JUNE 10, 1997


My name is Trish Bangert. I am presently the Director of Legal Policy for the Attorney General's Office in the State of Colorado. Prior to that, I was in charge of the section of the office that handled the environmental and natural resources legal issues for the State. Before coming to Colorado, I worked in the Solicitor's Office at the Department of the Interior. I was at Interior for II years, so I know well the federal agency perspective on environmental and natural resources issues. I also teach administrative law at the University of Denver. I want to thank the Committee for the opportunity to present our views on EPA-State relations, especially EPA's much-publicized partnership program.

In summary, I think that there is no EPA-State partnership in some areas of environmental enforcement. EPA's perspective appears to be that they own the ranch and that we, the states, are the hired ranch hands. For example, there is no compromise that I can see in the area of self- audit. EPA's policy is simply to dictate changes to state laws. In addition, I would like to respond specifically to the charges made by the EPA that some states, especially those with self-audit programs, are failing to protect the environment. In summary, my response is that those charges are hogwash.

States like Colorado are working hard to protect and improve our environment. Although I do not have specific statistics, I understand that the number of enforcement actions brought by the State has remained relatively steady over the past several years. More importantly, Colorado is working more effectively and efficiently to improve the environment. For example, there is general agreement that a "command and control" approach to environmental protection, by itself, does not work. The states, as the laboratories of democracy, are trying out new approaches that may bring greater protection at lesser cost. One new approach in Colorado and many other states is self-audit legislation. These statutes encourage companies to audit their own compliance with environmental laws and correct the violations found in those audits.

For its part, EPA is resisting innovative state approaches. Rather, the agency is affirmatively doing everything it can to create mirror images of itself in the several states. For states that do not like that image, EPA has launched a holy war, composed of negative comments in the press, threats to revoke delegated programs and overfilings. The end result of this battle inevitably will be that the environment comes out the loser. Something has to change before this happens. We come here today to suggest several such changes.

As detailed below, we are suggesting changes primarily in the areas of Congressional oversight of EPA activities, such as overfiling, the methods that are being utilized to measure success in the areas of environmental protection and improvement, and the legislative provisions applicable to the exercise of state authorities in the environmental area. We believe these changes are necessary to effectively and efficiently implement environmental protection and improvement. Further, they are necessary to prevent EPA from presenting roadblocks to new approaches that might represent positive environmental gains.

Environmental Self-Audit Programs

Let me turn to a prime example of EPA recalcitrance in allowing states to experiment with programs that might well result in significant environmental gains -- environmental self-audit legislation. Twenty-two states have passed some sort of legislation to encourage companies to audit their environmental compliance and to correct any problems found. In Colorado, we have a statute that gives a qualified privilege for self-audits and provides immunity from certain penalties if violations found in the audits are promptly corrected. Remember, we are talking about violations that probably would not have been discovered by the company, and certainly not by state enforcement officials absent the audit. We are talking about a positive environmental gain. Not only are companies becoming more aware and sensitive to environmental compliance through audits, but, problems are being corrected. In addition, companies and state regulators are working together in a cooperative, as opposed to an adversarial fashion to improve and protect the environment.

What is EPA's response to these innovative state programs? The agency is trying as hard as it can to eliminate these laws. In fact, over the past five years, the agency has engaged in a systematic program to kill the self-audit movement. First, it wrote to state legislatures considering self-audit laws to urge them not to pass the bills. Second, once bills were passed, the agency enacted policies that clearly expressed its opposition to the new laws and threatened to overfile in cases in which the laws were used. Third, the agency began a program of intimidation against companies and states utilizing the self-audit laws. For example, in Colorado, several companies utilizing the immunity provisions of the act, including the Denver Water Board, received letters requesting information about violations voluntarily disclosed. Further, EPA has threatened to overfile in those cases. My understanding is that EPA, in fact, has overfiled against companies utilizing self-audit laws in other states. Finally, EPA has threatened to revoke the delegation of environmental programs, such as those under the Clean Air Act, the Clean Water Act and RCRA, in states with audit laws. I have been told that the EPA regional office in one state invited petitions from the public to revoke the state's delegated programs.

It is a legitimate question to ask whether EPA's criticisms of audit laws have merit. At least in Colorado, we think not. EPA is concerned that states with audit privilege laws cannot enjoin violations that are harming the public or the environment. Our law retains fill injunctive authority. EPA is concerned that the laws might allow companies to hide violations. Our law allows a privilege only for information that would not otherwise have to be disclosed. And, the privilege does not apply to audits done to evade investigations or for fraudulent purposes. Further, under our law, a court can order any information released if there is a compelling need for that information. The EPA is concerned that the states will not be able to get penalties in certain situations. Under Colorado's law, immunity is offered only when violations are discovered in a voluntary self-audit, those violations are corrected, and the violations would not have been reported under a permit condition. Further, there is no immunity for willful criminal conduct or for repeat violators. In short, we believe that EPA's concerns are met by the provisions of our law. Regardless of that fact, EPA is looking at revoking our delegation under the Clean Water Act in response to a citizen petition. We are told that EPA will be sending us a letter shortly which details the "flaws" in our statute and asks that we justify our law.

What does EPA's negative response mean to state self-audit programs? We might as well toss them out the window. If a company comes forward with information about a violation of the environmental laws, it is providing a blueprint to EPA to bring an action against it. In addition, it is impossible to measure the success of audit programs if companies are discouraged from participating in them by EPA's threats of overfiling. EPA's response, in practice, nullifies state laws. Think about that for a moment. Not only has EPA spent a great deal of public money to advance its policy perspective, but, without even having to do a public rulemaking, or a formal hearing, EPA can change the laws passed by state governments. Texas substantially amended its self-audit law recently to meet EPA concerns. My understanding is that the state gave up, in part, provisions granting immunity in the civil and criminal areas and gave up audit privilege in the context of criminal cases. This is not the system envisioned by our founders -- an unelected, largely unaccountable body dictating the content of laws to a sovereign state.

