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[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]

LESSONS FROM THE LABORATORIES OF DEMOCRACY: ENVIRONMENTAL INNOVATION IN 
                               THE STATES

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

                                HEARING

                               before the

               SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
               NATURAL RESOURCES, AND REGULATORY AFFAIRS

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 13, 2000

                               __________

                           Serial No. 106-263

                               __________

       Printed for the use of the Committee on Government Reform

  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform

                  U.S. GOVERNMENT PRINTING OFFICE
74-705                     WASHINGTON : 2001

____________________________________________________________________________
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                     COMMITTEE ON GOVERNMENT REFORM

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
STEPHEN HORN, California             PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida                PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia            CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana           ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
JOE SCARBOROUGH, Florida             CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South     DENNIS J. KUCINICH, Ohio
    Carolina                         ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia                    DANNY K. DAVIS, Illinois
DAN MILLER, Florida                  JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas             JIM TURNER, Texas
LEE TERRY, Nebraska                  THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois               HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California                             ------
PAUL RYAN, Wisconsin                 BERNARD SANDERS, Vermont 
HELEN CHENOWETH-HAGE, Idaho              (Independent)
DAVID VITTER, Louisiana

                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
                     James C. Wilson, Chief Counsel
                        Robert A. Briggs, Clerk
                 Phil Schiliro, Minority Staff Director
                                 ------                                

   Subcommittee on National Economic Growth, Natural Resources, and 
                           Regulatory Affairs

                  DAVID M. McINTOSH, Indiana, Chairman
PAUL RYAN, Wisconsin                 DENNIS J. KUCINICH, Ohio
BOB BARR, Georgia                    TOM LANTOS, California
LEE TERRY, Nebraska                  PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon                  BERNARD SANDERS, Vermont
HELEN CHENOWETH-HAGE, Idaho          HAROLD E. FORD, Jr., Tennessee
DAVID VITTER, Louisiana

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
                    Marlo Lewis, Jr., Staff Director
              Barbara F. Kahlow, Professional Staff Member
                       Gabriel Neil Rubin, Clerk
                 Elizabeth Mundinger, Minority Counsel

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 13, 2000...............................     1
Statement of:
    Hackney, Joe, North Carolina State Representative, chairman, 
      environment committee, National Conference of State 
      Legislatures; Lynn Scarlett, executive director, Reason 
      Public Policy Institute; Jim Seif, secretary, Pennsylvania 
      Department of Environmental Protection; Langdon Marsh, 
      director, Oregon Department of Environmental Quality; Karen 
      Studders, commissioner, Minnesota Pollution Control Agency; 
      Lisa Polak Edgar, deputy director, Florida Department of 
      Environmental Protection; Erik Olson, senior attorney, 
      Natural Resources Defense Council; and Christopher Recchia, 
      deputy commissioner, Vermont Department of Environmental 
      Conservation...............................................    32
Letters, statements, etc., submitted for the record by:
    Chenoweth-Hage, Hon. Helen, a Representative in Congress from 
      the State of Idaho, prepared statement of..................    30
    Edgar, Lisa Polak, deputy director, Florida Department of 
      Environmental Protection, prepared statement of............   115
    Hackney, Joe, North Carolina State Representative, chairman, 
      environment committee, National Conference of State 
      Legislatures, prepared statement of........................    35
    Kucinich, Hon. Dennis J., a Representative in Congress from 
      the State of Ohio, prepared statement of...................    23
    Marsh, Langdon, director, Oregon Department of Environmental 
      Quality, prepared statement of.............................    85
    Olson, Erik, senior attorney, Natural Resources Defense 
      Council, prepared statement of.............................   123
    Recchia, Christopher, deputy commissioner, Vermont Department 
      of Environmental Conservation, prepared statement of.......   137
    Ryan, Hon. Paul, , a Representative in Congress from the 
      State of Wisconsin:
        Dr. Goklany's papers.....................................     4
        Prepared statement of....................................    18
    Scarlett, Lynn, executive director, Reason Public Policy 
      Institute, prepared statement of...........................    56
    Seif, Jim, secretary, Pennsylvania Department of 
      Environmental Protection, prepared statement of............    76
    Studders, Karen, commissioner, Minnesota Pollution Control 
      Agency, prepared statement of..............................    91

 
LESSONS FROM THE LABORATORIES OF DEMOCRACY: ENVIRONMENTAL INNOVATION IN 
                               THE STATES

                              ----------                              

                     WEDNESDAY, SEPTEMBER 13, 2000

                  House of Representatives,
 Subcommittee on National Economic Growth, Natural 
                 Resources, and Regulatory Affairs,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:45 p.m., in 
room 2447, Rayburn House Office Building, Hon. Paul Ryan (vice 
chairman of the subcommittee) presiding.
    Present: Representatives Ryan, Terry, Kucinich, and 
Sanders.
    Staff present: Marlo Lewis, Jr., staff director; Barbara F. 
Kahlow and Jonathan Tolman, professional staff members; Bill 
Waller, counsel; Gabriel Neil Rubin, clerk; Elizabeth 
Mundinger, minority counsel; Ellen Rayner, minority chief 
clerk; and Jean Gosa, minority assistant clerk.
    Mr. Ryan. The hearing will come to order.
    This is a hearing of the Subcommittee on National Economic 
Growth, Natural Resources, and Regulatory Affairs. I am Paul 
Ryan from Wisconsin.
    I will begin with a brief opening and then I will yield to 
my colleague from Nebraska, Mr. Terry, and then the ranking 
member, Mr. Kucinich, who I think is on his way over.
    Let me begin by thanking the witnesses, all of you, for 
coming some great distances to testify today. We are very 
interested in what you have to say on this very enlightening 
and important topic.
    In the Almanac of American Politics, 2000, Michael Barone 
wrote, ``the initiative in shaping public policy is leeching 
out of Washington to the States, to the localities, to the 
private sector.''
    Although Barone primarily had in mind State, local, and 
private sector achievements in welfare reform, crime reduction 
and wealth creation, an impressive, albeit seldom publicized 
shift in the initiative from Washington to the States is also 
occurring in environmental policy.
    Today's hearing will showcase innovative environmental 
solutions that may surprise many of us in Washington-solutions 
tested in the ``laboratories of democracy,'' otherwise known as 
the States.
    Today's panel of witnesses include some of America's 
leading environmental policy innovators. I am very pleased to 
welcome Langdon Marsh, the director of Oregon's Department of 
Environmental Quality; Jim Seif, secretary of Pennsylvania's 
Department of Environmental Protection; Karen Studders, the 
commissioner of Minnesota's Pollution Control Agency; and Lisa 
Polak Edgar, the deputy director of Florida's Department of 
Environmental Protection.
    Each of you has a major environmental success story, or 
several such stories, to tell. We are eager to learn why your 
agency instituted those reforms, what results you have achieved 
and what lessons, if any, your experience offers for other 
State and Federal policymakers.
    I would also like to extend a warm welcome to North 
Carolina Representative Joe Hackney, who chairs the National 
Conference of State Legislatures' Environment Committee; and 
Lynn Scarlet, the executive director of the Reason Foundation 
Public Policy Institute.
    Mr. Hackney, among other things, will discuss what changes 
in national policy would encourage the kinds of environmental 
success stories our State agency witnesses will be sharing with 
us today.
    Ms. Scarlett's organization maintains the most 
comprehensive research program on State environmental 
innovation of any think tank in the country. Thank you for your 
intellectual leadership.
    Finally, I would like to welcome our minority witnesses, 
Erik Olson, the senior attorney at the Natural Resources 
Defense Council, and Christopher Recchia, a member of the 
Northeast States for Coordinated Air Use Management and deputy 
commissioner of the Vermont Department of Environmental 
Conservation.
    Over the past 30 years, the United States has taken a 
largely top-down command-and-control, one-size-fits-all 
approach to environmental protection.
    When the environmental problems facing this country were of 
the big and obvious variety--``haystack'' problems like burning 
rivers, soot-belching smokestacks, and haphazardly dumped toxic 
wastes-the technologically prescriptive, centralized-from-
Washington approach was feasible and reasonably effective.
    However, after three decades, the old approach is beginning 
to produce diminishing returns and even, in some cases, 
counterproductive results.
    For example, Superfund was an extremely popular program 
when it was enacted. But today, most observers acknowledge 
Superfund is mired in litigation, it squanders billions of 
dollars, and yields little discernible benefit to public 
health.
    Another example, one that I am very familiar with as a 
Wisconsinite, is the oxygenate requirement for gasoline in the 
Clean Air Act Amendments of 1990. To meet that mandate, 
petroleum producers had to put MTBE in the gasoline supply. 
Regrettably, MTBE is now contaminating groundwater in some 
areas of the country. We really felt this one in my home State.
    The original centralized, command-and-control approach 
cannot easily solve today's more elusive and dispersed ``needle 
in a haystack'' issues, such as species habitat conservation, 
agricultural runoff, and watershed management.
    Yet, national priorities and methods have changed little 
since the Environmental Protection Agency was founded in 1970 
with its major focus on point source pollution and traditional 
toxins.
    While Federal environmental policy has largely remained 
static over the last several decades, State environmental 
agencies have been moving to fill the void. States are setting 
priorities, developing partnerships with the EPA and the 
private sector and achieving measurable results.
    States are experimenting with incentive-based programs that 
foster technological innovation and encourage companies to go 
beyond mere compliance.
    In addition, States are basing environmental decisions on 
sound science, risk assessment, and other tools that maximize 
benefits with limited resources.
    Ultimately, States may be the key to successfully solving 
the environmental issues of the 21st century.
    Of course, the topic of today's hearing is not without 
controversy. Some critics of State environmental performance 
warn that any shift of authority from Washington to the States 
will trigger a ``race to the bottom.''
    The critics fear that absent rigorous control by the EPA 
the States will compete for business investment by lowering 
environmental standards and relaxing environmental enforcement.
    In part, such fears are based upon the opinion that the 
States allowed or even promoted environmental degradation until 
President Nixon and Congress created the EPA in 1970 and 
Federalized environmental policy.
    This reading of the historical record is very questionable. 
Recently, using the EPA data, Indur Goklany, a manager of 
science and engineering at the U.S. Department of Interior, 
shows that air quality began to improve substantially in the 
decade before federalization, especially for pollutants, such 
as particulate matter and sulfur dioxide, which were generally 
recognized as public health problems at the time.
    Goklany further notes that between 1960 and 1970, the 
number of State air quality programs increased from 8 to 50. 
That is pretty startling. Many jurisdictions tightened their 
air quality standards during that decade. Such actions, some of 
which were quite innovative, look more like a race to the top 
than a race to the bottom.
    I would like to request that two of Dr. Goklany's papers be 
included in the record. Without objection.
    [The information referred to follows:]

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    Mr. Ryan. Whether or not Goklany's historical scholarship 
is correct, current reality suggests that States are ready, 
willing, and able to exercise greater authority and 
responsibility for environmental protection.
    States today are running most of the clean water programs, 
clean air programs, safe drinking water programs, and toxic 
cleanup programs Congress created.
    According to the Environmental Council of States, States 
conduct about 75 to 80 percent of environmental enforcement 
actions taken by the EPA and the States combined, including at 
least 97 percent of all enforcement inspections.
    States also do most of the spending for environmental 
protection--a point that should not be overlooked--about $12.5 
billion in fiscal year 1996, which is almost twice as much as 
the EPA's entire budget.
    States are prolific environmental legislators, enacting 
over 700 environmental laws in 1997 alone, at least half of 
which dealt with programs not mandated by Federal law. 
Moreover, 80 percent of the States have at least one Clean Air 
Standard that exceeds the Federal minimum standard, according 
to a study by the Council of State Governments.
    Clearly, Washington does not have a monopoly on 
environmental experience, wisdom, or talent. I am very eager to 
learn from those of you who have traveled great distances, who 
work in the environmental laboratories of democracy.
    I would like to thank all the witnesses for participating 
in today's hearing.
    [The prepared statement of Hon. Paul Ryan follows:]

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    Mr. Kucinich. Thank you very much, Mr. Chairman. I 
appreciate the fact that this hearing is being held on State 
innovations in environmental policy.
    I welcome all the witnesses to our committee room.
    Today we are going to hear from a few of the States that 
have taken the lead in finding new and innovative ways to more 
efficiently and effectively implement our environmental laws. 
Many of these programs are still in the testing phase; however, 
they hold a great deal of promise and I am looking forward to 
hearing about them.
    We will hear about States that are shifting resources to 
regional offices that are better suited to address local 
issues, States that are shifting their focus to the results of 
environmental protections instead of the process, States that 
are focusing on incentives instead of punishment, and States 
that are working together to implement changes that would not 
be feasible if only applied within one State's borders. All of 
these ideas are worth exploring and I look forward to hearing 
about them.
    Mr. Chairman, because different States have different 
environmental problems, they should be able to target local 
priorities. In addition, States often have expertise in local 
issues and can more easily consult with the people in the 
affected community. They are laboratories for new ideas--some 
of which will work well for that one State and other ideas 
which may improve environmental performance across the Nation.
    In many respects, the Federal Government has recognized the 
important role of the States. A number of Federal laws call for 
the Environmental Protection Agency to delegate to the States 
primary responsibility for program implementation. States have 
assumed responsibility for approximately 70 percent of the 
programs eligible for delegation. The administration has passed 
a federalism Executive Order encouraging State participation in 
the development and implementation of Federal law. In addition, 
it has established programs like the National Environmental 
Performance Partnerships System which provide greater 
flexibility and encourage better communication between the 
Federal and State governments. Although there is still room for 
improvement, we should not forget that the current system of 
national environmental laws has been a great success.
    Mr. Chairman, many States have invested in a cleaner 
environment by passing laws that are more stringent than 
Federal minimum standards. And others, like the ones we will 
hear about today, are taking the lead in developing 
environmentally sound innovations. Nevertheless, not every 
State has made the same commitment to a cleaner environment. In 
fact, by 1995, 19 States have adopted some version of a clause 
which prevents the States from adopting rules that are more 
stringent than Federal standards. States often need a nudge 
from the Federal Government. For instance, when there were 
significant outbreaks from cryptosporidium in tap water, and 
over 100 people died, no State adopted a cryptosporidium 
standard until the Federal EPA mandated one.
    We should not forget the basic fact that pollutants are 
carried in the air, rivers, lakes, rain, crops and otherwise 
across State lines. And, in some cases, the polluter causes 
greater damage in neighboring States than in its own home 
State.
    The Federal Government needs to stay involved in 
environmental protection in order to: address interstate 
transportation of pollution; establish and enforce minimum 
standards; ensure a level playing field so one State does not 
gain an unfair advantage over others; help States develop 
environmental protection plans that are effective and 
efficient; provide a means of sharing technologies and 
expertise; enforce the law when local political pressures or 
the lack of resources or expertise makes it difficult for 
States to enforce the law; and prevent a ``race to the bottom'' 
when States lower environmental standards in order to court 
business.
    In conclusion, Mr. Chairman, I look forward to hearing 
about important State innovations and what we can do to 
encourage States to develop and implement successful ideas. 
However, I would like to do so in a manner that recognizes the 
Federal Government's critical role in protecting the public 
health and the environment.
    I ask unanimous consent to include relevant materials in 
the record and I thank the chair.
    Mr. Ryan. Without objection.
    [The prepared statement of Hon. Dennis J. Kucinich 
follows:]

