UNITED STATES OF AMERICA PRIVATE  

+ + + + +

ENVIRONMENTAL PROTECTION AGENCY

+ + + + +

ENHANCING ENVIRONMENTAL OUTCOMES FROM AUDIT POLICY DISCLOSURES THROUGH
TAILORED INCENTIVES FOR NEW OWNERS

+ + + + +

SUBMISSION OF ORAL COMMENTS

+ + + + +

TUESDAY, JUNE 12, 2007

+ + + + +

	The meeting came to order at 10:00 a.m. in Salon G of the J.W. Marriot
Hotel, 1331 Pennsylvania Ave, NW, Washington, DC 20004.  Mark Ewen,
Facilitator, Presiding.

PRESENT:

MARK EWEN, Industrial Economics

GAIL COAD, Industrial Economics

WALKER B. SMITH, EPA

SUSAN O'KEEFE, EPA

CAROLINE MAKEPEACE, 	EPA

JONATHAN LIBBER, EPA

PHILIP MILTON, EPA

PRESENTER:

ANDREW COOPER, ESQ.DICKSTEIN SHAPIRO, LLP

	P-R-O-C-E-E-D-I-N-G-S

11:46 a.m.

		MR. EWEN:  Okay.  Let's get started again here.  And just to talk
through some of the details of the submittal of public comments here. 
First off, the agenda indicates a break from noon to one.  And I think,
given the fact that probably some or many of you have made lunch plans
based on that agenda, we are likely to break right around 12.  But let's
just see how things go here.  Fourteen of you have grabbed a card to get
in line to give your comments.  And let's just see how that proceeds.  I
don't want to constrain, in any way, anyone's ability or opportunity to
submit a comment.  

		A couple of things here, just to remind you, there is a stenographer
here.  We'll open the record.  It will be an official transcript created
of your comments.  That transcript will be submitted or entered in to
the docket for this overall proceeding.  And EPA will use those
comments, review and consider them, as they consider next steps for this
whole policy proposal.  As you are giving your comments, we have, just
to maintain or ensure a clear concise transcript for purposes of EPA's
review, we are holding out the prospect of the EPA Panel here.  Perhaps
asking you a simple or basic clarifying question or two, based on your
comment.  But we don't expect any significant back and forth.  Just a
few clarifying questions perhaps here or there.  Step to the microphone
there.  It's a pretty good microphone system.  You don't have to get up
close to the mic.  Just six inches or so.  And you can stand normally
and talk in to the mic.  And your comments will be recorded by the
stenographer.

		For those of you, well, when you step to the podium, provide your
name, please and spell it for purposes of the record.  And provide your
affiliation.  For those of you who are interested in staying involved
with this process over time and are interested in being on the contact
list for any outreach that EPA may engage in going forward, make sure
that your name, and email, and number, phone number, and things are
entered on the sheet outside the room, that you probably have already
signed before you came in.  But make sure your contact information is
there, if you want to continue to participate in this process and
receive any communications that EPA might send out regarding this policy
process.  

		So the order of commentors, you have, obviously EPA thinks of you as
much more than your numbers, but we've given you a number.  And we'll
proceed in that order.  This general admonitions apply.  Please speak
loudly and clearly.  And as a starting point, we don't have too many
commentors, but I'm going to, I'm going to set a rough time limit of
about ten minutes.  And we'll see how well that works for everyone.  But
think about, kind of a rough time limit of ten minutes, to get started. 


		And I think from my end that's about it.  Is there any other details
from the Panel or any questions before we get started?

		(No audible response.)

		Okay.  So if number 1 is ready to go, and I'll just -- if number 1 has
left, I'll keep going through the numbers.  But if the person with the
first card is ready you can proceed to the podium with your comment. 
Okay.  Number 2.  Or 3.  Can I hear 4?  Okay.  5.  6.  7.  8.  9.  10. 
Does anyone intend to submit?  Oh, do we have 11?  Oh, good.  He was
moving.  

		PARTICIPANT:  It sounds like an auction.

		MR. EWEN:  10.  11.  Okay.  Very good.  Excellent.

		MR. COOPER:  I didn't expect to go first as number 11 --

		MR. EWEN:  Right.

		MR. COOPER:  -- but I'll take it.

		MR. EWEN:  Just again your name --

		MR. COOPER:  Yes.

		MR. EWEN:  -- and spell it for the stenographer.

		MR. COOPER:  Sure.  My name is Andrew Cooper.  A-N-D-R-E-W. 
C-O-O-P-E-R.  And I'm with the law firm of Dickstein Shapiro.  And I
just wanted to reiterate a few of the comments that came up in the
discussion before the public comment session.  

		The first is, I wanted to express some concern that a seller, under
this scenario, could require non-disclosure.  And could require
indemnification by the buyer for any penalties that are disclosed.  And
we could be in a situation where, essentially, if the seller has
potential liability for the disclosure, the seller could undermine that
through contractual provisions and essentially create a situation where
the buyer would be hard pressed to use this policy.  

		The second is, pretty much, my second comment is pretty much in the
same vein with the first.  To express some concern about an enquiry in
to purchase price reductions or indemnifications, as consideration in
the policy, simply because, again, that should be something negotiated
between the seller and buyer.  And if we're in a position where that's
looked in to and that has an impact on the use of the policy, then we
could be, again, put in a position where the seller essentially could
undermine the policy or even the buyer could unfairly leverage the
policy in such a way, recognizing that EPA is going to look in to the
specifics of the contractual documentation.  

