Gentlemen, I believe it might be well and more fair to you if we were to hear the three of you together; and if that meets with your approval, we would be most pleased to have you appear at the witness table together with such of your associates as you might deem necessary and appropriate to have with you. Then after you have made your comments and submitted your statement to the committee, perhaps then we might direct questions to you and you might answer the questions as you deem appropriate. Does this meet with your approval? Mr. QUARLES. That is fine. Mr. DINGELL. We are pleased to have you with us. If you have anyone you would like to have at the witness table, if you would like to identify them by name, feel very free to do so at this time or at such subsequent time as you deem appropriate. STATEMENT OF JOHN QUARLES, ASSISTANT ADMINISTRATOR FOR ENFORCEMENT AND GENERAL COUNSEL, ENVIRONMENTAL PROTECTION AGENCY, ACCOMPANIED BY COL. JOHN H. COUSINS, ASSISTANT CHIEF, OPERATIONS, CORPS OF ENGINEERS; TIMOTHY ATKESON, GENERAL COUNSEL, COUNCIL ON ENVIRONMENTAL QUALITY; AND ROBERT ZENER, ASSOCIATE GENERAL COUNSEL, EPA Mr. QUARLES. Thank you, Mr. Chairman. I will proceed first and then Mr. Atkeson will proceed and then Col. Cousins will deliver his opening comments. Mr. DINGELL. Mr. Quarles, we are happy to welcome you and to have the chance to hear your counsel and advice. Mr. QUARLES. Thank you. I am accompanied this morning by Robert Zener, who is Associate General Counsel of the Environmental Protection Agency, sitting behind me. Mr. Chairman and members of the committee, I am pleased to have this opportunity to present the views of the Environmental Protection Agency on H.R. 14103, legislation concerning the application of the National Environmental Policy Act of 1969 to the Refuse Act permit program. This legislation addresses a problem which is of central importance to EPA. As you recall, I briefly discussed the need for legislative relief in this area when I appeared before this committee in support of H.R. 13752, relating to interim licenses for nuclear powerplants. Shortly thereafter, the chairman of this committee introduced the bill which is under consideration today, addressing the issues which were raised at that time. I would like briefly to reemphasize several important points and to discuss specifically the application of H.R. 14103 to the problem as I see it. At the time EPA was established, it appeared that our programs fell into two groups according to the categories set forth in CEQ's guidelines on Federal agency responsibilities under NEPA. Under the guidelines, EPA. as an environmental regulatory agency, was not responsible for preparing impact statements for its environmental reg ulatory activities, but was required to prepare them for its other activities. Under Exectuive Order 11574, directing the establishment of a water quality permit program, EPA is responsible for advising the Corps of Engineers concerning the relation between discharges subject to permits and water quality standards and related considerations. We have considered that our actions under this order were environmental regulatory actions and that impact statements were not required by NEPA in connection with such actions. However, in the recent case of Kalur and Large v. Resor, Ruckelshaus, and Clarke, the District Court for the District of Columbia held that NEPA required the preparation of impact statements in connection with the issuance of Refuse Act permits. The court also enjoined the Corps of Engineers from issuing permits for discharges into navigable waters until such time as the Corps amended its regulations to require impact statements under NEPA. The Department of Justice is appealing that decision, but we do not expect the case to be heard and decided by the court of appeals at least until the fall. In the meantime, no permits can be issued under the program unless the regulations are amended to require environmental impact statements. The Kalur decision stopped the permit program at a time when it was on the verge of producing substantial results after nearly a year of startup work. In our startup period, we assembled a staff of some 360 people, primarily in the regional offices, to handle the approximately 20,000 applications that were received. While this flood of applications at first overwhelmed us, the staff has now completed a preliminary review of most of the applications. Although it is illegal under the law to discharge from an industrial point source without a permit, we feel we cannot shut down every water using industry in the United States. We can, however, achieve effective control over industrial pollution by issuing permits with specified conditions so that the discharger will know precisely the requirements he must meet. Each permit will be designed to put the discharger on a pollution abatement schedule. Every day of delay in issuing permits is a day of delay in initiating pollution abatement. The question naturally arises as to whether we could simply accept the Kur decision, prepare impact statements for every permit that is major