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    Mr. Ryan. Mr. Sanders.
    Mr. Sanders. Thank you very much, Mr. Chairman, for holding 
this important hearing. I am especially pleased that a fellow 
Vermonter will be testifying on your panel, Chris Recchia, the 
deputy director of the Vermont Air Pollution Program.
    Mr. Chairman, I realize that the focus of this hearing will 
be on environmental initiatives in the States. The premise, as 
I understand it, is that giving States as much flexibility as 
possible in combating pollution is the best approach to take. 
Mr. Chairman, I do not fully believe in this premise and let me 
tell you why.
    Nationwide, more than 30 percent of residents still live in 
regions with poor air quality. Vermont is no exception. Even 
though Vermont has some of the toughest air quality standards 
in the Nation, our health and the health of our forests, lakes 
and streams continues to suffer from acid rain, ozone haze, 
mercury and dioxin deposition.
    This pollution is not coming from the State of Vermont. So 
the State of Vermont could do everything that it possibly could 
to correct the problem. It would not succeed. This pollution is 
a result of pollution from outdated fossil fuel power plants in 
different States.
    So, I think that is why we need a national perspective as 
well as encouraging States to develop their own local 
initiatives.
    In other words, the biggest threats to Vermont's 
environment are not under the control of Vermont. In some ways 
they are, but often they are not. They arrive in the winds in 
the form of air pollution emitted in other States.
    Vermonters have a proud tradition of protecting our 
environment. Yet despite this proud tradition of environmental 
stewardship, we have seen how pollution from outside our State 
has affected our mountains, lakes and streams.
    Acid rain caused from sulfur dioxide emissions outside 
Vermont has drifted through the atmosphere and scarred our 
mountains and poisoned our streams.
    Mercury has quietly made its deadly poisonous presence into 
the food chain of our fish to the point where health advisories 
have been posted for the consumption of several species.
    Despite Vermont's own tough air laws and small population, 
the EPA has considered air quality warnings in Vermont that are 
comparable to emissions consistent for much larger cities.
    Silently each night, pollution from outside Vermont seeps 
into our State and our exemplary environmental laws are 
powerless to stop or even limit the encroachment.
    The Clean Air Act of 1970 was a milestone law, which 
established national air quality standards for the first time 
and attempted to provide protection of populations who are 
affected by emissions outside their own local and State 
control.
    While the bill has improved air quality, there is a 
loophole in the law that needs to be fixed. More than 75 
percent of the fossil fuel fired plants in the United States 
began operation before the 1970 Clean Air Act was passed. As a 
result, they are ``grand fathered'' out from under the full 
force of its regulations.
    To end this loophole, I am a co-sponsor of the Clean 
Smokestacks Act introduced by Mr. Waxman. I am also a co-
sponsor of the Clean Power Plant Act introduced by Mr. Allen to 
crack down on mercury pollution. Congress must pass these laws 
as quickly as possible.
    Another important Federal environmental regulation that 
must be strengthened deals with the Corporate Average Fuel 
Economy [CAFE] standards. These standards are especially 
important today when American cars and light trucks are 
responsible for consuming 40 percent of the oil used in the 
United States.
    Twenty-five years ago Congress passed, with bipartisan 
support, the simple provision requiring cars and light trucks 
to go further on a gallon of gasoline. This sensible and 
efficient law, which was signed by President Gerald Ford, 
created a standard for the number of miles per gallon that cars 
and trucks must meet.
    In retrospect, it was one of the most successful 
environmental laws of all time, a Federal law signed by a 
Republican President.
    CAFE standards helped curb climate change by keeping 
millions of tons of carbon dioxide out of the atmosphere. They 
also cut pollution, improve air quality and help polluted 
regions achieve the goals of the Clean Air Act. CAFE standards 
provide an efficient and relatively painless way of achieving a 
cleaner and safer environment for all Americans.
    The CAFE standards program is a bargain for Americans 
because it saves them money. I think most of us know that.
    Let me just conclude, Mr. Chairman, by suggesting that I 
think it is important that we learn what various States around 
this country are doing, that we learn from each State. I am 
proud of the environmental record of the State of Vermont.
    But I do wish to emphasize that while we learn from each 
State, it would be irresponsible to suggest that the Federal 
Government does not have a very, very important role in 
protecting our environment.
    I thank you, Mr. Chairman, for the opportunity to make 
those remarks.
    Mr. Ryan. I thank you, Mr. Sanders. I thank you for your 
passion on this issue as well.
    I would also ask unanimous consent that Representative 
Chenoweth-Hage's statement be included in the record. Without 
objection.
    [The prepared statement of Hon. Helen Chenoweth-Hage 
follows:]

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    Mr. Ryan. First, let me swear in all the witnesses. Would 
each of you please stand?
    [Witnesses sworn.]
    Mr. Ryan. We will begin with Representative Hackney.

STATEMENTS OF JOE HACKNEY, NORTH CAROLINA STATE REPRESENTATIVE, 
 CHAIRMAN, ENVIRONMENT COMMITTEE, NATIONAL CONFERENCE OF STATE 
LEGISLATURES; LYNN SCARLETT, EXECUTIVE DIRECTOR, REASON PUBLIC 
POLICY INSTITUTE; JIM SEIF, SECRETARY, PENNSYLVANIA DEPARTMENT 
 OF ENVIRONMENTAL PROTECTION; LANGDON MARSH, DIRECTOR, OREGON 
     DEPARTMENT OF ENVIRONMENTAL QUALITY; KAREN STUDDERS, 
 COMMISSIONER, MINNESOTA POLLUTION CONTROL AGENCY; LISA POLAK 
  EDGAR, DEPUTY DIRECTOR, FLORIDA DEPARTMENT OF ENVIRONMENTAL 
  PROTECTION; ERIK OLSON, SENIOR ATTORNEY, NATURAL RESOURCES 
DEFENSE COUNCIL; AND CHRISTOPHER RECCHIA, DEPUTY COMMISSIONER, 
        VERMONT DEPARTMENT OF ENVIRONMENTAL CONSERVATION

    Mr. Hackney. Mr. Chairman and members of the subcommittee, 
I am Representative Joe Hackney, Speaker Pro Tem of the North 
Carolina House.
    I appear before you today on behalf of the National 
Conference of State Legislatures. I currently serve as the 
Chair of NCSL's Environment Committee of the Assembly on 
Federal Issues.
    NCSL is a bipartisan organization representing all State 
legislators from all 50 States and our Nation's commonwealths, 
territories, possessions, and the District of Columbia.
    The focus of NCSL's policies and advocacy activity is the 
preservation of State authority, protection against costly 
unfunded mandates, the promotion of fiscal integrity and the 
development and maintenance of workable Federal-State 
partnerships.
    I appreciate the invitation to speak to you today about the 
Federal-State relationship and the changes needed to assist 
States in further protecting and enhancing environmental 
quality.
    Let me say first of all that NCSL urges the Federal 
Government to renew its commitment to the Federal-State 
relationship in environmental protection. For nearly 40 years, 
Federal environmental laws have recognized the primacy of State 
governments.
    From the very first Federal law, Congress determined that 
States and local governments were in an optimal position to 
implement environmental standards that are established by the 
Federal Government.
    States acting in partnership with the Federal Government 
play an indispensable role in a mutual effort to protect 
natural resources and combat environmental degradation and 
pollution.
    New environmental problems have arisen and new approaches 
are required. Except for the amendments to the Safe Drinking 
Water Act of 1996 and the Clean Air Act in 1990, most of our 
major environmental acts were last visited in the 1980's.
    Although during that time we have made great progress, a 
significant amount of pollution no longer comes from the end of 
a pipe, but from some other source. We think improvements are 
needed.
    We want to urge Congress to use this hearing as the first 
step in a new commitment to the Federal-State partnership for 
the 21st century.
    We urge Congress and the new administration to work with 
NCSL and its Assembly on Federal Issues to convene regular 
summits of State, Federal and local lawmakers, administrators 
and other stakeholders to identify areas of our Nation's 
environmental law that are outdated, ways in which current laws 
and regulations can be modernized, and tools to improve the 
Federal-State relationship.
    It is time to move forward to the 21st century level in 
protecting our water and air. Together we need to identify 
smarter goals and strategies for keeping pollutants out of the 
water or air.
    We need to make much more progress in reducing the 
emissions from power plants and other stationary sources.
    We need to continue and expand upon the progress we have 
made in reducing mobile emissions. NCSL was a strong supporter 
of the move to low-sulfur gasoline. I might note that my State, 
North Carolina, was moving along on that track before EPA acted 
as well.
    We need to pay more attention as a Nation to whether the 
ways in which we grow our economy can have positive rather than 
negative effects on environmental protection. For example, we 
need to do a better job of preserving farms and open space as 
we grow.
    Together, we can move so much further ahead. The people 
expect us to lead in these matters and NCSL would be pleased to 
be a part of this effort.
    Let me make a few points in summarizing the rest of my 
testimony. No. 1, we commend the EPA in its efforts to 
encourage States to develop innovative approaches. We don't 
always find that those efforts work or are realized, but we 
support a more formalized working relationship between the 
States and the EPA which recognizes the role of the States and 
their agencies as partners in the decisionmaking process as 
contemplated in the original environmental statutes.
    Second, and this is important, I think, in the context of 
what others are going to say today, we recognize and support 
the role of the Federal Government in establishing uniform 
national environmental standards. But States must always have 
the right to go beyond these standards and use their creativity 
to pursue novel solutions to identified problems.
    In fact, in North Carolina our concentrated animal feeding 
operations laws are more comprehensive then EPA's. And we are 
moving ahead with research at the North Carolina State 
University to try and do the best job we can with that problem.
    Third, improved flexibility. States have a compelling 
interest in the uniform application and enforcement of Federal 
laws in order to prevent pollution havens and prevent States 
with lax enforcement from obtaining unfair economic advantages.
    But, States need as much administrative flexibility as 
possible, consistent with superior protection of our 
environment to achieve environmental protections. Several 
examples are given in the written text.
    Next, let me mention just briefly a greater Federal role 
when it comes to interstate pollution. We have to address 
interstate pollution. We are, at our December meeting, going to 
take up some aspects of that problem. We invite the 
participation of the Congress.
    We oppose any preemption attempts. We do not believe 
centralized decisionmaking in Federal courts for compensation 
for land use and other regulatory actions represents something 
that you should get into. That would be a major threat to our 
constitutional system of federalism.
    Improving the efficiency of the State and local process is 
an issue for State legislatures, not the Congress.
    We continue to oppose unfunded mandates.
    Let me just say in closing that the Federal-State 
partnership has been in many respects a success story. The 
public interest has been well served.
    Environmental standards--health-based air quality 
standards, water quality criteria which supports swimming, 
fishing, drinking and biological needs--all of these have given 
States environmental objectives that they can share, and each 
State can then implement programs by delegation to solve those 
problems.
    I appreciate the opportunity to appear before you today on 
behalf of the National Conference of State Legislatures. I 
welcome your questions on this testimony.
    [The prepared statement of Mr. Hackney follows:]

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    Mr. Ryan. Thank you, Representative Hackney.
    I would like to ask each of the witnesses if we could try 
to confine your remarks to the 5-minute rule, since there are 
so many witnesses and we would like to have ample time for 
questioning.
    Ms. Scarlett.
    Ms. Scarlett. Thank you, Congressman Ryan, Congressman 
Kucinich and Congressman Sanders and other members of the 
subcommittee for having these hearings.
    My name is Lynn Scarlett. I am executive director of Reason 
Public Policy Institute, a Los Angeles-based nonpartisan 
research organization.
    Briefly, we have experienced three decades, as many of the 
Members of Congress have pointed out here, of environmental 
policy since the first Earth Day. Those three decades have 
indeed yielded some successes, but there are four recurring 
policy challenges.
    First, how can policies better ensure environmental 
innovations, both technological and institutional innovations?
    Second, how can they better focus on results and take into 
account the many interrelated goals rather than a silo-by-silo 
or medium-by-medium approach?
    Third, how can they better foster private stewardship, give 
us a Nation, if you will, of self-motivated environmental 
stewards?
    Fourth, how can they better take into account local 
knowledge, what Congressman Kucinich referred to in terms of 
the knowledge of time, place, and circumstance, the devilish 
details of each location and each State?
    In this context of questions, a new environmentalism is 
emerging and States are at the forefront of this discovery 
process. There are four features to this new environmentalism.
    First is a move by the States toward greater flexibility in 
how they work with their regulated entities to achieve goals.
    Second is a focus on performance rather than process as the 
primary point of emphasis.
    Third is an enhanced role for incentives rather than 
punishment as the strategy of choice.
    Fourth is a move toward place-based decisionmaking where 
the devilish details of local circumstances are evident.
    I am going to give you just a brief thumbnail sketch of 
these innovations and defer to the State innovators to describe 
them in more detail.
    First, on enhanced flexibility, I want to underscore that 
this is not about rollback, as Congressman Ryan noted. It is in 
fact quite the opposite. It is about extending the 
environmental performance envelope both upward and outward.
    I just want to give you one example. New Jersey embarked on 
a facility-wide permitting program replacing 80 permits on a 
source-by-source basis at one plant with a single facility-wide 
permit.
    This enabled a system-wide evaluation of that plant and 
through that the firm was able to reduce 8.5 million pounds of 
emissions in a very short time.
    The second type of innovation is the move toward developing 
very robust performance indicators. Examples, of course, occur 
in Florida. You have a representative from Florida here, and 
Oregon. I presume you will hear more about those efforts.
    But these emphases on performance indicators have two key 
attributes that are worth noting. First is linking those 
indicators to priority setting and second is a broadening 
beyond enforcement bean counting to an emphasis on actual 
environmental performance.
    The third type of innovation is in the realm of incentives. 
One example would be the Texas Clean Industries 2000 Program. 
In this program over 200 firms commit to a 50 percent reduction 
in toxic chemical emissions in a 2-year timeframe.
    Other examples would be Illinois's Clean Break Amnesty 
Program in which the State offers compliance assistance to 
small emitters of pollution to help them clean up rather than 
taking a more permitting and fine-oriented approach.
    Finally, there is a move toward place-based decisionmaking, 
particularly in the realm of watershed management. Watersheds 
involve often cross-boundary problems and challenges.
    Two examples I would mention are both Minnesota and Idaho, 
which have pioneered effluent trading programs, in particular, 
between point sources, the old-fashioned focus on emissions 
that has been the center of attention, and nonpoint or farm 
run-off problems, with some substantial benefits.
    Let me turn now to challenges and opportunities. I think 
there are three categories of challenges that these State 
endeavors face.
    First is the set of challenges posed by fitting new 
programs within the old regulatory context. Perhaps in the 
question and answer period we can discuss in more detail what 
the fitting together involves.
    The second set of challenges is technical, that is, 
developing performance indicators is, for example, not easy. 
How does one measure? How does one decide which indicators? 
Again, we can go into more detail later.
    The third set is which stakeholders are at the decision 
table and how does one incorporate them, particularly as one 
moves to place-based decisionmaking.
    The final question, and I think of most interest to the 
Congressman today, is whether Congress can be a facilitator of 
this new environmentalism. What changes, if any, are needed to 
encourage innovation and improve environmental performance?
    It seems to me that while we have an efflorescence of State 
innovations, these are taking place in many respects in the 
interstices between the current regulations and to some extent 
at the margins.
    To foster these initiatives, therefore, I think that we do 
need what Deborah Knopman of the Progressive Policy Institute 
called ``transitional legal space.'' This is not the place for 
outlining those details, but I want to make two points.
    First, one needs a delicate balance between asserting 
congressional commitment to flexibility and these innovative 
approaches, but resisting prescription and micro-management of 
that process, a recognition of what Congressman Kucinich noted 
about the different needs and different circumstances of each 
State.
    Second, the expression of commitment may not be enough. One 
may need more resources, more Federal resources devoted to 
monitoring and also to helping States invest in developing 
their indicators.
    Finally, congressional action must recognize, as 
Congressman Sanders pointed out, that on the one hand there is 
a State leadership in new environmentalism, but on the other 
hand, one does need backstop enforcement mechanisms, cross-
boundary facilitating role for Congress and for the EPA, 
continued monitoring and an information clearinghouse.
    I think with that I will close and say that the new 
environmentalism is a discovery process and that is what these 
State efforts are largely about.
    Thank you.
    [The prepared statement of Ms. Scarlett follows:]