		Finally, a point that I raised in earlier discussion.  Wanted to
caution you about finding a trigger point from which the clock begins to
run, in terms of recognizing that, of course, the buyer can't take any
kind of action until the buyer is in control.  Until the buyer has
closed on the deal.  And furthermore, even then, it could say, take some
time because it would be difficult, in some instances, certainly in my
experience, to immediately take action after, following closing. There
are, of course, all the non-environmental issues that have to be
resolved.  And as control is taken, that can all take some time.  

		I think those were my only comments.  But I'm just taking a quick
look.  I think those -- that's it for my oral comments.  But I'm sure
we'll be submitting written comments as well.  And thank you very much
for the opportunity.  

		MS. O'KEEFE:  I have a question.

		MR. COOPER:  Of course.

		MS. O'KEEFE:  And a request.  

		A question.  I wanted to better understand what you meant when you
said, if we examine the existence of an indemnity agreement.  And go
into the purchase price.  And whether there was, I guess, any
consideration of environmental liabilities.  You talked about the buyer
leveraging that.  If you could say a little bit more about that.

		MR. COOPER:  Sure.  Well, what I'm thinking is, that the buyer could
be in a position to say, "Well we aren't worried.  We're going to be
protected.  And we're going to use that policy in such a way, seller,
that if you don't give us what we want, we'll make the disclosure. 
You'll be liable.  And therefore, what do you say we put, I don't know
what, some kind of provision in the contractual documentation.  And in
return for that, we won't make the disclosure."  So either party,
essentially, in different, under different circumstances, if there's an
understanding that EPA is going to look at the contractual documentation
and if there's an understanding that effectively all of this is opened
up, either party could take advantage of that --

		MS. O'KEEFE:  Yes.

		MR. COOPER:  -- in what I think we'd probably consider a way that's
against public policy.  But would be in the parties best interest to get
the best possible deal.

		MS. O'KEEFE:  Yes.

		MR. COOPER:  And so you can't really tell the party that they can't do
that, if you given them the tool to do that.  And again, that's, whether
you're talking about a buyer or a seller.  Either, could leverage the
policy, if they know that you're going to be looking in to the
documentation.  Or if they know that, for instance, the seller becomes
liable for all the penalties after the transaction.  So that's, I guess,
in a nutshell.  Kind of a big nutshell.  But in a nutshell, that's what
I meant.

		MS. O'KEEFE:  That's helpful.  

		And a request.  

		MR. COOPER:  Oh.

		MS. O'KEEFE:  You cautioned against developing a  trigger point.  That
was your word, your phrase.

		MR. COOPER:  Yes.

		MS. O'KEEFE:  And I guess what -- it would be helpful to us, if you
could give us a sense of what you think would make sense in defining,
how new does an owner have to be?  You know, what's the window of
opportunity, if we go forward with the program, that makes sense?  So
that we can drive compliance to happen as quickly as possible while
giving a new owner the opportunity to get their feet wet and fully
settled when they're, maybe looking at a lot of other issues.  And will
be looking at a lot of other issues besides environmental ones.  

		MR. COOPER:  Okay.  I'm making a note of that for our written, for our
submission of written comments.  But -- and I would expect written
comments would be a little more, our written comments would be a bit
more expansive.  But I just figured since we got to 11 so quickly, I
would provide my oral comments while given the opportunity.

		Thank you very much.

		MS. O'KEEFE:  Thank you.  Thank you very much.

		MR. EWEN:  And I think as a general notion, EPA would encourage any,
obviously, any follow-up written comments that you have to your oral
comments here today.

		It struck me that, for purposes of the record, I should probably just
get on the record, that this is the public hearing or Public Meeting for
the Enhancing Environmental Outcomes From Audit Policy Disclosures
Through Tailored Incentives for New Owners.  And the date is June 12th,
2007.  

		And we are on to commentor number 12.  Or 13.  Or 14.  Or anyone else
who is interested in standing before us and providing oral comment
today.  Okay.  Seeing no hands, is there anything else from the EPA
folks that we should get on the transcript here for purposes of a clear
record?

		PARTICIPANT:  I'd just say probably one thing.  And that is sort of
like picking up what Mr. Cooper was, was sort of getting at.  And that
is, we're interested in very practical kinds of issues.  If we're going
to go with the sort of making a Pilot Program, I want to make sure the
thing really works.  Doesn't create a bunch of perverse incentives.  So
think in terms of, you know, what would make it work?  What might go
wrong?  So we can a full airing of the issues.  If those of you,
preparing written comments.

		MS. O'KEEFE:  Well before we break for lunch, I want to thank everyone
in the room for having come.  And you're welcome to return this
afternoon.  We are going to be here from 1 until 4.  It is a Public
Meeting.  And anyone who can come, can come in and make a remark.  So if
you decide you want to come back this afternoon, after lunch, and put
comments on the record, we would be delighted to see you.  

		And I really appreciated the frank questions and exchange.  That was
very helpful this morning.  I know we all, we all got a lot out of it. 
And I hope you did.  And we appreciate the time you've taken to sit and
listen to others, and ask your questions, and give us your thoughts.  

		So hope to see you this afternoon, some of you.  And thank you again. 
And we look forward to receiving any written comments you may submit
later on, as well.  

		MR. EWEN:  Thank you.

		MS. O'KEEFE:  Off the record?

		MR. EWEN:  Yes.  Off the record.  

		(Whereupon, the foregoing matter

		was concluded at 11:59 a.m.)

 

 

	NEAL R. GROSS

	COURT REPORTERS AND TRANSCRIBERS

	1323 RHODE ISLAND AVE., N.W.

(202) 234-4433	WASHINGTON, D.C.  20005-3701	www.nealrgross.com

	 page \* arabic 9 