for NFPA purposes and got on with the program. I personally do not believe that this is a feasible alternative. The permit program is presently faced with a backlog of some 20,000 permit applications. Although no one can state with certainty how many of these are major so as to require impact statements- and we certainly have not meant to imply that impact statements would be rooped for all of them -our best estimate is that a substantial portion of the permits would require impact statements. To date, the impact statements that FPA has prepared on waste treatment plants have nxt "vd approximately half a run-var ea i. To extend anywhere near this type of effort on any substantial portion of thein, 60 rending pop & ani-lications won't resn't in scions delays, inconsistent with the ear neessity for rapid and e festive what wont of water pollution. H.R. 148 nenosents a robo and "imited measure to deal with the permit program's problem. Te bill would suspend NFPA's pro cedural requirements only for permits issued prior to December 31, 1975-a period of time that should be sufficient to clear up the bulk or all of the existing backlog of permit applications. In the meantime, the bill would have no application to plants on which construction commenced after April 1, 1972. Thus industrial planning for new plants must take into account the possibility that a permit application on behalf of the new plant must face an NEPA review. And finally, no permit issued under this bill can remain in effect past December 31, 1977, unless it is in compliance with NEPA, assuming NEPA otherwise applies-thus insuring that the effect of this bill will be temporary. I think I might add this statement so we will all be clear on it: everyone who has worked on this bill is in agreement that its intent. is to deal with the existing backlog of permit applications on a oneround basis. The broad purposes of NEPA will not be compromised by this limited suspension. The permit program contains many safeguards designed to insure that the permit is a vehicle for the improvement, rather than the degradation, of the environment. Applicants for a permit are required to obtain a certification from their State that the discharge will not violate water quality standards. All permits are conditioned upon compliance with water quality standards, including any standards that are upgraded during the term of the permit. Where water quality standards are inadequate, more stringent conditions are imposed. There are special restrictions on the discharge of oil and hazardous and toxic substances. Every permit holder is required to periodically monitor his discharge to assure that he is in compliance with the terms of the permit and, in significant cases, the permitholder must monitor the impact of this discharge on the aquatic environment. In addition, EPA intends to require every permit holder to come up to certain defined levels of industrial treatment, regardless of the quality of the particular body of water involved. As a procedural matter, the permit program offers ample opportunity for public participation. Public notice must be given of every permit application. Under the regulations published in the Federal Register governing this program, in all cases public comments are solicited and taken into account in the administrative decision. Where substantial public interest is displayed, public hearings will be held. Citizens dissatisfied with the terms of the permit may obtain judicial review in the Federal courts. H.R. 14103 would also cover the new permit program which would be administered by EPA under section 402 of both the Senate and House water bills. Those bills also contain numerous safeguards to assure protection of the environment and public participation. Every permit must be conditioned on compliance with applicable effluent limitations and performance standards, including standards for toxic substances. In general, existing industrial dischargers will be required to adopt. the best practicable control technology while new dischargers will be required to adopt a higher level of treatment. EPA is required to guarantee effective citizen participation in the permit issuance process. Public notice is required for every application, and, in addition, an opportunity for a public hearing is required for every application. Finally, EPA's action in issuing or denying a permit is subject to judicial review in the Federal courts. In summary, we intend to scrutinize each permit application for compliance with water quality standards, and to develop stringent conditions to insure that the permit is a tool for the enhancement of the quality of the environment and not a license to pollute. There is absolutely no question in my mind-and this I hope will come up again and again this morning and will be clear to everyonethat the permits which are being developed and which we hope to issue as rapidly as possible are going to impose more stringent requirements for the water pollution control than those presently in effect and that speed in issuing those permits will enhance achievement of our environmental