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    Mr. Ryan. Thank you. That is a lot for 5 minutes.
    Ms. Scarlett. I have been told I would be good on the Fed-
Ex commercial.
    Mr. Ryan. Yes, absolutely. That was very comprehensive. I 
appreciate that.
    Just so everybody knows, all of the contents of your 
opening statements will be included in the record should you 
decide to summarize your remarks.
    Mr. Seif.
    Mr. Seif. Thank you. Pennsylvania appreciates this chance 
to be here this afternoon. We especially agree with your thesis 
of the laboratories of democracy on behalf of Governor Tom 
Ridge and ECOS, the Environmental Council of the States, which 
a number of us are proud to be members of.
    We are very happy that the Beltway has taken notice of what 
some of us guys are doing out there.
    My written testimony, as you have intimated, is far too 
long and I am not even going to try to summarize it. It does 
showcase three of the innovations that are particular sources 
of pride to us in Pennsylvania.
    As to each, I would like to make a couple of points. First, 
the Land Recycling Program. Land recycling occurred, unlike 
most Federal statutes, without any delegation at all. Superfund 
is one of those statutes that doesn't provide for the standard 
Federal package of deferring to the States after certain hoops 
have been jumped through.
    That may account for its innovativeness. It was not subject 
to a long, EPA recipe of, ``here is what you have to do, here 
is the kind of statutes, here are the regs, here are how many 
FTEs you have to devote to it,'' and so on.
    I don't necessarily recommend that delegation be altered; I 
think it is a great idea, a very important innovation in 
American jurisprudence, but it sure needs to be loosened up, 
especially at this time when 71 percent, by EPA's measure, of 
programs have been delegated.
    We need some of what Lynn Scarlett has mentioned, that 
maneuvering room in between the statutes where we can do more 
innovation, but still with Federal guidance, which I think, is 
overall very important.
    Congressman Sanders has pointed out, someone has to be in 
charge and someone has to watch over all the 50 States. The 
question about delegation is, should there be some protection 
of the brownfields programs?
    I do commend to the committee's attention work being done 
by other committees and in the Senate on the subject of 
protecting the brownfields programs from perhaps some action by 
this Federal Government, by the Superfund, that would do harm 
to them.
    At different times different statutes need different levels 
of delegation. The Clean Water Act needed a lot at the 
beginning and needs less now. The Clean Air Act may need more 
now simply because of the nature of pollution.
    There is not a single sort of role for where delegation 
should be. EPA needs to have that kind of maneuvering room.
    Growing Greener is a $645 million expenditure in 
Pennsylvania for what we have dubbed ``green infrastructure.'' 
Infrastructure is usually thought of, in the green area, the 
environmental area, as bricks and mortar and pipes and pumps 
and so on.
    In Pennsylvania we have discovered that most people still 
think that we can argue about parts per million of this or that 
pollutant as the environment, as the trees and streams and the 
clean air.
    Green infrastructure is simply tending to that broad aspect 
of the environment beyond pipes and pumps. It is undeveloped 
flood plain. It is a farm that is still a farm or other kind of 
open space. It is a stream that has the right kind of buffer.
    It is a network of land strung together to encourage and 
enhance biodiversity. It is a watershed that has a community 
organized behind it or a broad arrangement such as has been 
pioneered in the Everglades recently.
    It is a watershed that has a real TMDL, a sensible common 
sense community measurement of what are we trying to do here 
and how can we, point source and nonpoint source, get it done.
    Green infrastructure is also an environmental leadership 
style--the kind of people who will reach for hip boots and a 
shovel instead of a microphone when they see a problem and 
won't run off to the State capital or the national capital to 
complain and demand new Federal laws.
    The 21st century economy requires green infrastructure of 
the sort that I am talking about. No community can live long on 
smokestacks or dot-coms. You need to have a quality of life, 
and that is green infrastructure.
    In Pennsylvania we are glad we were able to fund this 
amount of green infrastructure without going into any debt. It 
is considered an investment and not something that our 
grandchildren need to pay for.
    Finally, I would like to talk about measuring the right 
things. If I ever get a chance to brag to my grandchildren 
about what I did when I was on the public payroll, it will be 
the attempt not to build green infrastructure and revitalize 
this or that acreage and industrial land, but rather to change 
the way we count things, to change the very nature of the 
public debate about the environment.
    When I started out in the 1970's, any target you shot at 
you could hit, and say you got a polluter and throw somebody in 
jail.
    In the environmental area we have tarried too long in 
counting enforcement as a surrogate for public administration 
progress against a known enemy which is pollution.
    It is not how tough we are but how effective we are. That 
means we can use and should use other tools, not instead of but 
in addition to the traditional shoot 'em up cops and robbers 
stuff that makes for good press.
    The fact is that I would be happy to make available to the 
committee the program that we have undertaken in Pennsylvania 
to measure who is in compliance and who is not. It is not ``Did 
we zing them last night?'' But did they do what they were 
supposed to under the laws of the land, both State and Federal.
    We can tell you that now. The fact is that when we can tell 
you that, it changes the public debate about what should the 
department be doing.
    We are tired of being just a police force. We want to be a 
police force and an ag extension agent as well as to the 
broader problems of pollution.
    I would like to conclude with some observations and state 
an agreement with Congressman Sanders. Vermont is a little bit 
like western Pennsylvania, the victim of pollutants elsewhere.
    We could stop every car in Pittsburgh and still be in 
trouble when we wake up in the morning at that end of our 
State. The fact is air pollution is different from water 
pollution and it is different from pollution underneath the 
land as a result of hazardous waste and so on.
    We do need a strong Federal Government. We do need careful, 
thoughtful administration of the Federal system, not bureaucrat 
bashing, which I am always guilty of myself, including EPA 
bureaucrats.
    But give them some maneuvering room in the State and at EPA 
to do sensible things and they can be different at different 
times and with different pollutants.
    Thank you.
    [The prepared statement of Mr. Seif follows:]

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    Mr. Ryan. Thank you, Mr. Seif.
    We will next turn to Langdon Marsh, the director of the 
Oregon Department of Environmental Quality.
    Mr. Marsh.
    Mr. Marsh. Chairman Ryan, Congressman Sanders, my name is 
Langdon Marsh. I am the director of the Oregon Department of 
Environmental Quality. I am very glad to be here to talk about 
some of our environmental policy innovations in Oregon.
    We have a long history of innovative environmental programs 
in our State, some of the first air pollution control laws in 
the 1950's, the first bottle law, local land use planning laws 
and a number of other programs designed to protect the 
environment and quality of life consistent with economic 
growth.
    Over the past 5 years we have made a number of strides in 
improving how environmental programs are carried out, 
streamlined the permitting process, worked with neighborhoods 
on cleaning up pollution and gotten many regulated facilities 
into programs that produce effective results.
    I would like to talk about one of those programs which we 
believe is a real first and is being duplicated in other States 
and within EPA. It is called green permits. This program 
encourages companies to go beyond compliance with environmental 
standards and actively improve their environmental performance.
    It has a tiered approach offering different kinds of green 
permits in which increasing levels of performance receive 
increasing benefits.
    This legislation authorizes our agency to modify regulatory 
requirements for facilities that qualify, making it possible 
for us to do things like consolidated reporting, modified 
monitoring and alternative controls that allow for flexibility.
    The payoff is that facilities must qualify by demonstrating 
that they exceed the minimum requirements for compliance, that 
they implement environmental management systems that truly 
incorporate environmental concerns into day-to-day business 
decisionmaking and that they also communicate widely and openly 
with the public about their environmental performance.
    We have currently five companies that have applied for 
green permits. We are working with each of them. Each has 
demonstrated a commitment to the environment and a willingness 
to discuss its performance with the community.
    Each has made significant gains in environmental 
improvements like reducing chemical use and wastes, eliminating 
wastes sent to a landfill and reducing air emissions to less 
than 10 percent of the levels allowed in the permit.
    They are also working on new projects that don't 
necessarily relate just to the things that we as an 
environmental agency regulate, like a reduction of water use 
which benefits the larger community.
    The regulatory efficiencies that these companies will 
benefit from include consolidated reporting, flexibility in 
their permits and enforcement discretion to recognize that a 
company that has made the commitment, stepped up to the plate, 
is making improvements and is accounting for it publicly does 
not need the same kind of scrutiny as other companies.
    We have also worked closely with EPA in developing its own 
national performance track program, which is a very similar 
program that was announced earlier this summer. It recognizes 
the leadership of many in the private sector.
    The ideas that are incorporated in that program have been 
tested in Oregon. I think it offers some benefits for those 
States that have a program like ours so that facilities can 
participate in both and get benefits from both.
    I would like to mention a couple of other things that we 
are doing with innovation in dealing with the business 
community. Small businesses, we recognize, are a source of a 
significant amount of pollution that has not been traditionally 
regulated under the Clean Air and Clean Water Acts and the 
hazardous waste laws.
    So, we have developed as one way of dealing with this a 
partnership program with the automotive services industry in 
the Portland area to certify auto shops that exceed regulatory 
goals. We give them assistance and help publicize their 
certification as green businesses, which are designed to help 
them in the marketplace.
    We have also participated in the Natural Step Network. 
Natural Step is an international organization and movement to 
promote sustainable business practices among companies that 
sign up for it.
    We are very pleased to be participating with companies like 
Nike on the one hand and a small house parts company on the 
other, working in partnership with them to lower their 
environmental footprint and to share their success stories with 
other businesses in the State.
    Our Governor Kitzhaber has recently issued an executive 
order on sustainability, the first of perhaps several that will 
put the State on the path toward encouraging sustainable 
actions by businesses, industry and the public. We have been 
working very closely with the Governor on that.
    So, in conclusion, we are working in partnership with many 
proactive, progressive companies to protect the environment, 
trying to solve problems, not just run programs. But as others 
have said, we can't disregard the more traditional 
environmental programs. Permits, inspections, and enforcement 
actions have to be continued to ensure that we continue to 
protect the environment.
    Thank you very much.
    [The prepared statement of Mr. Marsh follows:]

