Mr. ROISMAN. That is right. My judgment is that that could be done. I would think in the emergency case you might very well in effect be identical, that the court might if it were faced with a dual challenge by, say, an industry alleging that the permit violated the Administrative Procedure Act and violated the NEPA Act-that a court particularly one with Administrative Procedure Act savvy, like the U.S. Court of Appeals, District of Columbia Circuit, might very well see a parallel between procedural requirement in terms of judging the adequacy of what the agency gives as its reason for the action it took. Mr. DINGELL. Mr. Zener, you indicated you had some thoughts on this. Please stress your thoughts. Mr. ZENER. General administrative law that requires agencies to explain the basis for their decision goes back at least to the decision of the Supreme Court in Securities Exchange Commission v. Chenery Corp., decided in 1943. Agencies haven't been having any particular trouble with that. NEPA, however, has been causing, I am told, a lot of trouble. I think NEPA was intended to change the law and to do something more than simply make the Administrative Procedure Act more specific. Moreover, if you just look at environmental impact statements as they are written, they are considerably longer and more detailed and more complex than your average administrative opinion which is written to conform to the requirements of the Administrative Procedure Act. There is a tremendous order of magnitude in the difference. between those two. So as a practical matter it is much more difficult to comply with NEPA than the Administrative Procedure Act and the requirements of the Administrative Procedure Act are that a reasonable opinion be written explaining the basis of your action. Mr. ROISMAN. Mr. Chairman, one citation in rebuttal if I may on EPA and other agencies not having any problems under the Administrative Procedure Act. I mentioned the numerous decisions involving DDT which raised that issue. Mr. Nader raised it against the FAA in the District Court on the smoking ban on airlines. Congressman Moss v. CAB involving the CAB's rules setting rates in airplanes raised it. The New York Public Service Commission v. FPC in the court of appeals, District of Columbia Circuit Court raised it. The Greater Boston TV Corp. v. FCC in the U.S. Court of Appeals. District of Columbia raised it. All of those cases were cases in which the agency had not met its obligations under the Administrative Procedure Act by failure to give an adequate reason. It has been a very prevalent procedure used to upset agency decisions through the years. It started with Cherney and it isn't over, The problem I have had in cases in which we have brought those kind of challenges was I could never tell a court a firm standard that was to be applied. We were always sort of leaving it up to the judge to say to himself, is there enough here that I can make an intelligent décision. NEPA gives a more specific standard which means from the standpoint of an agency trying to make its actions and court challenge, it has a better chance of coming up with a defensible rationale from a procedural standpoint under NEPA than under the APA. I am not talking about whether it substantively stands. Those standards of review are extremely narrow in the Administrative Procedure Act. Mr. DINGELL. The Chair does have a question. Mr. Roisman, you have made generally some suggestions with regard to amendments of the bill. Your kindness in assisting the committee with the specific language is appreciated. Your comments with regard to the amendments suggested by Mr. Zwick are also very much appreciated, as would be your comments, Mr. Zener, if you please, on those so the committee may have them all carefully before it. The Chair does wish to inform you it would be appreciated if any of you would avail yourselves of the opportunity to make comments or suggestions after you have had a chance to review the transcript, and the Chair will see that the record remains open until at least after the House does reconvene about the 17th of July. (The following was received in response to the above:) Hon. JOHN D. DINGELL, ENVIRONMENTAL PROTECTION AGENCY, Chairman, Subcommittee on Fisheries and Wildlife Conservation, House of Representatives, Washington, D.C. DEAR MR. CHAIRMAN: During the hearings on H.R. 14103 held on June 30, 1972, you asked the EPA's comments on amendments proposed by Mr. David Zwick. We are working as quickly as possible to comply with your request. Office of Management and Budget Circular A-19 requires, however, that these comments (like all Agency comments on proposed legislation) be submitted to OMB for interagency review and clearance. When that process has been completed, we shall forward the information to you. Sincerely, GARY H. BAISE, Director, Office of Legislation. Mr. DINGELL. The Chair will recognize Mr. Potter. Mr. POTTER. One question which was precipitated by the second page of Mr. Zwick's statement. You were referring to the language in the House version of the water bill which says the Administrator shall take into account the economic structure and environmental impact of discharge. Are you familiar with the Davis Morton case? You probably wouldn't be unless you have been following NEPA very closely. It is a case in New Mexico where it was held that the Secretary of Interior did not have to comply with the NEPA Act in approving an Indian lease because among other things the statue which authorized the Secretary to review the lease required the Secretary to consider the environmental impact. And the court said that under those circumstances Congress was in effect saying that NEPA does not apply. This