objectives. Therefore, H.R. 14103 will enable us to be more effective in accomplishing our responsibilities to deal with industrial pollution. Mr. Chairman, the National Environmental Policy Act is one of the most important statutory authorities available to us in our program for a better environment. We share your concern that NEPA must be protected from weakening amendments and that the bill before you today not served as a precedent for further amendments to NEPA. Our support of H.R. 14103 today should not be interpreted as a precedent for such amendments. We believe that the situation to which H.R. 14103 provides a solution is a unique one. The permit program is a pollution abatement program. While NEPA clearly contemplated some delays in developmental programs to assess their environmental impact, it would be inconsistent with the spirit of NEPA, and indeed quite an irony, and also inconsistent with the guidelines promulgated by the Council on Environmental Quality, for NEPA's procedural requirements to be allowed to cause major delays in this important program designed to clean up the environment. We do not mean by our support of this bill to indicate that, under a proper interpretation of NEPA, our regulatory activities would be covered. We continue to believe that the exemption provided by the CEQ guidelines for these activities expresses the original intent of Congress. As I indicated earlier, the Government is appealing the Kalur decision and we are hopeful that the courts will ultimately confirm this interpretation of the scope and effect of the National Environmental Policy Act. In endorsing this bill-and indeed in actively urging that it be passed as soon as possible-we are anxious to assure more rapid implementation of the permit program than might be possible through judicial appeal and we also are anxious to eliminate any uncertainty concerning the application of NEPA to the permit program. Mr. Chairman, this concludes my prepared statement. I might only add in closing the prepared statement that we are appreciative of the cooperation we have received from you in trying to address these serious problems, in trying to develop a bill that deals with them in a responsible manner and in obtaining quick attention from Congress so these problems can be faced by those responsible for perhaps acting upon them. I thank you. Mr. DINGELL, The Chair would like to express very high regards for the able and fine way in which you have carried out your responsibilities through EPA. We thank you for your very helpful testimony. Mr. Atkeson or Colonel Cousins. Mr. ATKESON. Mr. Chairman, I appreciate this opportunity to appear before you to state the Council's support for H.R. 14103, the bill you and Representative Pelly have introduced to deal with the application of section 102 (2) (C) of the National Environmental Policy Act-NEPA-to discharge permits issued under the Refuse Act permit program or the pending Water Pollution Control Act amendments. This amendment to NEPA-which is a transitional provision to give time to work out the application of the impact statement requirement to water quality permits is a carefully balanced response to the decision in the Kalur case (Kalur v. Resor, 335 F. Supp. 1; D.D.C. 1971). You have already introduced Administrator Ruckelshaus' request for this legislation into the Congressional Record for March 30, and have attached a copy of that letter to my statement. Mr. DINGELL. I think it might be helpful for that to be inserted in the record at this point. Without objection, it is so ordered. (The information follows:) [From the Congressional Record, Mar. 30, 1972] NATIONAL ENVIRONMENTAL POLICY ACT OF 1969 Mr. DINGELL. Mr. Speaker, Congressman Pelly and I have introduced H.R. 14103 to amend the National Environmental Policy Act of 1969 to provide a temporary partial exemption from the requirements for the issuance of environmental impact statements. This legislation was drafted to meet a temporary problem which has arisen with regard to the issuance of Refuse Act permits. I am in receipt of a letter under date of March 27, 1972, from Administrator Ruckelshaus of the Environmental Protection Agency relating to this matter which I would like to share with my colleagues. Therefore, I insert the text of the Administrator's letter at this point in the Record: ENVIRONMENTAL PROTECTION AGENCY, Hon. JOHN D. DINGELL, We believe that it is vital to issue permits under the Refuse Act as quickly as we are able to perform a thorough evaluation of each application. Although under the law a discharge from an industrial point source without a permit is illegal, we cannot shut down every water-using industry in the United States. Instead, we must issue permits with specified conditions so that the discharger will know precisely the requirements he must meet. Every day of delay in issuing permits means further delay in attaining effective control over discharges subject to the Refuse Act. From our examination of the administrative requirements of preparing impact statements in connection with the backlog of permits which we are now |