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    Mr. Ryan. Thank you, Mr. Marsh.
    Next we have Karen Studders, the commissioner of the 
Minnesota Pollution Control Agency.
    Ms. Studders. Mr. Chairman and members of the subcommittee, 
I want to thank you for the opportunity to be here before you 
today to share what we are doing in the State of Minnesota.
    The three areas that I would like to discuss with you today 
will focus on ``the second wave of environmental protection'' 
in the United States; the reorganization of our State agency to 
meet new environmental challenges; and water pollutant trading 
in the Minnesota River Basin.
    I have spent my entire professional career working in the 
environmental arena. I began as a bench chemist with the 
Environmental Protection Agency and then I spent 17 years 
directing the environmental regulatory programs for a large 
energy provider.
    Over the last 18 months I have been serving under Governor 
Ventura as Commissioner of the Minnesota Pollution Control 
Agency.
    I would tell you that I am very excited that you asked for 
this hearing today on this subject. I think it is a very 
important matter that needs attention and we need to work 
together on this.
    What I would like to do is talk a little bit about this 
``second wave of environmental protection'' in the United 
States. The first wave of protection began in the early 1970's 
and it focused on regulating large, industrial polluters.
    It was very successful in using command and control to 
address what we call point source pollution, out of the stack 
and also out of the pipe.
    However, to solve the environmental problems we have today, 
we need to transition to the ``second wave of environmental 
protection.'' We need new tools in this second wave to address 
nonpoint sources of pollution.
    For example, in Minnesota it is estimated that more than 50 
percent of our air pollution comes from mobile sources, that is 
cars, trucks, and airplanes. And 90 percent of our lakes, 
rivers and streams are affected by nonpoint sources of 
pollution such as urban runoff, agricultural activities, and 
failing septic systems.
    If we are to be truly innovative and effective, States need 
flexibility. That is only available through Federal 
authorization.
    Let me tell you that in 1996 Minnesota passed legislation 
to authorize environmental regulatory innovation experiments. 
We did this so that Minnesota could take advantage of Federal 
innovation programs such as project XL and the common sense 
initiative. However, the Federal programs did not deliver the 
promised flexibility we needed. As a result, Minnesota has been 
unable to use its State innovations statute.
    To address the new environmental challenges, this agency 
underwent a major reorganization about 2 years ago. We are no 
longer structured based on air, water and land, what we once 
called ``silos.''
    We redesigned the agency's service delivery system to match 
three distinctly different geographic areas of our State.
    This overhead that we are putting up shows the North 
district where we have most of our recreational lakes, 
including Lake Superior, as well as mining activities.
    The South district, which is mostly agricultural crop land, 
and the Metro district where one half of the population of the 
State resides in the Twin Cities.
    We also decentralized operations because different 
environmental priorities exist in different parts of our State. 
We now have six offices in greater Minnesota with 110 employees 
delivering services in each of their respective regions.
    We also created two additional divisions within our agency. 
One is devoted to policy and planning and the other 
environmental outcomes.
    It is the job of the environmental outcomes division to 
monitor the environment, to analyze the environmental data we 
get and to evaluate the effectiveness of our programs.
    For years we have tracked progress by the number of permits 
we have issued, the enforcement actions we have taken and the 
inspections we have made.
    That is what EPA requires us to do. We have made the 
assumption that these activities result in positive 
environmental outcomes. But we need a better handle today on 
the very diffuse activities that are degrading our environment, 
the nonpoint sources.
    The reorganization we went through is about performance and 
measurable results. In order to achieve those results, we have 
tied individual work plans to our agency's 5-year strategic 
plan, which is actually linked to our 2-year contract with the 
Environmental Protection Agency, our Environmental Performance 
Partnership Agreement that we have with EPA.
    I would like to share another environmental innovation from 
the State of Minnesota. Because the Minnesota River is so 
seriously polluted, the Minnesota Pollution Control Agency 
actually strictly limits any new wastewater discharges that can 
occur in that river basin.
    If you look at the overhead that is up there, there is a 
picture of both the Minnesota and Mississippi Rivers as they 
come together. You can see the distinct discoloration of the 
Minnesota River, which is shown on the upper top half of the 
screen.
    In 1988, EPA and our agency established a total maximum 
daily load for that river because it was so polluted. This cap 
placed tight restrictions on all existing wastewater treatment 
plants that discharge into that river. It left little room for 
expanded discharges.
    So, how do we allow industrial expansion in this part of 
our State while at the same time protecting our water quality?
    Since 1997, we have used a technique called ``pollution 
trading.'' In this case we are talking about water pollution, 
specifically phosphorus and nitrogen.
    Our first experience in pollutant trading was a partnership 
with Rahr Malting. As the name implies, Rahr is a malting 
company and the product is used in brewing. The pollutant 
trading that they went through entailed not just point source, 
but also nonpoint source pollution.
    Let me tell you how it works. Rahr trades its increased 
point source discharges of pollutants for a decrease in 
nonpoint source pollution coming from agricultural land that we 
don't currently regulate under our regulations.
    To achieve this, Rahr established a trust fund of a quarter 
of a million dollars, supervised by an independent board of 
directors. Farmers and other landowners, including 
municipalities, apply to the fund for projects aimed at 
reducing nonpoint pollution in the river basin.
    Rahr's offset provisions prevent 14,700 pounds of nitrogen 
and 7,370 pounds of phosphorus from going into that river 
annually.
    In conclusion, I would like to tell you that to be 
effective in this ``second wave of environmental protection'' 
we need to do more than just build partnerships with industry.
    We also need to work with individuals on behavior change. 
We must create environmental literacy within our citizens and 
we must start instilling a sense of environmental awareness in 
our young people.
    I am optimistic that the citizens will respond to our 
invitation to become environmental stewards.
    The State recently published the Minnesota Environment 2000 
Report, which I have provided to you. It is a snapshot of the 
environmental past, present and future over the last 30 years.
    I would like to tell you that there is a growing 
understanding by the States of the need to move into this 
``second wave of environmental protection.''
    In this second wave, both point and nonpoint source 
pollution programs are addressed using a myriad of tools, 
education, assistance, voluntary and incentive-based programs 
as well as command and control regulatory programs.
    EPA has an important role to play at the Federal level and 
an important role in supporting our State innovations during 
this second wave.
    To make such innovations possible, however, Congress must 
provide authorization necessary in order for regulatory 
innovation experiments to occur.
    Thank you very much. I look forward to answering questions 
later.
    [Note.--The publication entitled, ``Minnesota Environment 
2000,'' may be found in subcommittee files.]
    [The prepared statement of Ms. Studders follows:]

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    Mr. Ryan. Thank you very much, Ms. Studders.
    Our next witness is Lisa Polak Edgar, the deputy director 
of the Florida Department of Environmental Protection.
    Ms. Edgar.
    Ms. Edgar. Thank you, Mr. Chairman, members of the 
committee. Thank you for inviting Florida to participate on 
this panel today.
    My name is Lisa Polak Edgar and I am deputy secretary for 
planning and management for the Florida Department of 
Environmental Protection. I am here representing the Florida 
DEP and Secretary David Struhs.
    I would like to talk to you today about two innovative 
projects that we have been working on in Florida and also 
briefly discuss our performance measurement system.
    You may or may not be familiar with d-limonene. D-limonene 
is a VOC, a volatile organic compound that is released into the 
air during the citrus processing process. It is a gas that 
comes from the oil that you get when you squeeze citrus for 
juice.
    D-limonene is volatile. It reacts with nitrogen in sunlight 
to form ozone and as such is regulated under the Clean Air Act. 
However, unlike many other VOCs, it is not toxic. In fact, it 
is being used increasingly as a substitute for toxic solvents 
and some industry pollution prevention programs.
    D-limonene emissions in Florida generally occur in the 
winter as the citrus is processed after the growing season in 
the summer. Of course, ozone formation is not as serious a 
problem in the winter.
    For these reasons, Florida had never developed a serious 
regulatory plan for this VOC emission for the 26 citrus 
processing plants in Florida. This left the industry vulnerable 
under the Clean Air Act and left our State regulatory program 
incomplete.
    As the industry is currently going through some 
consolidation and plant modernization, our air program 
discovered that the VOC emissions from these plants were higher 
than had been estimated.
    The time was right to rationalize our regulatory strategy. 
We began discussions with the industry association and key 
State legislators resulting in a bill that created a new State-
wide standard that will cut VOC emissions in half from the 
average citrus plant.
    The law also provides the ability for plants that exceed 
the standard to sell credits to other citrus processing plants.
    We were successful at the State level because we used the 
collaborative approach up front, working with the industry and 
State legislators, because of new technology that allows plants 
to reduce the d-limonene emissions, and because the emission 
production credit possibility allows more efficient deployment 
of new capital investments by the industry for emission 
control.
    I would like to take a moment and share two quotes with you 
about this program. One is from one of the legislators who 
worked on it. ``It is win-win. Companies have a financial 
incentive to be cleaner and those that can't afford to upgrade 
equipment have a way to stay in business.''
    From the industry, executive vice president of the 
Processors Association, ``We are going to have less paperwork, 
but a higher standard of performance. We are also going to have 
more flexibility to meet that standard and that was our 
preference.``
    This initiative requires EPA approval of an amendment to 
Florida's SIP, the State Implementation Plan. We will be 
submitting this to EPA later this year.
    I would also like to talk to you briefly about our 
performance measurement system. The concept of better measuring 
and reporting our environmental performance is a central 
challenge to all environmental managers.
    This is not about reducing standards; it is about better 
understanding the impacts and outcomes of our environmental 
protection programs.
    Performance indicators inform important decisions, thereby 
increasing our ability to protect the environment. Likewise, 
free and open assessments of performance foster and promote 
innovation by pointing out where it is most urgently needed.
    At the Florida DEP we have had a performance measurement 
system in place for about 3 years with information published in 
a Secretary's quarterly performance report.
    For performance measurement to add value requires thorough 
data analysis, trend identification, and a commitment to 
productive action to address both longstanding and emerging 
trends that are troubling.
    Tools that we use in this process include focus and watch 
designations and environmental problem solving. One project 
that used these tools we called ``Team SOS.'' Data showed that 
sewage overflows in Orange County, the Orlando area, were 
totalling over 1 million gallons a year. That is hundreds of 
thousands of gallons of raw sewage flowing into rivers, lakes, 
and even homes.
    A team was formed to work with Orange County utilities. The 
point was to find ways to fix the problem, not to just report 
it. In this instance, the data already existed. Sewage 
overflows and spills are required to be reported and have been 
for years.
    The difference now was that the data was analyzed and a 
trend of sewage overflows and spills in certain areas and under 
certain conditions was identified. Working with the Orange 
County utilities, over 20 no-cost or low-cost actions and 
innovations were identified that would help reduce the problem.
    The annual amount of gallons spilled was reduced by over 60 
percent.
    As I mentioned earlier, our performance measurement system 
has been in place about 3 years. We are now in the process of 
evaluating our measures, our data collection systems, and our 
data quality. It is a performance measurement of our 
performance measurement system, if you will.
    Secretary Struhs is committed to the continuous improvement 
of the ability for all of us to make informed decisions about 
our environmental quality and this includes improving the 
functionality of our performance measurement system.
    The mission statement of the Florida Department of 
Environmental Protection is ``more protection, less process.''
    Performance indicators should promote informed 
decisionmaking at all levels and help us evaluate our 
activities. It should also help us determine whether some 
activities are serving process more than protection and aid us 
in shifting resources and efforts that serve only process 
toward the higher purposes of protection.
    I would like to end by sharing a quote attributed to 
General George Patton. ``Don't tell people how to do things. 
Tell them what to do and let them surprise you with the 
results.''
    Thank you.
    [The prepared statement of Ms. Edgar follows:]

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    Mr. Ryan. Thank you, Ms. Edgar.
    Now, we will hear from Erik Olson, the senior attorney, at 
the NRDC.
    Mr. Olson.
    Mr. Olson. Thank you. Thank you for having me this 
afternoon.
    I wanted to talk a little bit about some of the debate that 
has been going on about this very issue for some time. 
Obviously, this is not a new issue. I also want to talk about 
some of the innovations that we have embraced that States have 
adopted. Finally, I wanted to note some of the basic criteria 
that we think need to be met so that we can ensure continued, 
``cooperative federalism,'' as it has often been called by 
academic commentators.
    As we all know, since EPA was created 30 years ago, there 
has been enormous improvement in environmental protection and 
in public health standards and in results. Much, if not most, 
of that has been the result of vigorous work at the State level 
because EPA simply doesn't have the resources or the knowledge 
or the ability to put into effect most of the Federal 
regulations without State cooperation and help.
    Many State innovations have occurred that you have heard 
about, and some of them have been very impressive. They often 
occurred because there was a Federal requirement that there be 
air quality improvements or that there be some other 
improvement.
    The States were creative and thought of new ways to achieve 
those goals. There are many other examples that are cited in 
our testimony such as improved right to know requirements that 
have been adopted in California and New York that ended up 
being part of the Federal law.
    Another example is in Wisconsin and in Iowa and in New 
Jersey. There are strong groundwater protection programs that 
still haven't made it into Federal law that were a result of 
innovative State programs.
    Similarly, in California the citizens adopted a 
proposition, Proposition 65, that imposed right-to-know 
requirements for polluters that were creating toxic emissions 
or toxic exposures to consumers. This law which resulted in 
huge reductions in toxic exposures to citizens simply because 
there were right-to-know requirements that flowed if there were 
exposures that had not been otherwise known about.
    So, I think that there are many lessons that we can learn 
from innovations at the State level and many success stories 
that could be told, certainly more than can be told in a 2-hour 
hearing.
    There are a couple of very important principles that need 
to be taken into account in developing cooperative federalism 
at the Federal level.
    First of all, we need to recognize that there is huge 
variation among the States. You have on the panel today 
represented some of the leaders in State innovation and in 
going beyond what minimum Federal requirements there are.
    Unfortunately, there are many followers and there are even 
some that oppose Federal standards or even oppose going forward 
with many of the basic environmental protections and health 
protections that are necessary. We need to keep that in mind.
    Second, obviously, there are many reasons that States have 
a very important role to play. First of all, as has been 
mentioned, they have greater local knowledge of environmental 
conditions locally, very often. They have more resources and 
expertise and political support locally than the Federal 
Government does often.
    They also have more local political knowledge, which can be 
extremely important. As has been mentioned, they are the 
laboratories of democracy and often can be very innovative.
    However, there are certainly some countervailing principles 
that have always been important to consider.
    For example, it has been mentioned that some States can be 
susceptible to brown mail, where a large, powerful company 
tells a State that if the State cracks down on it, it threatens 
that it will see fit to move out of the State, move its 
operations elsewhere.
    Second, there is a concern about inaction by some States on 
very basic public health problems. Mr. Kucinich mentioned the 
cryptosporidium issue where there have been disease outbreaks, 
yet many States, in fact, virtually all States, if not all 
States, failed to adopt any standards for cryptosporidium until 
they were federally required.
    There are underground storage tanks and other examples 
where States did not act until they were federally required to 
do that, for many reasons. Very often it was for lack of 
resources and other reasons.
    Third, the level playing field is very important to many 
States. There can be a race to the bottom, certainly not by all 
States, but some States trying to attract business or trying to 
avoid political problems will go ahead and adopt less stringent 
standards. Probably one of the better-demonstrated examples of 
that is where 19 States have adopted laws that prohibit the 
State from going beyond the Federal minimum requirements.
    So, there are many reasons that we need to make sure that 
there is a so-called Federal gorilla in the closet. Someone 
there at the Federal level that can help State officials who 
are trying to do their job by giving them someone to point to--
Federal presence--to make sure that they can do their job well.
    Many recent examples of polluter lobby groups trying to cut 
State regulatory agency funding simply because they are trying 
to reduce the State's ability to take regulatory enforcement 
action are additional examples of the need for a Federal 
presence.
    So, we do believe that States have an important role, that 
they should and must be innovators and that the Federal 
Government has an important role in encouraging that. The 
Federal Government needs to set national standards and set 
health goals, and in addition, some minimum safeguards for 
citizen participation.
    But States should be free to go beyond that and certainly 
should not be preempted from going beyond that.
    Thank you.
    [The prepared statement of Mr. Olson follows:]