Methods of Measuring Success and Overfiling

The EPA's obsession with self-audit laws appears to stem in large measure from its obsession with numbers. EPA has always measured success in protecting the environment in large measure by the number of enforcement actions brought and the size of penalties assessed. We applaud the fact that the agency has recently come out with new core performance measures for state enforcement and compliance assurance programs. Five of the eight measures, however, are still traditional enforcement "beans," that is, the number and size of enforcement actions. The eighth measure is the frequency and impact of the use of audit laws. It is unclear whether this is a positive or negative value in the measurement of performance.

Measuring success by the number of enforcement actions, as opposed to actual improvement in the environment, causes EPA to overfile when there is no danger to the public or the environment, but, when penalty amounts are not "high" enough. This misuse of overfiling authority has the inevitable result of discouraging the states from attempting innovative approaches to environmental problems.

I am not suggesting that the number of enforcement actions brought is meaningless, but, let's look at one of the "beans" that EPA counted as a success in Colorado last year. We have a very good school in our state called the Colorado School of Mines. A research institute on the School of Mines property did experiments on mining ore. A substantial amount of waste ore was generated, and, a waste pile was created. A break in a water main necessitated the emergency removal of the waste pile by EPA to another site. In the removal, a liner was laid down and the pile was put on top. The EPA ordered the State to permanently remove and dispose of the pile. The State removed the pile to a waste disposal facility.

The pile being gone, the State proceeded to build a softball field on the site upon which the pile was formerly located. In the process, workers breached the liner. Now, remember, the liner was constructed prevent water running through the waste pile from getting into the ground. But to there was no pile when the softball field was under construction. In other words, there was nothing to line. Nevertheless, EPA issued a notice of violation against the State for breaching a liner that lined nothing. Even though it admitted that there the breach caused no danger to the public or the environment, EPA ordered the State to repair the liner and to pay a civil penalty. The State ended up paying thousands of dollars for nothing, thousands of dollars that could have been spent removing real threats to the environment. Yet, this is used as an example of EPA's enforcement success. Something is wrong with this picture.

Federal Facilities

I cannot help but mention that EPA's fine sentiments about protecting the environment extend only to private parties, and, seemingly, not to the federal government. The Administration has recently released its Superfund Legislative Reform Principles. My understanding is that those principles were authored largely by EPA and released by that agency. Those principles contain several statements which evidence EPA's retreat on the issue of strong Superfund enforcement. Specifically, one of the statements is that the Administration opposes any changes to the present law on federal facilities. This means that the Administration opposes reforms necessary to ensure that the federal government obeys the law to the same extent as private parties, reforms such as stronger sovereign immunity waivers.

In addition, the principles abandon the Administration's support for strong provisions delegating the Superfund program to the states. There is general agreement that the states can often carry out cleanups in a more efficient and effective manner than EPA. We in Colorado fought for many years to apply our own laws at the Rocky Mountain Arsenal. Prior to our victory in our case against the Army, the United States contended that it could run the cleanup of this former nerve gas facility without any regard for state law, regardless of the environmental consequences or danger to our citizens. The EPA was largely silent in this battle. The EPA's principles ensure that they, and not the states, will be in control of federal facility cleanups. Yet again, the agency stands in the way of true environmental gains.


We would offer several suggestions that might improve the EPA-State relationship. First, we recognize that EPA is often caught between its legislative mandates and a desire to work with the states. The environmental laws must be reviewed with an eye toward changing those provisions that prevent EPA from allowing states to experiment by putting their own environmental programs into place. For example, the courts have interpreted the present Superfund law as not providing the states substantial authority to implement clean-up programs. We believe that it was the intention of Congress to create a floor for environmental protection in the statutes, and, then, to allow the states to accomplish the goals set out in the statutes in their own fashion. Perhaps a short-term task force or a commission could be created to review the present laws and recommend changes, if necessary, to implement this intention.

Second, there must be a review of the methods for measuring success in the environmental area. Until we have a legitimate and effective means of measuring success, and as long as we are wedded to the "number of enforcement actions" model, we will be unable to try new approaches that may well mean greater gains for fewer costs. We would recommend a study of this issue, perhaps starting with EPA's new performance measures, that will result in recommendations for changes to the present measurement methods.

Third, and specific to EPA, there needs to be greater Congressional oversight with regard to agency activities. For example, Congress, the states and the public should know the criteria for overfiling. At present, the authority to overfile is used as a weapon by EPA to extort changes in state laws and to manipulate the failure of audit laws. The agency should be required to set out clearly the criteria it will use for determining whether to overfile in particular cases. Perhaps it should be required to do so after a series of hearings or a formal rulemaking process.

Fourth, as to specific substantive areas, there should be federal legislation allowing states to experiment with self-audit legislation without EPA interference. We do not take a position at this time as to whether that legislation should include federal privilege and immunity provisions. At a minimum, however, it should say that EPA cannot revoke the delegation of states that have audit laws just because of those laws, and, that EPA cannot overfile in situations in which the states have given immunity under their own audit laws.

We would be happy to work with your staffs to implement these suggestions legislatively. Again, we appreciate the opportunity to submit these remarks to the Committee on this important issue.