to me is a real risk. I am not just sure what we can do about it at this point, but I think it is something we have to watch very closely. I think it poses real hazards to the Environmental Policy Act. Mr. ZWICK. I would agree it poses real hazards, because if I can think of any case where NEPA ought to apply, it is certainly where that kind of thing is explicitly considered-what justification is there for then keeping it a secret. That is precisely when the public ought to be able to see it most openly stated exactly how the balance can be done. If, on the other hand, a legislative policy decides it makes sense to cut through the considerations of environmental impact for the reason that it takes time to study that, and we want to see something quickly, then, if anything, the justification is more strong for them not requiring the detailed statement of impact. But when all the work has been done-when you study and decide on the basis of environmental impact-it is really to my mind precisely the time when it makes the most sense to have a statement. Mr. DINGELL. Mr. Rountree. Mr. ROUNTREE. Assuming the Senate-House conferees on the water bill reach the conclusion that the authority for this particular program be vested in the States, during the period of time that we are still involved in an appeal of the Kalur decision, or a decision on that appeal, then to my mind, equating it with the comments of Congressman McCloskey on the question of mootness, the legislation would be moot because apparently-I may be wrong and if I am, correct me please the Kalur decision would have no applicability to a State program whatsoever. Is that correct? Mr. ZENER. Yes. Mr. ROUNTREE. If the States have the program, to what extent would the Kalur decision apply to EPA's oversight function on a Federal level for that State Refuse Act permit program? Mr. ZENER. I find that hard to say. We are really speculating about what the court of appeals will say, assuming it will aflirm the district court. I really can't answer that. Mr. ROUNTREE. So we are faced, it seems to me, with the situation that if the House conferees prevail, if a Senate-House conference decided the program should be vested on the State level with Federal oversight, there does not exist any need for enactment of this legislation at that point in time because it does not go to the Federal agency requirements under the Kalur decision. Mr. ZENER. That is correct, with one very important modification, and that is that both under the House and Senate versions there is a period of time during which Federal permits would be issued. And with this amendment quite a number of Federal permits could be issued during that time. Without the amendment in preparing the Federal impact statements, there might be very few, if any, permits issued during the period of time before the program gets delegated to the States. Mr. ROUNTREE. So the rationale would be upon enactment of H.R. 14103 you would have substantially more permits issued on a Federal basis than you would have on a State basis, and from a policy standpoint EPA's opinion is that this is desirable? Mr. ZENER. Yes. Mr. ROUNTREE. I assume that there is a concern on the part of EPA that perhaps these permits which may be issued on a State level would not be more protective of the environment than if they were issued on a Federal level! Mr. ZENER. No, I wouldn't say that. I would say that we would like the opportunity to issue a number of Federal permits during the interim period before the program gets taken over by the States, if that should be the way the legislation is written. Mr. DINGELL. That is a matter of great interest and would be one with which this committee has a great deal of sympathy. There are very strong moving factors in consideration of H.R. 14103. Mr. ZwICK. It is a matter in which I also have a great deal of interest. I hope that some way can be found to avoid the possibility, No. 1, of course, that the whole water pollution program will be sent back to the States as it was in 1948. But No. 2, that NEPA will not be amended by the back door in effect by programs which previously were implemented by a Federal permit and we start seeing a trend toward amending NEPA, something like you suggested to Mr. Roisman is happening in many other quarters by taking things out of the Federal purview or by many other ways in which that can be done. If we can come up with a way to solve that problem in this committee, I certainly hope that this is the route that follows: Just one comment in response to Mr. Potter's question about the Davis-Morton decision. It occurs to me that the language such as that in the change which I suggested to 14103 might very well be evidence that the congressional mood has changed on that particular point. Mr. DINGELL. Gentlemen, the committee is grateful to all three of you. Mr. Zener, I hope you don't have the impression that we set you up here. We kind of had you like Daniel in the lion's den. The Chair will see the record is kept open until about the time Congress reconvenes and hopes all of you gentlemen will avail yourself of the opportunity to give us additional comments that you deem appropriate. (The documents follow :) Hon. JOHN D. DINGELL, ENVIRONMENTAL PROTECTION AGENCY, House of Representatives, Washington, D.C. Hon. THOMAS M. PELLY, Washington, D.C. DEAR MR. DINGELL AND MR. PELLY: I expect you are familiar with the fact that the Third Circuit Court of Appeals recently ruled that a company cannot be prosecuted for violation of the Refuse Act of 1899 in the absence of a permit program under which a permit could be available to it. This decision raises the prospect of a severe handcuffing of enforcement efforts by the