TESTIMONY OF WILLIAM J. RILEY GENERAL MANAGER - ENVIRONMENTAL AFFAIRS BETHLEHEM STEEL CORPORATION ON BEHALF OF THE AMERICAN IRON AND STEEL INSTITUTE PRESENTED TO THE UNITED STATES SENATE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS MARCH 4, 1997

The steel industry has been a leader in promoting reasonable Brownfields legislation at the federal, state and local levels. At the federal level, we have been working with both the Congress and the Administration. We led the efforts to include the Brownfields issue as a major element in EPA's Common Sense Initiative. We have been involved with a number of states, some of which have enacted Brownfields legislation, while others are currently developing Brownfields provisions. Today, we will address three principles that we consider to be fundamental for Brownfields legislation.

The need for comprehensive federal Brownfields legislation that complements current and future state legislation has grown enormously. Over the past two decades many large corporations, like Bethlehem Steel, have significantly downsized to respond to a rapidly changing global marketplace. Thousands of Brownfield sites exist throughout the country, some of which continue to deteriorate in our urban centers. These wasted assets, and the unnecessary despoiling of farmland and other "Greenfield" sites, have spawned numerous state Brownfield laws just within the last several years. Indeed, the states have taken the lead on this issue through voluntary cleanup legislation and have collectively developed a model framework that has achieved widespread support. In particular, I would like to commend Governor Ridge of Pennsylvania, who has been a strong advocate in the Great Lakes region for Brownfields legislation. A wide variety of Brownfield sites can be cleaned-up and redeveloped effectively and efficiently under existing state programs if federal legislation is enacted that promotes the "one master" concept: namely, that remediation under a state program will satisfy federal requirements.

There are basically two categories of Brownfield sites: abandoned sites and underutilized sites. Usually abandoned sites are relatively small in size and have been left deteriorating for a number of years. As a result, the infrastructure associated with these sites has also been deteriorating. Such abandoned sites are often municipally-owned and usually will require financial assistance for redevelopment. Brownfield sites with a viable owner are far larger in size and, with effective legislation, can undergo cleanup without the need for public funds. Often these sites are underutilized or surplus portions of large manufacturing sites which have ongoing adjacent operations. As a result, the infrastructure associated with these sites is usually in much better condition than that for abandoned sites, making them more attractive to potential buyers. There are a growing number of these sites in the United States, especially as a result of the restructuring activities in industries such as steel that have been made and continue to be made in response to intense competitive environments.

Federal legislation must address these properties directly. In order to do so, there are three primary objectives that must be addressed in comprehensive Brownfields legislation. They are: Federal Finality, Certification of State Voluntary Programs, and Eligibility of Sites. Each of these issues are summarized as follows:

1. Federal Finality -- State voluntary cleanup programs provide certain incentives to buyers and sellers of contaminated industrial properties, and thus facilitate faster cleanup and redevelopment of sites. However, to provide buyers and sellers sufficient incentive to make the necessary investment in these properties, these parties need assurances of "finality," i.e., assurances that they will face no further liability under federal or state law for those sites, or portions of sites, that are investigated and

2. Certification of State Voluntary Cleanup Programs -- To qualify for federal liability relief, a cleanup should be conducted pursuant to a certified state voluntary response program. We believe that the criteria set forth in Section 102(b) of S. 8 would be appropriate criteria for the certification of state voluntary response programs. In addition, a state seeking qualification for its program could submit a certification to the U.S. EPA that the state has in place a voluntary response program and that the state has the legal authority, organization, financial and personnel resources, and expertise to implement that program.

3. Eligibility of Sites -- In order to promote and accelerate the cleanup and redevelopment of a wide universe of underutilized industrial properties, "Brownfields" should be defined broadly. We should be encouraging the reuse of all commercial and industrial sites, not just a narrow category. In particular, we strongly believe that RCRA sites, where cleanup has not yet commenced and where cleanup would be accelerated by participating in a state voluntary cleanup program, should be eligible. There are approximately 6,100 RCRA corrective action sites. Less than five percent of these sites have completed cleanup. The legislative principles being suggested today would accelerate the cleanup for many of the remaining sites.

We would like to have the ability to cleanup "portions" of a facility under a state voluntary cleanup program and sell them to potential buyers for economic redevelopment purposes. RCRA, which triggers corrective action facility-wide, often precludes our ability to redevelop these properties in a timely manner. Again, we are not proposing to skirt our corrective action obligations, but merely striving to accelerate cleanup for economic redevelopment purposes. In addition, we are not seeking financial assistance or grant money to cleanup our facilities.

We applaud the Committee for addressing the problem of Brownfields. Remediating Brownfields is a win/win for all stakeholders because:

In conclusion, we believe that federal Brownfields legislation should not be limited in scope, and should, as its primary goal, stimulate and empower state voluntary cleanup programs.

The "one master" concept, whereby the state program satisfies all cleanup requirements and results in comprehensive liability relief, is the way to proceed.