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    Mr. Ryan. Thank you, Mr. Olson.
    Last, but not least, we have Mr. Recchia, the deputy 
commissioner of the Vermont Department of Environmental 
Conservation.
    Mr. Recchia.
    Mr. Recchia. Thank you, Chairman Ryan. Thank you very much 
for the opportunity to be here, Representative Kucinich and 
Representative Sanders. I appreciate the invitation and I am 
very pleased to be here.
    As Commissioner Studders has pointed out, I am a cleanup 
hitter, so I get to say all the things that I don't think have 
been said yet. But, to be honest with you, I think most of the 
things have been said.
    I think knowing my colleagues here and working with them on 
ECOS and on the Ozone Transport Commission and a variety of 
other groups that are trying to address State's interests and 
how we manage our environmental programs, I would say that we 
have much more agreement than we do disagreement.
    That said, I think a couple of points really do need to be 
made from Vermont's standpoint and I wanted to give you that 
perspective.
    In addition to being the deputy commissioner of Vermont's 
Department of Environmental Conservation, however, I am here 
representing also NESCAUM, which is the Northeast States for 
Coordinated Air Use Management. It sounds a lot better in 
acronym form than it does when you say the words.
    That is New England, New York, New Jersey, basically trying 
to coordinate their air use management programs to achieve the 
best level of performance we can. We have been successful in 
moving forward on joint air issues through this organization.
    Really, as we cross into the 21st century, I want to 
emphasize that we should be and we are celebrating, really, 
three decades of environmental awareness that has been founded 
in the recognition that there is an important Federal 
regulatory role to be played in protecting our health and the 
environment.
    This has not always been an easy relationship. It is surely 
an understatement to say that the State and Federal 
relationship is certainly a complex one.
    I guess in this discussion I would urge us to remember that 
innovative and flexible is not necessarily the antithesis of 
command and control.
    They are not mutually exclusive. They can both work hand in 
hand and indeed, I think, although we have all struggled a 
little bit in trying to make it so, I think it has been working 
in that direction.
    So, I would ask us to remember that as we enter this debate 
and focus on how to best improve the next decade of 
environmental management that we recognize that even in 
hindsight very few in government or in industry would make the 
claim that the past 30 years of success in environmental 
management would have happened in the absence of these Federal 
laws and standards. They indeed have made a difference and I 
think it is important to acknowledge that.
    So, the debate really becomes improving our environmental 
regulatory system in the form of a pursuit to refine the role 
of the Federal Government and not replace Federal enforceable 
standards.
    With those introductory remarks, let me quickly turn to 
some areas where we in Vermont have been doing innovative 
programs and have had some successes working both with NESCAUM 
and independently, and then briefly describe to you where I 
believe the right emphasis should be on the Federal role and 
the State role in managing environmental resources.
    I will not go through in detail the examples that I have 
provided in written testimony. You will find them in a revised 
version in appendix A and B of the testimony that I am 
providing.
    Let me briefly tell you about one or two in air areas and 
then I would like to focus on some water and mercury issues 
that Representative Sanders alluded to.
    First of all, in terms of air issues, this is an example. 
The diesel regulation or control of large diesel engines has 
been a problem in the sense that we have been preempted by EPA, 
unintentionally, through the process of regulation and have 
required some creative work to figure out how to overcome that.
    Working cooperatively with a variety of engine 
manufacturers, EPA, and the State regulators, we were able to 
get, throughout the New England/New York region, various 
innovative efforts in place to voluntarily upgrade those diesel 
engines, well in advance of EPA. You will find details of that 
in the back of my testimony.
    In addition, we, too, have been working on what we call P4 
pollution prevention in the permit process. I think Langdon 
Marsh recognized that and presented some of those examples in 
the context of the Oregon green permits program.
    Really, for Vermont I want to focus on two areas which I 
think exemplifies where the Federal role can help and where it 
can hurt.
    One is in protection of our watersheds and that was 
mentioned earlier as an option of where States can work. 
Certainly, even more so with air issues, the Federal Government 
can allow and support flexibility in the management of our 
State waters.
    We have developed a watershed improvement project that 
builds on local citizenry taking charge and taking 
responsibility for their water resources and supporting those 
uses, not only for themselves, but to take stewardship of them 
for the rest of the members of the State and the community.
    That is working very well. I piloted a program this year 
that is actually getting in the ground restoration work of 
rivers that have been damaged and degraded for the better part 
of 50 years.
    Now, a mechanism exists already to be able to get the 
support of EPA necessary to support these types of programs. It 
was mentioned earlier that it is through our Performance 
Partnership Agreements. That is a mechanism by which the EPA 
can provide and should provide State flexibility for this type 
of work.
    The final example shows where Federal programs are still 
necessary and warranted. We have been working in New England 
very, very hard to address mercury pollution and proper 
management of mercury-containing wastes to protect public 
health and our water resources.
    Despite limited direct pollution sources, all of Vermont's 
waters are under fish advisories for consumption of certain 
fish species because of mercury contamination that comes from 
elsewhere.
    Now, we will do our part and we are willing to do our part 
and to step up to the plate and do that. We have worked very 
hard both with the other New England States and the Eastern 
Canadian Provinces to achieve a regional goal of virtual 
elimination of emissions of mercury.
    Nonetheless, all that work will be for naught if other 
States and areas do not step up to the plate as well.
    Now, our program is serving as a model, not only on the 
national level, but internationally we keep on hearing of 
people who cite our program, which is a little bit scary, but 
somewhat rewarding.
    I would just say that what that points out is that I think 
there are opportunities for States to design and implement 
innovative, cost-effective, and geographically relevant control 
strategies, but we can't do it all.
    In short, I believe there are four main areas where the 
Federal Government still has an appropriate role and should 
continue to work. Three of these are what I will call 
substantive and one of them is financial.
    The three substantive ones are: First, we must have the 
Federal Government setting minimum national standards of 
environmental performance. This does not mean providing a 
number of enforcement actions we ought to take. It is a true 
level of environmental performance we ought to be achieving.
    Two, provide research and technical support to support 
technology development.
    Three, we need their assistance and active participation in 
resolving interstate transport conflicts. As much as I enjoy 
working with all my colleagues from across the 50 States, it is 
difficult when we get 22 of us in a room to try and negotiate 
out how we are going to change the pattern of air polluting 
flow from West to East.
    Last, I would say the financial point again reiterates the 
need to work through the Performance Partnership Agreements to 
provide adequate funding to the States for the work you wish us 
to accomplish and let us be flexible in making those resources 
available to accomplish that work through the Performance 
Partnership mechanism.
    With that, I will stop. I thank you very much for your time 
and I look forward to answering any questions.
    [The prepared statement of Mr. Recchia follows:]

