems before 
     they occur.
       We will support early consideration and passage of this 
     legislation and look forward to working with you on this 
     bill.
           Sincerely,
                                                  Philip E. Clapp,
                                               Executive Director.
                                 ______
                                 
      By Mr. NICKLES:
  S. 770. A bill to encourage production of oil and gas within the 
United States by providing tax incentives, and for other purposes; to 
the Committee on Finance.


          the domestic oil and gas production and recovery act

  Mr. NICKLES. Mr. President, I rise today to introduce the Domestic 
Oil and Gas Production and Preservation Act. This legislation is an 
effort to help revive our domestic oil and gas industry which plays 
such a vital role in our national security. If our domestic industry is 
to survive, then Congress needs to act now to provide tax incentives to 
encourage production in America.
  Since the early 1980's, oil and gas extraction employment has been 
cut in half. Employment in the oil and gas industry has declined by 
500,000 since 1984. Imports of crude oil products were $68 billion in 
1996, up 24 percent over last year and the import dependency ratio now 
exceeds 50 percent. From 1973 to 1996, crude oil production dropped 44 
percent in the lower 48 States. We must take action now to save 
domestic production not only for the sake of the oil and gas industry 
but for the sake of the national security of this Nation.
  To date, the Clinton administration has done nothing to encourage 
domestic production. In fact, in 1996, crude oil reserves continued to 
decline by 788 million barrels. Natural gas reserves fell by 2,600 Bcf 
to 162,415 Bcf. In the President's budget there is nothing to aid this 
industry. That is why I am introducing this bill today.
  The Domestic Oil and Gas Production and Preservation Act is intended 
to do just what its name implies--encourage oil and gas production and 
preserve and revitalize the domestic oil and gas industry. This bill 
would accomplish these goals through specific tax proposals. Section 2 
of the bill would allow current expensing of geological and geophysical 
costs incurred domestically including the Outer Continental Shelf. 
These costs are an important and integral part of exploration and 
production for oil and natural gas, and should be expensed.
  In addition to the G&G expensing, this bill provides for the 
elimination of the net income limit on percentage depletion. Currently, 
the net income limitation requires percentage depletion to be 
calculated on a property-by-property basis and disallows depletion to 
the extent it exceeds the net income from a particular property, thus 
discouraging producers from investing income from other oil and gas 
properties to maintain marginal wells.
  Furthermore, this bill clarifies that delay rental payments are 
deductible, at the election of the taxpayer, as ordinary and necessary 
business expenses. This clarifies an otherwise gray area in Treasury 
regulations and eliminates costly administrative and compliance burdens 
on both taxpayers and the IRS. It would also extend the 90-day 
prepayment period to 180 days for determining when deductions may be 
taken on certain oil and gas investments. Harsh winter conditions in 
many States make the current 90-day limitation for commercial drilling 
impractical.
  Lastly, section 6 includes hydro injection as a tertiary recovery 
method for purposes of the enhanced oil recovery credit. Although the 
Treasury Department is tasked with continued evaluations and editions 
to the list of recovery methods covered under the EOR, they have proven 
notably lax in pursuing this objective. By legislating this outcome, 
this bill keeps domestic production of our endangered marginal wells on 
the cutting edge of available technology.
  Collectively, the provisions of this bill provide much-needed 
incentives to an industry that is vital to our national security. The 
sooner the administration and Congress acknowledge the critical 
importance of the domestic oil and gas industry and stop burdening this 
industry with high taxes and regulatory obstacles, the sooner we can 
take the necessary actions to preserve and revitalize this important 
sector of our economy.
  Mr. President, I ask unanimous consent that a summary of the bill be 
printed in the Record.

    Summary of the Domestic Oil and Gas Production and Recovery Act


 Section 2. Election to expense geological and geophysical expenditures

     Current law treatment
       G&G costs are not deductible as ordinary and necessary 
     business expenses but are treated as capital expenditures 
     recovered through cost depletion over the life of the field. 
     G&G expenditures allocated to abandoned prospects are 
     deducted upon such abandonment.
     Reasons for change
       These costs are an important and integral part of 
     exploration and production for oil and natural gas. They 
     affect the ability of domestic producers to engage in the 
     exploration and development of our national petroleum 
     reserves. Thus, they are more in the nature of an ordinary 
     and necessary cost of doing business. These costs are similar 
     to research and development costs for other industries. For 
     those industries such costs are not only deductible but a tax 
     credit is available.
       Crude oil imports are at an all-time high which makes the 
     U.S. vulnerable to sharp oil price increases or supply 
     disruptions. Domestic exploration and production must be 
     encouraged now to offset this potential threat to national 
     security and our economy. Allowing current deductibility of 
     G&G costs would increase capital available for domestic 
     exploration and production activity.
       The technical ``infrastructure'' of the oil services 
     industry, which includes geologists and engineers, has been 
     moving into other industries due to reduced domestic 
     exploration and production. Stimulating exploration and 
     development activities would help rebuild the critical oil 
     services industry.
       Encouraging the industry to use the best technology 
     available and to reduce its environmental footprint are 
     important public policy reasons to clarify that these 
     ordinary and necessary business expenses for the oil and gas 
     industry should be expensed.


