The recently enacted farm bill, Public Law 95-113, includes provisions to expand indemnity payments for dairy products contaminated by nuclear radiation or fallout and residues of chemicals or toxic substances in cases in which no other legal recourse is available.

The beekeeper indemnity program paid $3.7 million in 1976 to farmers who lost bees due to chemical pesticides. Incidentally, the farm bill extended this program too.

And, in 1944, Congress gave the Secretary of Agriculture specific authority to make indemnity payments for animals destroyed for disease control. However, this law is inapplicable in cases of chemical contamination as it applies only to organic diseases.

Unfortunately, these laws-while they are instructive as precedents-do little to help those who suffer from the PBB tragedy in Michigan.

I believe the bill passed by the Senate represents a fair, responsible, and responsive approach to a most serious and growing problem-how our Government can best protect our citizens from the hazardous chemical accidents which are increasingly inevitable in a society increasingly reliant upon chemical substances.

Therefore, Mr. Chairman, I strongly urge the members of this subcommittee and the members of the full committee and the House to act favorably on legislation along the lines of S. 1531. Mr. Chairman, I might just add that Senator Riegle and I conducted a series of hearings in Michigan on the PBB tragedy. And after listening carefully to the testimony of the representatives of the Food and Drug Administration, the State department of agriculture, and other agency spokesmen in both the Federal and the State Governments, the one thing that came through loud and clear I think to both of us was that in an area like this where you have both Federal and State regulation, the Food and Drug Administration, for example, on the one hand and the State regulation on the other, where chemical substances almost inevitably pass State lines, that there is a desperate need for some cooperation and some kind of coordinated approach and program to deal with this matter of chemical accidents.

Too often the State will look to the Federal Government, and not inappropriately because after all, the Food and Drug Administration has a great deal of authority and oftentimes issues orders. And it isn't surprising that the States in some situations are not quite sure what to do. And the PBB situation it seems to me ought to sound an alarm as far as the country is concerned in general, and make sure that we don't have anything like that happen anywhere else, Mr. Chairman, without being ready in advance and without having a clear delineation of what the State responsibilities are and what the Federal responsibilities are and how we are going to deal with the innocent victims of a situation such as this.

Now, I don't, you know, I don't say that the bill that I have introduced is perfect or has all the answers for this problem at all. I do recommend it as a very important starting point; one that would be good to try because it is limited both in terms of its duration and in terms of the amount of money that it would obligate the Federal Government for.

And I think, as Congressman Brodhead has said, it would be an important and needed step in the direction of a more comprehensive reasoned program, that would involve both the Federal and the State Governments in the intelligent handling and prompt dealing with a chemical disaster.

No one knows what it is like until it happens in your area. I can say that.

Mr. ECKHARDT. Senator, as you know, we have sometimes been called upon at the Federal level to compensate persons having in stock certain chemicals and pesticides that have been determined to be dangerous. I think you cite that in your testimony. It has always worried me a little that we may be a bit too hasty to underwrite activity which turns out to be dangerous. When we discover that the activities are dangerous, we prohibit them, but then we pay the people who ought to have known more about their dangers than we do. That matter concerns me and I wondered if you might join in that concern?

Senator GRIFFIN. Well, when you say pay people who ought to have known more, I am not quite sure what the chairman is referring to. I don't think he is referring to the innocent farmers, for example, who fed this contaminated feed to their livestock or he isn't referring to the consumer who bought milk from the store

Mr. ECKHARDT. I am not, no. I am referring to a manufacturer of a chemical, say a pesticide, which has been banned. We are called upon to reimburse them at times, as I recall.

Senator GRIFFIN. Well, I have no grief for the manufacturer in that particular situation and my bill is not directed to provide relief for the manufacturer.

I could conceive of situations where the Federal Government might have some responsibility but it certainly doesn't relate to this situation: I think one of the most important things about this bill that we are urging the committee to consider is that we don't relieve the manufacturer of any responsibility in this bill. And while we talk in terms of allegations, there is a chemical company who is being sued and thousands of claims are filed against that company. And as Congressman Brodhead has said, the trial is going on.

It would be the thinking here that the State would be subrogated to any claims that it went ahead and paid; and that the State would pursue and proceed with action against the company that is responsible, and recover; and that the Federal Government would be entitled to a proportionate share of the recovery.