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    Mr. Ryan. Thank you, Mr. Recchia.
    That is the 10-minute bell, so I think what we will do is 
briefly recess. The three of us will go vote and then come back 
as fast as we can and then we will resume questioning.
    So, the hearing will be recessed for 10 minutes.
    [Recess.]
    Mr. Ryan. The hearing will come back to order.
    I am very fascinated with the whole race to the top versus 
race to the bottom issue. I would like to explore that.
    But before I do so, I would like to ask some of the State 
officials about your particular problems in implementing your 
reforms and your programs vis-a-vis Federal regulations.
    Ms. Studders, you talked about your Project XL and you 
talked about a law you have which is basically lying dormant 
because of the inflexibility of a supposedly flexible program.
    Could you elaborate on specifically what Federal laws and 
regs have given you problems in exercising the discretion you 
need to benefit from Project XL? Is that a clear question?
    Ms. Studders. Yes, it is a clear question. I don't think I 
have the specific reg. I can tell you the language that is 
causing us trouble.
    Mr. Ryan. Sure. See if you can just give me the nature of 
it.
    Ms. Studders. I apologize.
    Mr. Ryan. That's OK. Explain the nature of the 
inflexibility.
    Ms. Studders. OK. I don't know the statute. There is 
terminology, and I am going to use quotes around this, called 
``superior environmental performance'' that is in the Federal 
law.
    When the initial explanation was in the Federal Register, 
we felt we had some creativity that we could work with based on 
the preamble in the Federal Register. Ultimately, when EPA 
interpreted those regulations, their interpretation was 
narrower than ours.
    Literally, it is requiring companies to provide a guarantee 
if they try to do something that there will be ``x'' percent 
reduction of pollutants.
    When you are out there on the front edge and doing 
something for the first time, it is very difficult to provide a 
guarantee.
    That is my understanding of the issue.
    Mr. Ryan. So, it is difficult to get the thing off the 
ground in the first place?
    Ms. Studders. Well, the guarantee piece. If you can't honor 
the guarantee, then EPA doesn't want you to go forward.
    I can tell you that most States will have to get similar 
legislation in place in order to participate in something like 
this. But absent some tweaking at the Federal level, it is 
where the partnership is really critical, that both the Federal 
Government and the States together work on this one.
    Mr. Ryan. OK. Thank you.
    Mr. Seif, you mentioned the Federal liability problems with 
the brownfields. Specifically you mentioned that Federal 
Superfund liabilities are discouraging companies from 
participating in your State brownfield redevelopment programs.
    What do the Pennsylvania business and community leaders 
tell you about this problem? Would eliminating or reducing the 
threat of Federal enforcement at sites cleaned up to 
Pennsylvania standards significantly expand participation in 
your program?
    What have been the roadblocks you have faced in trying to 
get these sites cleaned up?
    Mr. Seif. We are facing fewer as time goes on. I think 
earlier on when our program was new--it was signed into law in 
the summer of 1995--there was a great deal of concern that if 
you did everything we asked you to--and it was laid out clearly 
about what you should do and that was one of its advantages 
compared to Superfund--you still might look at Superfund as a 
threat.
    If you don't have a finality to a business deal, you don't 
have a business deal. You can't bank on an uncertain time 
period or on a certain amount of money. Our statute provides 
that. The feeling was that the Federal Government could come 
in, or the regional office or Washington, and say, ``It is not 
quite how we like it. Let us start over.''
    I think as time has gone on, and now upwards of 35 or 40 
States have brownfields laws and you have an EPA alert to the 
harm it can do to an essentially functioning State program, 
there is more forbearance.
    There are also more practitioners, whether they are legal 
or consultants or landowners or redevelopment authorities that 
are willing to go through the State process and have less fear 
of a potential Federal intervention.
    It is still probably a good idea, however, to see some 
statutory reform of Superfund--if we can't get the whole thing 
reformed, which would be, of course, Tom Ridge's first choice--
to at least provide some kind of safety, some kind of 
borderline between Federal and State jurisdiction in this area.
    A great deal has been debated about what that language 
would be, but I would say the need for it is somewhat 
diminished over the years, but probably still important to 
have.
    Mr. Ryan. OK.
    Mr. Recchia, I wanted to examine something you said that I 
found interesting. In your testimony you noted that while cost-
effective retrofit technologies exist that significantly 
reduced emissions under your diesel program, States are 
substantially preempted by the Clean Air Act from taking large 
steps to reduce pollution from existing diesel vehicles.
    Do you regard this as an undesirable Federal intervention 
in State environmental prerogatives?
    Also, do you believe that the better alternative system 
would be to have EPA set performance-based standards or goals 
and then allow the States to develop their own technologies, 
instead of EPA dictating which States may use technology to 
achieve these goals?
    Mr. Recchia. Thanks. I would like to answer the second one 
first if I could, which is, yeah, I would agree with that. I 
think generally if EPA can establish scientifically based 
performance standards that we will do better in terms of being 
able to come up with innovative technologies to do this.
    The difficulty there, and I don't have an easy answer for 
it, is that for EPA to justify a scientifically based standard 
there have to be technologies out there that they can point to 
demonstrate ``This is achievable and feasible right now.''
    That makes it very difficult to not point to a particular 
technology and say, you know, we think that is ``the best'' and 
most straightforward control and at the same time not be 
forcing industry to use that technology because that is what 
the standard was based on and they are usually on a timeframe 
that needs to implement it quickly.
    So, I don't know how you will address that concern. 
Generally, I think performance-based standards are a better way 
to go.
    Going back to the first question on the diesel emissions, I 
think that was an unintended consequence. I don't see that as, 
you know, EPA going out of their way to try and mess around 
with States' prerogatives.
    But I do think that between that and the engine 
manufacturers suing EPA, trying to get them to encompass a 
group of off-road diesel vehicles, which are basically all the 
construction equipment primarily responsible for a lot of the 
particulate emissions, into a rule that was meant to be dealing 
with on-road vehicles and successfully appealing that in court, 
that caused some of the tension there.
    I would call it more unintended consequence, but 
nevertheless, the Federal Government, by intent or otherwise, 
was preempting the ability to effectively move forward.
    Mr. Ryan. OK.
    Mr. Olson, I would like to ask you about that same exact 
point. What is your take on a gradual transition to a regime 
where the Federal Government establishes environmental 
performance standards based on the best peer-reviewed science, 
and then allows States to design their own implementation 
strategies and hold States accountable for the results?
    Here is what the best peer reviewed science say are the 
correct standards. You achieve the results. You employ and 
develop the technologies that work the best. What do you think 
about that approach?
    Mr. Olson. Well, I think it is actually the approach which 
is embraced in some Federal statutes. There are many examples, 
for example, parts of the Safe Drinking Water Act.
    EPA adopts standards which say, ``You do it however you 
want to do it, but you can allow no more than this level of a 
given contaminant in your drinking water.''
    There are technology-based standards under the Safe 
Drinking Water Act. They similarly say, ``You do it however you 
want to do it, but however you do it, it has to be at least as 
good as this technology.''
    So, there are some examples where that has been tried, and 
it can work. In the Clean Air Act and the Clean Water Act there 
are also examples where EPA will set a basic performance 
standard, a new source standard, for example, and allow 
innovation to happen.
    My concern would be that a wholesale transition to that 
approach without having thought through what the implications 
are. A broad re-writing all the statutes, I think, certainly 
could upset the apple cart and retroactively impair some of the 
progress we have made.
    Mr. Ryan. I want to stick to the 5-minute rule so that 
everybody else gets a chance to ask their questions. We will do 
another round.
    I will yield to Mr. Sanders.
    Mr. Sanders. Thank you very much, Mr. Chairman.
    I think this is an interesting and important hearing. I 
think there should be very little disagreement that States 
should be learning from each other and that the Federal 
Government should be learning from the States.
    The more ideas that are out there, the better it is. I 
think we need to improve our cooperation.
    Let me start off with Mr. Recchia, if I might, with one 
question. Then, others please jump in. Do you believe that we 
need to end the Grandfather Clause in the 1970 Clean Air Act 
for fossil fuel power plants and if we did, what impact would 
this have on the Northeast, including the State of Vermont?
    Mr. Recchia. I think that is a very critical area for 
Vermont. In particular, we are the only State in the region 
that is in compliance and in attainment for our ozone levels. 
But we are just barely in compliance and we are just barely 
meeting our particulate matter standards, through no fault of 
our own.
    The issue here is, you know, we talk about the race to the 
top and the race to the bottom. The bottom line is, factually, 
these plants have been around for 30-some odd years, have been 
going forward and not putting on a level of control that the 
rest of us are putting on in our own region and yet we are the 
recipients of those emissions.
    This is a perfect example where the Federal Government 
needs to establish the minimum performance level that is going 
to be necessary, the minimum limit of emissions that are going 
to be acceptable.
    Mr. Sanders. So, I am hearing you say that you think that 
we should eliminate that Grandfather Clause?
    Mr. Recchia. Yes. I am sorry. I should have just answered 
the question, right? The answer is ``Yes.''
    Mr. Sanders. Are people in agreement with Mr. Recchia or is 
there disagreement?
    Mr. Seif. I would definitely like to agree with Mr. Recchia 
and point out that Pennsylvania was the first or among the 
first States to deregulate electricity.
    So, we have the anomalous and economically unfair situation 
of having Pennsylvania power plants produce power with 
pollution under very tight controls, that is the Northeast 
Ozone Transport Region, and then facing competition from power 
plants producing them without such controls and sending the 
cheap electricity to compete with us and the even cheaper ozone 
to jack up our monitoring numbers.
    What is wrong with this picture? The level playing field 
doesn't exist.
    Mr. Sanders. Do I hear any disagreement with the need to 
end the grandfather clause or are we all in agreement on that?
    Ms. Studders. Representative Sanders, Minnesota is in 
complete agreement. We have even gone so far as to send EPA a 
letter asking EPA to take action in this area. With all the 
work that is going on with electricity, this definitely is a 
national issue that we need help with.
    Mr. Sanders. OK. Thank you.
    Let me ask another question if I might, a similar one. What 
are your feelings about the need to strengthen CAFE standards 
and put an end to the loophole for SUVs, minivans and pickup 
trucks? What is your view on that? Do you think we should 
strengthen CAFE standards?
    Mr. Marsh. I am Langdon Marsh from Oregon. The States 
played a very strong role over the last couple of years in 
encouraging EPA to go as far as possible in eliminating the 
differentiation in emission controls between SUVs and other 
light trucks and cars.
    EPA did adopt some very good regulations in 1999 to require 
for much cleaner cars starting in 2004 and also to establish 
lower sulfur in gasoline fuel standards starting in the same 
year. That was a major victory, I think, in terms of national 
standards.
    I don't have any specific background myself on the CAFE 
standards, but I think it is that type of cooperation that is 
going to be necessary on a number of fronts, including off-road 
engines, both diesel and non-diesel and on issues like 
corporate average fuel efficiency. I think that issue could be 
moved forward.
    Mr. Hackney. Congressman, may I jump in on that? In this 
respect, I am not speaking for NCSL, but as an individual 
legislator from North Carolina. I think that we need to take a 
larger view of both the questions that you have asked and move 
beyond that to ask what do we want our air to be like in 50 
years or 40 years or 30 years? How do we want our rivers to 
look like then?
    When I said in my testimony that we need to take the next 
step, what I meant was let's do some serious thinking about how 
we want the environment it to be.
    In my State we are working really hard on air quality 
problems. But even though we are moving to low-sulfur gas and 
there is hope on the horizon for air quality because of all the 
improvements that the Congress has put into effect and that we 
have done locally as well, the vehicle miles traveled are going 
up so fast that it may not make any difference in helping out 
with our air quality.
    So we need to take a long, serious look as we begin the 
21st century as to what our air is going to be like in 25 or 50 
years. We need to do some serious planning about that.
    You have mentioned two specific areas which are very 
important. We need to move ahead.
    Mr. Sanders. You mean look at transportation as a whole?
    Mr. Hackney. Yes.
    Mr. Sanders. Do I have time for one more question?
    Mr. Ryan. Go ahead.
    Mr. Sanders. This question is a little bit outside of the 
scope of what we have been discussing, but it concerns me a 
great deal. It is a very serious problem in Vermont and I 
suspect in your States as well.
    There seems to be an epidemic of asthma in this country. I 
know we have many kids from the State of Vermont who need 
inhalators and nurses have inhalators in schools.
    Is there a serious problem in your States? What is your 
judgment as to the cause of the problem and what are your 
States attempting to do to address the epidemic of asthma?
    Mr. Seif. If I knew the cause of the asthma problem, of 
course, I would be investing in whatever company I sold that 
solution to. In terms of whether there is an increase or not--
--
    Mr. Sanders. Is there a serious problem in Pennsylvania?
    Mr. Seif. Of course.
    Mr. Sanders. A growing problem?
    Mr. Seif. Especially with younger people and other kinds of 
respiratory problems with other people who are at risk or 
indeed the general public.
    The mix of indoor chemicals, the mix of unsafe buildings, 
buildings that aren't green, the kinds of activities that 
people are involved in. They are not as athletic as they used 
to be and sometimes there may be an issue there.
    We are also hearing that there may be a rise of asthma 
vulnerability because of the extensive use of antibiotics in 
our medical history in the last 30 to 40 years, that is, a 
reduction of the amount of immune capacity in systems so that 
vulnerability to asthma is heightened.
    It doesn't have anything to do with what is external in the 
air. It could be the same amount but a heightened 
vulnerability.
    But we do have to have transportation controls. We do have 
to have a national fuel strategy and a national CAFE strategy. 
Whatever it is, it should be national. It is uniquely a 
national issue.
    Mr. Sanders. What about indoor air quality? You started off 
by talking about that.
    Mr. Seif. That is a very important issue.
    Mr. Sanders. Is that something Pennsylvania is doing much 
on?
    Mr. Seif. We have done a fair amount on it. We are building 
and have just cut a ribbon on a new green building. It is so 
environmental efficient that it sells power back to the grid.
    Mr. Sanders. Do you help schools?
    Mr. Seif. Yes, we do.
    Mr. Sanders. Do you provide funding for schools that want 
to clean up their ventilation and so forth?
    Mr. Seif. Yes, and we are building it into State bidding 
standards or standards for grants to school systems to make 
buildings green in energy efficiency.
    Mr. Sanders. For schools to get funding from the State they 
have to have certain types of standards; is that what you are 
saying?
    Mr. Seif. Or head in that direction. The fight is on.
    Mr. Sanders. I won't tell the chairman that.
    Do you have other comments on asthma?
    Mr. Hackney. Well, again, speaking individually and not for 
NCSL, in North Carolina I introduced the mobile air emissions 
bill. This last time we had hearings we had an emergency room 
physician from UNC Hospitals in Chapel Hill come in.
    On the days when the ground level ozone levels were very 
high the very young and the very old show up at the emergency 
room. It is a serious problem.
    So, the answer briefly is yes.
    Mr. Sanders. OK. Are there other thoughts on asthma?
    Mr. Recchia. If I could tie it back to the diesel emission 
issue, that was one of the most frustrating parts about some of 
the diesel issues because we were trying to work with the non-
road vehicles in urban areas, Boston, for example, when they 
were doing the big dig.
    In New York City, obviously, asthma issues are significant 
in an urban area like that, at least the reports are that they 
are increasing dramatically, even beyond what we are 
experiencing in Vermont.
    So, you know, to be able to get cooperation to control 
those vehicles and get them retrofitted because, you know, they 
were going to be onsite for 2 or 3 years, was very important.
    Ms. Scarlett. Perhaps I could loop this back to the 
discussion of State innovations in general and make the 
following comment on the several questions you have asked, 
which have really been about whether we are clean enough, safe 
enough, healthy enough with our standards, and say that I think 
you have heard concurrence that, you know, environmentalism is 
a journey, not a destination.
    We are not at that final destination and there are many 
unattended problems. But the issue is not just do we need 
grandfathering and do we need CAFE standards, do we need 
greater standards or changes emission control requirements?
    It really does get back to, in any event, how does one do 
this?
    On the grandfathering, for example, it is not just ought 
those facilities to be grandfathered, but the question is how 
is it that they are going to be enabled to achieve those goals 
and, for example, will they and other facilities who are 
already regulated still be faced with a source-by-source--for 
example, best available control technology--rule, which 
sometimes inhibits them from looking facility-wide at all their 
sources and optimizing their reduction across multiple 
emissions.
    A case in point is in Florida, with an electric utility who 
had a non-BACT technology which would have reduced multiple 
emissions across the board, albeit for one of the emissions not 
quite as low as the BACT technology.
    But the question is do we want this multiple ability to 
address all sources? Then on the SUV issue. I chair for the 
State of California the Inspection and Maintenance Review 
Commission, which oversees and evaluates that program.
    One of the challenges we have is that the SIP process, the 
State Implementation Plan process, in a sense is kind of an up 
front and modeled exercise, that is a State develops a series 
of programs it is going to implement.
    Attributed to those programs are certain kinds of modeled 
guesses at what reductions will be achieved, and EPA approves 
up front or does not approve up front, as the case may be, that 
plan.
    So, some States don't get credit for programs that they 
want to implement which they think have a good chance of 
reducing emissions, California being the case in point with 
some ideas that it has on that front.
    Then again to the asthma issue, as for example the State of 
Texas grapples in Houston, grapples with its problem. One of 
the challenges is that many of the remaining emissions, 
particularly the ozone forming emissions, are from small 
sources, dry cleaners, bakeries and so forth. This is what we 
grapple with in California.
    The question is do you try the permit-driven approach with 
a kind of BACT technology, where you have to have this smoke 
stack scrubber approach, or do you try, for example, what 
Illinois has done with its Clean Break Amnesty Program, which 
is to say, ``We know you as a dry cleaner don't have on your 
staff an environmental engineer. Let us help you understand the 
problems and solve them.''
    So, let us not separate the standard from the ``how,'' 
which I think is a lot of what the State innovation discussion 
here is trying to get at.
    Mr. Sanders. Mr. Chairman, thank you very much for the 
extra time.
    Mr. Ryan. I would like to get back to the whole idea of 
this race to the bottom, race to the top notion. I would like 
to engage Ms. Scarlett and Mr. Olson first and then the rest of 
the witnesses.
    Ms. Scarlett, you wrote a study called ``Race to the Top, 
the Innovative Face of State Environmental Management.'' I take 
it that you do not believe that the States, if allowed greater 
autonomy and discretion in setting environmental policy would 
engage in a race to the bottom. Could you explain why?
    Similarly, what we have heard just from witnesses here 
today is that there are innovative, exciting programs out there 