Environmental Protection Agency to clean up water pollution through use of the Refuse Act. The Third Circuit case involved a discharge prior to establishment of the Refuse Act Permit Program on December 23, 1970. Thus, it is not clear whether the Court would reach the same result in a current case where a permit program has been established but is inoperative due to the Kalur injunction. It also is unclear whether this decision which involved a criminal prosecution would be followed in a civil case involving a petition for injunction relief. We have asked the Justice Department to seek a rehearing in this case and we will argue both in that rehearing and in all other cases that the Refuse Act should not be interpreted in this restrictive manner. We must regard this decision, however, as a serious indication that our present reliance on Refuse Act suits may soon be cut short. This development greatly intensifies my concern over the Kalur decision which ruled that no permits may be issued until the Permit Program regulations are amended to provide for the preparation and issuance of environmental impact statements. In my recent testimony before your Committee supporting your bill, H.R. 14103, to exempt the Permit Program from that requirement on a restricted temporary basis, I emphasized that a delay of several years would be involved in our permit issuance process if this Agency or the Corps of Engineers were required to prepare environmental impact statements for each major discharge. 82-302-72- -16 We have continued to explore the possibilities of meeting the environmental impact statement requirement through application of imaginative administrative flexibility, as you and others have suggested. On the basis of further analysis, I remain convinced that there is no way we could accomplish this except at the price of severe damage to the national pollution control effort. One further concern which I addressed in my testimony before your Committee was that the environmental impact statement requirement would be utilized by industry as a mechanism to oppose our regulatory efforts. As I pointed out, of the several thousand cases where we presumably would be required to prepare such statements, in only a small minority would the environmentalists be able to review those statements and use them in asserting the need for environmental protection; whereas, in every case the industry in question would undoubtedly be able to take advantage of any deficiencies in the statement to oppose imposition of stiff abatement requirements. The growing indications that industry is beginning to see opportunities to use environmental impact statements to its advantage are illustrated by three letters which we recently received. Copies of these letters are enclosed for your information. They are letters on behalf of electric utility companies asserting that this Agency should not take action upon State Implementation Plans submitted under the Clean Air Act until environmental impact statements have been prepared setting forth a cost-benefit analysis and other pertinent factors. I am enclosing for your information a copy of my recent letter to Mr. Kent Frizzell, Assistant Attorney General, requesting that the Justice Department seek a rehearing of the Third Circuit decision and also requesting that it seek an expedited appeal of the Kalur decision. I am also enclosing copies of newspaper articles on this matter which appeared recently in the Washington Post and the Wall Street Journal. Under these circumstances, there is sharply increased urgency in our need for legislation to exempt the Permit Program from the environmental impact statement requirements. It is more and more apparent that these impact statement requirements are a millstone around our neck, holding us back from vigorous efforts to combat water pollution. I hope that you will do all you can to advance favorable consideration of your bill to achieve this purpose. Sincerely yours, JOHN R. QUARLES, Jr., Assistant Administrator for Enforcement and General Counsel. Mr. WILLIAM D. RUCKELSHAUS, LAW OFFICES, Administrator, Environmental Protection Agency, DEAR MR. RUCKELSHAUS: I am counsel for Pennsylvania Electric Association, and write this letter on behalf of the following eight Pennsylvania electric utility members which own coal-fired steam generating stations within the Commonwealth: Duquesne Light Co.; Metropolitan Edison Co.; Pennsylvania Electric Co.; Pennsylvania Power Co.; Pennsylvania Power & Light Co.; Philadelphia Electric Co.; UGI Corp. ; and West Penn Power Co. I am also authorized to submit this letter on behalf of the following seven electric utilities which serve the public in other States, but which are tenants in common of coal-fired steam generating stations within the Commonwealth: Atlantic City Electric Co.; Baltimore Gas & Electric Co.; Delmarva Power & Light Co.; Jersey Central Power & Light Co.; New York State Electric and Gas Corp. ; Potomac Electric Power Co.; and Public Service Electric and Gas Co. There is currently pending before your Agency the Implementation Plan of the Environmental Quality Board of the Pennsylvania Department of Environmental Resources under the Clean Air Act, as amended. That Implementation Plan imposes various limitations on emissions from stationary power sources. It is the view of the utilities listed above that under present technology not all of these limitations can be observed reliably and consistently, that the by-products resulting from an attempt to apply present technology to reduce such emissions to the required levels have consequences that may be more adverse to the public interest than those resulting from emissions greater than those permitted by the |