Section 3. Elimination of net income limitation on percentage depletion 
                            for oil and gas

       The net income limitation severely restricts the ability of 
     independent producers to use percentage depletion. Depletion 
     is subject to many other limitations. First, it may only be 
     taken by independent producers and royalty owners and not 
     by integrated oil companies. Also, depletion may only be 
     claimed up to specific daily production levels (1,000 
     barrels of oil or 6,000 mcf of natural gas). The depletion 
     allowance is further limited to 65% of taxable income.
       The net income limitation requires percentage depletion to 
     be calculated on a property by property basis and disallows 
     percentage depletion to the extent it exceeds the net income 
     from a particular property. The current requirement creates a 
     nightmarish quagmire of record keeping, paperwork and 
     compliance for taxpayers and the IRS. The typical independent 
     producer can have numerous oil and gas properties, and many 
     of them can be marginal properties (with high operating costs 
     and low production yields). During periods of low prices, the 
     producer may not have net income from a particular property, 
     especially from these marginal properties. In this situation, 
     when domestic production is most susceptible to being plugged 
     and abandoned, the net income limitation discourages 
     producers from investing income from other oil and gas 
     properties to maintain marginal wells.


 proposal: eliminate the net income limitation on percentage depletion

     Reasons for change
       The Interstate Oil and Gas Compact Commission (IOGCC) 
     estimates there are more than 433,000 marginal wells in the 
     U.S. which produced more than 333 million barrels of oil in 
     1995. This represented more than 18% of all the oil produced 
     in the U.S. (excluding Alaska). The United States is the only 
     country with significant production from marginal wells. They 
     represent the ultimate in

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     conservation, since once wells are plugged and abandoned 
     access to the remaining resource is often lost forever. 
     Eliminating the net income limitation on percentage depletion 
     will encourage producers to keep marginally economic wells in 
     production and enhance optimum oil and natural gas resource 
     recovery. Relief would be focused to independent producers 
     and royalty owners.
       Eliminating the net income limitation on percentage 
     depletion would simplify record keeping and reduce the 
     administrative and compliance burden for taxpayers and the 
     IRS.


          section 4. election to expense delay rental payments

       Delay rental payments are made by producers to an oil and 
     gas lessor prior to drilling or production. Unlike bonus 
     payments (made by the producer in consideration for the grant 
     of the lease) which generally is treated as an advance 
     royalty and thus capitalized, producers have historically 
     been allowed to elect to deduct delay rental payments 
     under Treasury Regulations 1.612-3(c). However, in 
     September, 1995, the IRS issued a technical advice (LTR 
     9602002) stating that such payments are preproduction 
     costs subject to capitalization under Section 263A of the 
     Internal Revenue Code. The legislative history of Section 
     263A is unclear and subject to varying interpretation.


  Proposal: Clarify that delay rental payments are deductible, at the 
 election of the taxpayer, as ordinary and necessary business expenses

     Reasons for change
       In passing the Section 263A uniform capitalization rules, 
     Congress broadly intended to only affect the ``unwarranted 
     deferral of taxes.'' Congress did not intend to grant the IRS 
     the authority to repeal the well-settled industry practice of 
     deducting ``delay rentals'' as ordinary and necessary 
     business expenses.
       Treasury Reg. 1.612-3. states that, ``a delay rental is an 
     amount paid for the privilege of deferring development of the 
     property and which could have been avoided by abandonment of 
     the lease, or by commencement of development operations, or 
     by obtaining production.'' Such payments represent ordinary 
     and necessary business expenses, not an ``unwarranted 
     deferral of taxes.'' Given the clear disagreement over the 
     legislative history and the likelihood of costly and 
     unnecessary litigation to resolve the issue, clarification 
     would eliminate administrative and compliance burdens on 
     taxpayers and the IRS.


                 section 5. extension of spudding rule

       The Internal Revenue Code provides a ``spudding'' exception 
     to the ``economic performance rule'' in determining the year 
     in which deductions may be taken on certain oil and gas 
     investments. The economic performance rule will be satisfied, 
     in certain circumstances, when amounts are paid during the 
     preceding tax year so long as the well is spudded (the 
     initial boring of the hole) within 90 days of the beginning 
     of the following year.


       proposal: extend the 90 day prepayment period to 180 days

     Reasons for change
       Harsh winter weather conditions in many states and 
     locations make the 90 day limitation for the commencement of 
     drilling impractical. Moreover, the current shortage of 
     skilled drilling rig personnel and the high utilization rate 
     of land-based drilling equipment, make it difficult, and in 
     some parts of the country impossible, to meet the 90-day 
     requirement. This personnel shortage has resulted from 
     skilled workers moving into other industries due to vastly 
     reduced domestic exploration and production activity over the 
     past few years.
       Expanding the 90 day prepayment period to 180 days would 
     ease the industry's ability to attract capital.


seciton 6. include hydro injection as a tertiary recovery method under 
                  the enhanced oil recovery tax credit

       Marginal wells are our most endangered domestic energy 
     resource. By providing incentives for new methods for 
     enhanced recovery, we ensure domestic production of the 
     marginal wells remains on the cutting edge of available 
     technology.

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