in the States right now under the current kind of regime.
    If these things are happening right now, where is the 
problem? Please address these two issues.
    Ms. Scarlett. OK, well, let me try to make it brief. I 
don't want to be Pollyannaish and suggest that there is never 
any challenge, that there aren't some ill-deed doers out there, 
whether it is an individual firm or a State itself that has 
made fewer investments in environmental protection than others. 
Certainly, that occurs.
    But there are several reasons to think that we are more in 
an era of race to the top rather than race to the bottom. One 
is that most American citizens at this point, 85 percent, when 
asked, say ``I am an environmentalist.''
    Remember that environmental laws don't spring from nowhere. 
They spring from constituent interest. That interest resides 
not simply at the Federal level but at the State level and 
fairly strongly.
    Second, remember too, as several of the Congressmen pointed 
out, that State legislators are often closer to those 
constituents than one is often in Congress. So, when things are 
bad, I think that Jim Seif next to me will say that he hears 
about it. He hears about those environmental problems and 
fairly quickly, whether from environmental activists and/or 
from other members of the public.
    So, that general psyche is out there. It is driving in the 
direction of race to the top.
    Now, is this merely hypothetical? No. What we have tried to 
do is to document what is going on. You have programs like the 
Massachusetts Environmental Performance Program. They had a dry 
cleaner and a photo processor program. Through that program 
they achieved a 43 percent reduction in perchlorethylene 
emissions, 99 percent reduction in silver discharges.
    You have the brownfields programs. You have heard several 
of the State innovators mention them, but in a very short 
number of years you had Pennsylvania cleaning up-how many sites 
is it now?
    Mr. Seif. 777.
    Ms. Scarlett. You had Illinois with over 500 brownfield 
sites cleaned up.
    Mr. Ryan. You guys did better than----
    Ms. Scarlett. But this is actually what you have going on 
to some extent, a competition to do better. So, I think that 
observationally and empirically we see improvements.
    Mr. Ryan. Right. It is great to see the competition among 
these brownfield programs.
    Mr. Olson, I want to ask you because I was intrigued by 
something you said in your testimony. I can't remember the 
number you mentioned. I think you said 19 States adopted at 
least one statute prohibiting their State environmental regs 
from being any more stringent than existing Federal regs.
    Mr. Olson. Right.
    Mr. Ryan. And that is to buttress your point that you 
believe a race to the bottom would occur if States were given 
more autonomy.
    Isn't that kind of a one-sided point of view? I mean given 
what Ms. Scarlett just mentioned, also given the Council of 
State Governments' finding that 80 percent of the States have 
at least one clean air standard that exceeds the Federal 
minimum?
    Isn't there more to the picture than just the fact that 
these 19 States have these regs out there?
    Mr. Olson. Sure there is. I guess what I would say is if 
you lifted all the Federal laws right now, environmental laws, 
and I know nobody is suggesting that, but if you did, I think 
as soon as the gun went off there would be a race in both 
directions. Some States would race forward and some States 
would race backward. It would probably depend on the program.
    There are significant pressures to weaken standards, and I 
am sure the State representatives here would tell you that 
there are significant pressures. In some cases you have a major 
employer or a major industry who is threatening to move out of 
the State. There are many other reasons that there are 
pressures for States to go below the Federal standards.
    I would be happy, for the record, to submit examples where 
States in fact are not currently living up to minimum Federal 
standards.
    Mr. Ryan. Do you think that may be partly because of the 
prescribed technology they have to have or do you think they 
just won't do it because they want to attract the business?
    I think it is going to be one of these issues where you 
probably have to go on a case-by-case basis. Lynn just gave us 
an example where companies had different technologies that 
would have worked better, but Federal law mandates BACT 
technologies that are inferior.
    I think that is very complicated. It is tough to paint that 
one with a broad brush.
    Representative Hackney, did you want to make a point?
    Mr. Hackney. I want to say that I think the reason you hear 
so much unanimity today on keeping strong Federal environmental 
standards, is that the examples quoted by Ms. Scarlett and by 
Mr. Olson are substantially correct.
    You can find, if you look, places where States have not 
done as much as they should. You can find, if you look, a lot 
of places where States have done wonderful things.
    So, we take the position that policywise that States need 
the Federal backup, the Federal standard, but with the 
flexibility to do better and maybe do it in different ways.
    Mr. Ryan. Yes. It sounds like a case is being made across 
the board for performance-based standards with autonomy and 
discretion to go find the best way to meet these standards, 
find the best technology to accomplish those goals.
    If anybody disagrees with that, please speak up.
    I wanted to ask you, Ms. Studders, a quick question. This 
is an interesting chart you showed us, your geographic 
breakdown. It is very intriguing that you decided to use a 
regional approach to configure your agency and controls instead 
of the silo approach.
    Is that being done anywhere else and have any of your State 
counterparts consulted you on doing that? Have you run into any 
kind of Federal barriers in trying to implement this 
restructuring?
    Ms. Studders. I might be corrected by one of my peers who 
have more time than I. I think Wisconsin did a similar 
reorganization, slightly different, but geographically based. 
To my knowledge, we are the only two States that have done 
that, Congressman.
    What is different about it or what we have found that is so 
successful is that we are at the source of the problem. I will 
be honest, the northern part of my State is mining and it is 
recreational lakes.
    The skills of the scientists that I need in the north are 
very different than the skills I need dealing with feedlot 
operators in the southern part of the State of Minnesota.
    In the Karst area, which is southern Minnesota, I know 
several other States here have the Karst dilemma, which is 
geology that allows pollution to move very rapidly without 
knowing where it is going to go. I need experts in the southern 
part of the State who can deal with that.
    Where I can tell you that we have had some difficulty, and 
I will be honest on two fronts, the Federal Government and the 
entire environmental protection system that we are all speaking 
about today was created in reaction to crises. We created the 
Clean Air Act when we had air pollution problems; the Clean 
Water Act when we had a couple of rivers on fire.
    The unfortunate part is that you can have staff working in 
a program in the air area and they don't talk to their 
counterpart in the water area. That is how you come up with 
these major enforcement dilemmas that hit the headlines of the 
paper and they say, ``What is the environmental agency doing 
wrong?``
    When you are arranged by those silos, as I literally refer 
to them, there is no reason for the air people and the water 
people to talk to one another, share their information, find 
out if they maybe have a problem company that they need to sit 
down and talk about.
    With our new organization, my staff that are hydro-
geologists, that are scientists, that are working in the air, 
water, the brownfields and the remediation area are on a team 
working on a facility. They are able to holistically look at 
that facility and prioritize what we need to do first to get 
that facility into compliance.
    So, we are looking at the environment. We are not just 
looking at a permit regulatory requirement.
    Mr. Ryan. That is fascinating.
    Ms. Studders. It is tough, though, when we are trying to 
interact with the Federal Government and other States. My 
comment to my staff is we have to make it hard on us and easy 
on everybody else.
    Mr. Ryan. That is interesting. Go ahead.
    Mr. Seif. That is food for thought in that regard. EPA is 
also ``siloed'' and it does affect, in the same way as Karen 
has described, their overall stewardship of the environment and 
the Nation.
    We also have a very heavily regionalized EPA. Richard Nixon 
thought in 1970, let us have these 10 standard Federal regions 
and all Federal agencies were supposed to go with that 
arrangement. Only EPA has stuck with it; everyone else has gone 
back to different arrangements--whether better or worse I don't 
know.
    EPA is very heavily regionalized and that increases, I 
think, some institutional myopia in terms of dealing with 
programs. The very successful Chesapeake Bay Program, the Great 
Lakes Governors and others have organized around very natural 
boundaries called watersheds, the boundary that God made. That 
works a lot better.
    We hope in Pennsylvania to go in that same direction.
    Mr. Ryan. Mr. Marsh and then Mr. Recchia.
    Mr. Marsh. Yes, I think just to supplement what my 
colleagues have said, many States have regional offices. I am 
not sure that they are specialized to the same extent as in 
Minnesota and Wisconsin.
    But there is a movement, very definitely, to bring 
environmental agencies across the board out to work with local 
communities and watersheds, in neighborhoods in urban areas, to 
try to focus on holistic programs at the local level.
    This is causing the need for significant cultural change 
within the State agencies. I think one of the difficulties or 
lags, if you will, is that the EPA in either the headquarters 
or the regional offices are not quite there yet.
    I think one of the promises of the performance partnership 
process is to bring the Federal agency, EPA, in particular, 
down to the regional problem-solving level where I think most 
of the States are going.
    I think a lot of the successes we are seeing in overall 
improvement in environmental results are at the watershed and 
regional air pollution levels.
    So, I think one of the challenges for the next number of 
years is bringing all of the resources to bear to solve 
problems more comprehensively.
    Mr. Ryan. Mr. Recchia and then Ms. Studders.
    Mr. Recchia. Thank you, Mr. Chairman. I would actually like 
to go back to an earlier topic if I could and just touch 
briefly on the race to the bottom issue again. I generally 
agree with Lynn that we are moving in the other direction, in 
general.
    But I think there is a potential with deregulation to go 
the other way. I would offer you a thought about how to maybe 
correct for that, using, if you will, market forces and the 
constituents that Lynn had mentioned.
    You know, generally, the public is interested in holding 
people accountable for good environmental performance. That is 
a wonderful asset in Vermont and I have no reason to believe it 
is not true around the country.
    What that means is the constituents need to know what the 
environmental performance of those groups are. In other words, 
there has to be some sort of environmental performance measure 
or standard index or indices, if you will, of how, if I am 
producing power in Vermont from a hydroelectric dam, how that 
equates environmentally to someone producing power out in a 
Midwestern State from a coal-fired power plant.
    So, these constituents need to be able to see that. I guess 
I would offer the same issue on the mercury front. You know, 
part of the frustration from the region's standpoint is we feel 
like we are doing a part that the Federal Government should be 
doing in the form of dealing with consumer awareness of mercury 
in products and package labeling and things like that really, 
ideally, would be done on a Federal level.
    That is the kind of partnership that I think works well. I 
could explain to you all the great things we are doing on 
mercury control in our State from the regulatory to the 
voluntary, but on these broader issues, and particularly on air 
issues, as you will see, we need more national presence and 
consistency to help level the playing field.
    Mr. Ryan. Ms. Studders.
    Ms. Studders. Thank you. I wanted to supplement the 
question you had asked in light of what some of my peers here 
had said to you in responses.
    We have a contract between the Minnesota Pollution Control 
Agency and EPA, the Environmental Performance Partnership 
Agreement. It is a 2-year contract. Not all States have it. I 
apologize, I do not know the number of States that have that 
contract. I think it is around 30, but I am guessing at that 
number.
    In that we set up expectations of what the State is going 
to do and what the Federal Government is going to do.
    To supplement what Secretary Seif said, one of our dilemmas 
is, we can negotiate that in good faith with EPA and the staff 
that do the agreement can come to agreement with our staff. 
When we run into barriers is when it goes into the EPA 
structure, into the different silos, into the air program, the 
water program, and the land program.
    They have specific measurements they want in that contract. 
They aren't environmental measurements. They are the old style 
measurements that I spoke about. That is where one of my 
messages on flexibility is. We have to start looking at that 
whole body of water, that whole air shed. We have to because 
just that one indicator doesn't tell us if we are doing our job 
well.
    Mr. Seif. There is an even worse silo at EPA than the 
media--air, water and so on. It is more like a black hole. It 
is enforcement. OECA pollutes other portions of the agency that 
have great ideas, great ideas for flexibility, innovative and 
so on. You can always count on an OECA lawyer or a DOJ lawyer 
to say, ``Oh, we can't do it that way because in 1982 we did it 
a certain way.''
    I believe the EPA is actually the conservative among the 
players you see simply because the culture of the agency is 
that way. It was effective, it was exactly how you would want 
them to be in 1975. You don't want them to be that way in the 
coming 10 years.
    Mr. Ryan. That is interesting.
    Ms. Scarlett.
    Ms. Scarlett. I would like to just kind of loop this 
together in the barrier issue, and then make what I think is 
perhaps a constructive suggestion.
    One of the things that Minnesota faced, and other States 
faced, as they have tried to move to a more holistic and 
regional approach, is a lack of clarity between the 
relationship of the old silo-by-silo permits and the new 
facility-wide or industry-wide or holistic permits that 
Minnesota and others are exploring.
    It is a lack of clarity, not a slam-dunk. Obviously, some 
States have managed to move forward with these endeavors.
    But a Federal or congressional authorization that made that 
somehow clear, I think, would be something worth examining and 
exploring.
    Second, and also related, there is a mismatch between the 
reporting requirements, the permit-by-permit reporting 
requirements, and the more holistic environmental performance 
indicators that Florida, Oregon, New Hampshire and others are 
moving toward.
    So, if there were a way, again, to reorient the Federal 
focus on performance indicators that mesh with these new 
directions, I think that would be fruitful.
    Now, one constructive thought on thinking about the race to 
the bottom and the race to the top and how does one grapple 
with the fact that both are obviously possible, and that is to 
take again a page from the States, the Green Tier Permitting 
Program in Oregon and also that in Wisconsin, which actually 
has tiered permits.
    One could take, for example, the current NEPPS agreement 
and develop a congressional kind of authorization whereby those 
States that have NEPPS agreements and have these compacts that 
have performance requirements in them are then essentially 
fully responsible for permitting an enforcement and only held 
to the test periodically on ``are you achieving real results?''
    Those States that either do not want the delegated 
authority, do not have a NEPPS agreement for whatever reason, 
could still remain in the old environmental regulatory regime.
    This allows us to move forward without jettisoning the 
past, if you will. So, it is something to think about.
    Mr. Ryan. Sure. That is a very provocative way of putting 
it.
    Mr. Sanders.
    Mr. Sanders. Thank you very much, Mr. Chairman.
    I just have two questions. I don't think there is any 
disagreement that there are some areas where the local and 
State government are better equipped to move and there are some 
areas where the Federal Government must play a very important 
role.
    You mentioned the word ``dry cleaning.'' I remember in 
Williamstown 20 years ago, a small town in the State of 
Vermont, we had a problem. The water was severely polluted. The 
State of Vermont could handle that. I don't think we don't need 
the Federal Government.
    On the other hand, it is reported that the hole in the 
ozone layer is now three times the size of the United States. 
There are, I guess, credible suggestions that causes skin 
cancer around the world.
    The State of Pennsylvania is not going to solve that 
problem, nor even will the great State of Vermont all by 
itself. Here is where you have a problem.
    Does anyone disagree that on areas like that the U.S. 
Government, along with the rest of the world, is going to have 
to play a very, very active role? That is my question.
    Ms. Studders. Congressman Sanders, from my perspective, in 
Minnesota we share a boundary with Canada. I don't just deal 
with State environmental issues. I am dealing with 
international environmental issues.
    Mr. Sanders. That is right.
    Ms. Studders. The environment is global. The water is all 
connected. I learned a statistic when I got this job that I 
will share with you because it shocked me.
    We know how China pollutes. The 10 most polluting cities in 
the world, air-pollution-wise, are in China.
    Mr. Sanders. That is right.
    Ms. Studders. The air, to get from China to Seattle, takes 
4 days. It takes 1 more day to get it to Minnesota. So, we have 
to start thinking about the question that you asked earlier 
about what do we want our air and water to look like in the 
future. This is a global issue.
    Mr. Sanders. That is right. But you have no argument with 
the statement that this is not going to be solved at the 
statewide level. It is going to be a national and international 
solution.
    Mr. Seif. I think there is another spectrum along which we 
must think globally, that is geographic as has just been 
mentioned. But what goes up a stack is a soup of stuff. It is 
mercury, let's say. Here I go, I can see Marlo Lewis getting 
ready.
    That fact is, to be inflexibly against the regulation of 
CO2, in a power plant stack, while urging innovation and the 
like in the control of other kinds of pollutants, say mercury, 
is not quite realistic. It is not how power gets generated. It 
is not how planning gets done. It is not good engineering.
    It may be that there is a good legal case, I believe there 
is, that EPA doesn't have statutory authority concerning CO2. 
But if EPA is to be managed or overseen by the Congress in a 
flexible way, just as we would like it to oversee us in a 
flexible way, it ought to be able to work with us, with the 
Ozone Transport Commission, with individual States, with power 
plants, with power companies, with other nations, to work on 
all pollutants.
    It should work to develop technology, techniques, 
treaties--though I don't favor the one now before the Senate--
and other devises without having its hands sort of tied because 
someone just doesn't agree with a particular step it may have 
taken, or with its sometimes ``lead with the chin'' approach 
about the way it operates.
    The fact is flexibility is important from the Congress as 
well as from EPA to the States.
    Mr. Sanders. But having said that, you would not deny for a 
second that the Federal Government, in fact the international 
community has got to be actively involved in addressing this 
crisis situation?
    Mr. Seif. Actively and unfettered by particular agendas 
against particular actions that they might, or ought to, 
consider or at least research or think about.
    Mr. Sanders. Let me ask another question, my last question, 
if I might. I am curious. I don't know what the answer to this 
one will be.
    I think that around the country, although not in the U.S. 
Congress, I should say, there is growing concern about 
genetically modified organisms, the issue of labeling, the 
issue of long-term possible health effects is something that 
is-I will give you one example.
    There are some companies that are making new fish. I guess 
they have created a new salmon, which is two or three times 
larger than the old salmon we used to have. The threat is if 
that escapes into the waterways it could wipe out the specie 
that we know today as salmon.
    It is actually among ordinary people an issue to the degree 
that they know about it in Europe and there is a great deal of 
concern about this issue.
    Is that an issue that is on the agenda of any Statewide 
environmental agency?
    Chris.
    Mr. Recchia. Yes, I would like to respond to that because I 
probably feel more passionately about this than I ought to 
because it is sort of beyond the scope of my normal profession, 
but I will say it is very related to the mercury labeling thing 
I was just mentioning in the sense that I think that if you 
want to enlist people of ability to vote with their feet, if 
you will, or vote with their dollar or do any of that, they 
must be informed about this.
    It doesn't mean we have to have all the answers and know 
necessarily whether it is good, bad or indifferent. The fact 
that it is different and people have the ability to make their 
own judgments about it as time goes on, I think, is very, very 
important.
    I think it is very important for mercury-containing 
products, fluorescent light bulbs. If there is no alternative, 
fine, put the mercury in. But tell people that it is in there. 
They can judge whether that is good for them or not.
    Mr. Sanders. You are suggesting labeling of genetically 
altered products?
    Mr. Recchia. Genetically altered foods, I would say the 
same thing. I don't think any of us, at least no one in my 
profession I know of would sit here and say ``We know all the 
answers to environmental problems. So, you don't really need to 
know that, ladies and gentlemen, because we will take care of 
it for you.''
    I think that is very patronizing and presumptuous and I 
think that we ought to simply inform people of the range of 
things they are ``concerning.''
    Mr. Sanders. Are you supporting Federal legislation or 
State legislation?
    Mr. Recchia. On this type of thing I would support Federal 
legislation for the same reason I would support Federal 
labeling of mercury-containing products, etc.
    Mr. Sanders. Yes, Ms. Studders, go ahead.
    Ms. Studders. If I could do a friendly amendment to what 
Vermont is suggesting. In Minnesota, we have an organization 
called the Environmental Quality Board. It is comprised of 10 
agencies in the State and five citizens.
    Our job is to oversee environmental policy, particularly 
where it crosses into different agencies.
    I am going to give you an example of your question with 
GMOs. There are health departments in the United States that 
have some jurisdiction over that. There are agricultural 
departments that have jurisdiction over that. There are 
departments of natural resources or U.S. Fish and Wildlife that 
have jurisdiction, as well as the Environmental Protection 
Agency.
    You have hit on a perfectly good example of why the old 
system isn't working for us. Our environmental problems today 
are crossing geography. They are crossing science. They are 
crossing different disciplines.
    I don't think you can say one agency has to do this. We 
need teams now. The genetically engineered organisms, I mean 
the impact is phenomenal, but I don't think one agency with its 
expertise can solve that.
    To the extent we can encourage that at the Federal level 
and not just give it to one agency, I really think that 
diversity is needed on issues like that.
    Mr. Sanders. That is a good point. Are there any other 
thoughts on GMOs?
    Mr. Marsh. I would just like to say that I would completely 
agree with the gentlemen from Vermont's suggestion that some 
kind of Federal legislation requiring labeling for genetically 
modified organisms in food would certainly make some sense, so 
people would know and they could make their own decisions.
    Mr. Sanders. Some of us are trying to accomplish that. 
Thank you.
    Mr. Chairman, thanks very much.
    Mr. Ryan. No problem.
    Let me just wrap up and ask a basic question of all 
panelists.
    Ms. Scarlett, you mentioned three legislative remedies that 
you thought might help promote State environmental innovation: 
amend existing environmental laws by including flexibility 
provisions, develop an EPA authorizing statute specifying 
congressional support for State environmental innovations, and 
develop a statute allocating resources to States based on their 
achievement of performance goals.
    In that context, I would like to ask everybody a question 
what do you think Congress ought to do?
    The purpose of having you here is to have you advise us. 
What do you think Congress ought to do to facilitate your 
ability to improve the health and welfare and environments of 
your respective States? What kinds of flexibility? What kind of 
things do you think we ought to focus on doing here?
    I will just start from left and go right. How does that 
sound?
    Mr. Recchia. It sounds not as good as starting from right 
and going to left.
    Mr. Ryan. It is your right and their left. OK.
    Mr. Recchia. But I will. I guess I think that I would agree 
with Secretary Seif. The weird part of the Federal 
administrative agency right now in terms of the level of 
cooperation and moving forward in a cooperative way is the 
Office of Enforcement and Compliance Assistance [OECA]. So, I 
would urge you to do something there.
    I think the other thing you could do, because I believe EPA 
wants to do the right thing and support us in these areas, is 
build in the flexibility for EPA to establish standards that 
are based on scientifically sound information that form the 
basis of health or environmental performance levels that we 
need to get to, but where there may not be technology out there 
to achieve those standards, and allow flexibility for people to 
see if they can innovatively get to that point.
    I think right now they are so hounded on both sides that 
they don't have any room and flexibility to move. I would also 
agree with Jim's comment about, you know, no one should be 
muzzled in doing the environmental work of this Nation and I 
would urge us to not have that type of reaction when we 
disagree.
    Mr. Ryan. OK. Thank you.
    Mr. Marsh. Mr. Chairman, I think that in addition to 
promoting and permitting flexibility by EPA such as they have 
done through the regulatory innovation agreement with the 
States, and I think there may be something that can be done to 
buttress that flexibility, I think that the resources are 
probably the major limiting factor for both the EPA and the 
States to be as flexible as they need to be.
    I think the business community in our State does recognize 
that if permits are going to be flexibly administered, you need 
to have the people there available to do it.
    Now, it is not all a Federal responsibility, to be sure, 
but I think that looking at the capacity of both the States and 
the EPA, through its regions, to work cooperatively and 
flexibly, there is an element of a resource question there that 
I think that Congress can address through its budget process.
    Mr. Chairman, I am going to apologize, but if I am going to 
get back to Oregon tonight, I have to leave right now.
    Mr. Ryan. Please go ahead, by all means. Thank you for 
coming.
    Mr. Marsh. Thank you very much for inviting me.
    Mr. Ryan. Mr. Walden sends his regards. He was stuck in 
another committee, but he wanted to come.
    Mr. Marsh. Thank you.
    Mr. Olson. I would make three points in response to your 
question. First of all, the Federal Government can and should 
be providing funding to States and to EPA's programs that are 
trying to encourage innovation at the State level.
    I think that is one of the most important things that the 
Federal Government can contribute.
    Second, it is very important to try to identify better 
measurements of performance. I don't know if you have looked 
through the GPRA reviews that EPA does or the so-called 
Government Performance and Responsibility Act. But many of 
those, frankly, identify things like the number of permits 
issued, which are important, but is that really what we are 
after?
    Perhaps what we ought to be focusing on is ways to identify 
actual environmental improvements and making those achievable 
through some kind of enforceable requirements.
    I do want to just highlight why OECA, which has been sort 
of whipped today, and other parts of the agency sometimes put 
the brakes on the flexibility that has been suggested. I don't 
know all the examples that may have been cited here, but 
certainly one person's flexibility can be another person's 
gutting of a requirement.
    The concern often is will this requirement be enforceable. 
Very often some of the proposed flexibility, which sounds good, 
can end up becoming almost unenforceable. You know, if you give 
a lot of flexibility to a Midwestern power plant that is 
belching a lot of pollution, is that going to end up being so 
much flexibility that you can have no enforceable requirements 
and it will end up polluting the northeast, Vermont and 
everywhere else? So, you know, that is obviously one issue that 
comes up frequently.
    Ms. Edgar. Florida would echo the comments of our sister 
States and colleagues regarding some of the difficulties that 
we have had trying to bring what we considered to be good ideas 
and innovative ideas and being stalled by OECA.
    We also would look for some ability to devote financial 
resources to problems that are identified, to priority problems 
rather than stovepipe distribution of funding sources.
    To follow on a comment by Ms. Scarlett earlier, many of the 
Federal requirements require States to collect reams of data on 
outputs that really are of marginal use in analyzing and 
understanding the outcomes of our environmental programs.
    So, I think direction from the Federal level, from 
Congress, from EPA to work with the States and help us with our 
data integration, help us with data quality, data 
standardization.
    As an environmental agency, data is what we deal in, data 
and science. In many instances we are dealing with incomplete 
data to help us do true assessment, but yet we are required to 
continue to report and to report and to report.
    So, again, we need some direction to help us standardize 
and be able to have indicators that help us with meaningful 
outcomes.
    Mr. Ryan. Thank you.
    Ms. Studders. Minnesota thanks you for this opportunity. I 
am going to give you seven suggestions that I really need. Some 
of them are echoed by my peers and in others I am trying to 
pull together a lot of what we said today.
    The first is we need statutory flexibility. What I would 
actually suggest is that you might want to think about a task 
force or a work group to sit down and talk about what 
specifically would be needed in that arena to help us with 
innovations at the State level.
    I think one of the things you need to understand is our 
existing environmental statutes do not allow us to function 
risk-free. When you are experimenting you need to have a safety 
net that you can function in. We need that.
    The second thing we have already touched on within OECA. I 
don't want to beat up OECA, but let me draw an analogy. Today, 
when I ask people, when something happens and they want to take 
an enforcement action, the first question I ask them is: ``What 
was the impact on the environment? What was harmed? What was 
hurt? What was lost? How serious is it? Is it irreversible? How 
long will it take to recover?''
    That, to me, is a very vital question. When I am having a 
fight with OECA that is not even on the table. The concern I 
have is--again, it is not against them; it is the system they 
were set up to enforce that is 30 years old.
    Mr. Ryan. What is it? Is it process questions?
    Ms. Studders. Well, that inspection found this widget out 
of whack or this piece of paper not there or this many 
emissions too large and did not look at what was the impact to 
the environment. I could take a simpler example and it would go 
back to where we have had our dilemmas with Project XL in 
Minnesota.
    One of our examples was a major corporation in our State 
wanted to go forward early on with Project XL. Part of the 
reason they actually backed out and why we backed out of the 
project was because the Federal system was not able to give 
them credit for changes they had already made that were above 
and beyond regulatory and that had been done before the passage 
of a law.
    It is just literally the nitpicking of ``has there been 
something already done above?'' We don't get credit for what we 
have already done. So, if we are innovative and then a law gets 
passed down the road, there is no credit for that.
    Actually businesses that choose to be environmental leaders 
are being penalized under this existing system by OECA. That is 
what is problematic about it.
    The third thing has to do with funding flexibility. Not 
only do we need more money, but also we need money that we can 
move around to where the biggest environmental threat is. Right 
now there are so many strings attached to the money, it is very 
difficult for us to do.
    The fourth has to do with communication. That is one of my 
strong messages as Commissioner. There needs to be a better 
dialog between EPA and the State environmental agency. There 
also needs to be a better dialog, as Secretary Seif said, 
between the regions and headquarters of EPA. Often the right 
hand does not know what the left hand is doing. We at the 
States get to deal with both entities. That is tough sometimes 
when HQ says one thing and your region says another.
    Then you add the complication of the media--air, water and 
land--within the agency. That communication between the silos 
has to start happening.
    The fifth is that I would like to challenge that we need to 
do environmental regulation based on incentives as opposed to 
punishments. Let us think about it. Most of us in this room are 
parents or we have a niece or a nephew or a sibling who is 
younger than us.
    We think about what causes someone to change their 
behavior. It is not getting yelled at. It is not getting beat 
up. It is getting some positive reinforcement to do a behavior 
change.
    I would like to think that is the ``second wave of 
environmental protection'' we have to put out there, especially 
when we are going to start dealing with nonpoint source 
pollution.
    The sixth thing has already been touched on. EPA needs to 
look at how it is structurally organized. It worked. It is not 
working now. We need to look at the media issue. We need to 
look at the regions issue. I would like to challenge that we 
may need to take it apart.
    The final and the seventh one is data integration. I know 
there is an issue that is before Congress now. I believe it is 
a $30 million appropriation in EPA's budget. It is for data 
integration with the States.
    Let me tell you how complicated it is right now. Fifty of 
us have computer systems. Fifty of us keep the data 
differently. EPA keeps the data differently. We don't put the 
decimal in the same place. The data can't talk to the data. We 
are spending millions of dollars, probably billions nationally, 
on this data. And it is kind of useless right now.
    We have to standardize the system. That is an example where 
the Federal Government needs to help. But the Federal 
Government can't design that system without having the States 
at the table. We have to be there to tell you what our 
computers can and can't do.
    Do you know what? With this thing called the Internet we 
can put that data on the Web and then citizens can start making 
decisions to help us with the air, water and land because they 
will see it. It will all be reported the same way and we can be 
a better informed country. So, my last one has to do with data.
    Thank you.
    Mr. Ryan. Thank you.
    Mr. Seif. Everything that Karen Studders said is absolutely 
on target and especially, I think, the last one. Unless we 
start counting the right stuff and try to break down what 
reinforces the counting of the wrong stuff, which is 
bureaucratic culture, including mine.
    While I am here today giving advice on how other people 
should do stuff, my bureaucrats have done some very dumb things 
today. I don't know what they are. But I will find out 
tomorrow.
    That is because they are pursuing, under statutes or under 
EPA grant direction, or because of the silos that they have 
grown up in over 30 years in the agency, or because of external 
enforcement by environmental groups saying, ``If you are not 
putting people in jail, you are not doing the job.''
    Whatever it is, we have to change what the goals are. Then 
the same bureaucratic behavior that we decry and love to bash 
and get headlines about will in fact serve the environment, if 
we can get them to count the right stuff. That is the key.
    I think Congress, frankly, could reorganize itself in terms 
of the committee system to give EPA--well, you asked!
    Mr. Ryan. Yes, I know. Let us have it.
    Mr. Seif [continuing]. To give EPA a much better chance of 
being responsible and responsive rather than perpetually jerked 
around in terms of what their goals are and in terms of what 
the oversight objectives are.
    A good place to begin, as Karen mentioned, would be the 
budget. But that is only after you handle the data systems, and 
in particular, please cough up that $30 million so EPA, which 
has the right approach in mind and has lots of State buy-in----
    Mr. Ryan. Is that in the VA-HUD bill? Does anybody know?
    Ms. Studders. Yes. It is in their budget.
    Mr. Ryan. Is it in VA-HUD right now?
    Ms. Studders. I know it is in their budget.
    Mr. Seif. I don't know where it is. I am told it is in the 
Senate.
    You know, if the only tool you have is a hammer, every 
problem looks like a nail. OECA is a hammer. There are lots of 
other tools. If we could just incentivize and fairly count 
their use, it would make a world of difference.
    Mr. Ryan. Thank you.
    Ms. Scarlett. Well, Congressman Ryan, I have already 
mentioned a few, but let me just briefly repeat them. I do 
think it is worth considering an authorizing statute for EPA 
that would provide a vehicle to actually include clarification 
of the respective permitting authority between the States and 
the Federal Government.
    As I suggested, this doesn't need to be either/or. One 
could perhaps use a NEPPS style agreement as the mechanism to 
make that happen so that some States would still be under the 
old regime and some would enter the new.
    Second, I do think that one needs to think about a 
reorientation, perhaps, of resources toward data integration 
and development of performance indicators. It could be either 
resources to the States as they begin to work on those 
performance indicators.
    I find it ironic that we have been 30 years into our 
environmental regulation with so much emphasis on permits and 
process that we have actually unattended to those indicators 
and their development.
    Third, and relatedly, I think funding flexibility, we now 
do have some block grants that go to the States, but they tend 
to be silo by silo. So, again, there is not the opportunity for 
a State that has a water problem to use those resources for 
water. Instead they must use it for air, which might not, for 
example, be their primary problem.
    Then finally, and perhaps more controversial than any of 
those three, I do think there is a need to reorient--I don't 
know how this can happen. This is much more complex. I think 
there is a need to reorient Federal resources toward ongoing 
monitoring and actual performance--kind of ``the proof of the 
pudding is in the tasting; how did we actually do'' rather than 
up front second-guessing of program design.
    I think the SIP process is a classic example of that up 
front kind of preemption and second guessing rather than 
letting States say, ``This is what we want to do.''
    Sign a compact, if you will, a Netherlands style compact. 
``This is what we are going to do.''
    Hold us to the test in 2, 3 or 4 years and if we don't 
succeed at that point, let us go back to the drawing board.
    But that up front process actually does keep off the table 
some very good innovative programs that otherwise might yield 
performance.
    Mr. Hackney. Mr. Chairman and members of the subcommittee, 
thank you for this opportunity. I want to start out by 
advocating something that you have just done, that we have 
advocated in our testimony, to establish a better and a more 
formal communication process between the State legislatures and 
the Congress.
    You have certainly started that today. I want to reiterate 
that. I do think it is a two-way communication process. I think 
it should be more formal. I think EPA should be intimately 
involved with it as well.
    Second, avoid mandates and preemption.
    Third, send money.
    Mr. Sanders. And cut taxes?
    Mr. Hackney. In particular I want to mention send 
university research money. I think those are some of the best 
environmental dollars that we spend.
    I mentioned earlier in my testimony that we have a hog 
lagoon problem in my State caused by the immense expansion of 
the hog industry.
    We have a lot of important cutting edge research going on 
at North Carolina State University and we are trying to learn 
what does and doesn't work. Then we are going to put it into 
effect.
    We certainly invite the Congress to help us with that, 
including helping us fund research.
    We have advocated rewriting the major pieces of 
environmental legislation in 21st century standards. That is to 
say, let us look far off into the future and decide what we 
want our country to look like in terms of the water and the 
air.
    Perhaps we need higher standards. Perhaps when we advocate 
for uniform national goals and standards we need to aim high.
    Thank you for the opportunity to testify today.
    Mr. Ryan. Thank you.
    Let me just finish up by saying thank you to everybody for 
coming up here.
    You know, I am a new Member of Congress here and I guess I 
didn't get the memo which said that I know everything now that 
I am a Federal legislator.
    But, I will tell you, there seems to be a bit of arrogance 
in this town that I have witnessed over the last couple of 
years. It is basically ``Don't let the facts confuse me. I know 
the answer and I am right. Here is the way it goes.''
    Your ideas are something we need more of, this kind of 
interaction, this kind of evidence, these kinds of stories help 
us, in my opinion, to learn about what works, what doesn't, 
what did work but what doesn't work any more.
    These are the things that I think we need to hear about up 
here. I am going to encourage my colleagues to review this 
testimony.
    I hope that this hearing is the beginning of a dialog, an 
understanding. As you mentioned, Ms. Studders, we need a 
``second wave of environmental protection,'' one in which we 
stop making the environment a partisan issue and emphasize 
getting things done and doing what works.
    So, I just want to say thank you very much for coming.
    Bernie, did you want to say anything?
    Mr. Sanders. I would just add my thanks as well.
    Mr. Ryan. I really appreciate everybody coming from such 
great distances.
    This hearing is adjourned.
    [Whereupon, at 5:27 p.m., the subcommittee was adjourned, 
to reconvene at the call of the Chair.]
    [Additional information submitted for the hearing record 
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