Mr. ECKHARDT. Yes, I think that is provided in the bill on page 3: "That the Administrator will take all steps necessary to assure that the applicant is subrogated to the right of the recipients in the disbursement of the payments paid by such applicant for assistance or indemnity et cetera.

* * *""

So I suppose what you intend by this bill-and I think will very likely accomplish it-is to provide certain indemnification for the injured party but not affect the liability of the party who caused the injury.

Senator GRIFFIN. That is correct.

Mr. ECKHARDT. However, the injured party is relieved and relieved quickly, and that of course is a part of the necessity for the legislation.

The only question I am raising, as a practical matter, is to what extent this will practically relieve the manufacturer, if a State is not very diligent, to make its claims? It only has a 25-percent stake in the claim anyway. The Federal Government would have a 75 percent stake. In some instances the State might be influenced by the political situation in the State. The company might be one of its large employers, a manufacturer for instance. And since the Federal Government is going to pay 75 percent of the uncompensated claims, why, the Governor might-well, I will think of some fictitious name, Governor Milkpot might decide that it would be better to get a political contribution from the Acme Chemical Co. next time, let the Federal Government pay 75 percent of its claims, and not raise the question.

Senator GRIFFIN. Well, the chairman has put his finger on a horror story that would certainly undermine the purpose and intent of the legislation. However, it seems to me that if the EPA were doing its job, after all, it passes on the application of a State that has made these payments and is seeking 75-percent reimbursement from the Federal Government, but if the EPA does its job, they have no difficulty in contriving and manufacturing all sorts of regulations and requirements in other areas and I would think in this area that would certainly pin the State down in a very hard way to be sure that there would be a followthrough. And I think if that would be a matter of concern to the chairman and the members of the committee, that it might be strengthened in other ways; that particular provision.

I wouldn't be opposed maybe for the Federal Government participating in the recovery process.

Mr. ECKHARDT. Well, that is what I was thinking. I don't see why the Federal Government shouldn't be subrogated to its part of the claim directly.

Senator GRIFFIN. That might be a desirable improvement in the bill.

I wouldn't oppose it.

Mr. ECKHARDT. Of course there still remains the problem of whether or not persons in Government will be as diligent to press their claims where the parties are injured, as the parties would themselves. It is something like a situation with insurance: If a person has his automobile repaired by his insurance company, he will lose his interest in any further litigation. What I am wondering is, if we might in a secondary way be relieving pressures from the real causers of the damage?

Senator GRIFFIN. Well, to the extent that there is a valid concern there—and I don't deny it all together-I think you have to weigh it against the hardship and the difficulty of the average farmer who loses his herd and suddenly is destitute and faces bankruptcy and long-term difficulties while he is trying to get his lawyer or somebody to prosecute a claim that may drag out for 2 or 3 years. I think having observed the situation in Michigan, that it comes down as far as I am concerned in balancing those things, on the side of providing some quick and meaningful relief to these people

who have suddenly been the victims, been the innocent victims in this tragic situation.

It is altogether possible I suppose that it could be a more limited kind of relief or something so that they would continue to have an interest in the litigation. That is another way of approaching it. But I think that I would like to see this approach of the Senate bill tried and have some experience with it. And then if it doesn't work, it seems to me that amendments could correct the kind of concerns that the chairman has, would be most appropriate.

Mr. ECKHARDT. Well, thank you very much, Senator. I know you have an appointment just about now.

Senator GRIFFIN. Well, thank you very much for taking me out of order.

Mr. ECKHARDT. Congressman Ruppe, we are delighted to have you before the subcommittee. I have enjoyed association with Congressman Ruppe on the Interior Committee and I know he has been a very productive member of that committee. And we are very glad to have you here today.

STATEMENT OF HON. PHILIP E. RUPPE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN

Mr. RUPPE. Well, thank you very much, Mr. Chairman. I am very pleased that you would hear the Michigan delegation this morning. And I know that the testimony that Mr. Brodhead and Senator Griffin have given is very deeply and sincerely shared by the Michigan delegation, which is particularly concerned with the question of toxic chemical accidents.

Mr. Chairman, I don't believe it is necessary to detail the suffering that such accidents may cause-both medical and financial. The physical and emotional agony experienced by the innocent victims of such accidents is not easy to verbalize. Nor is it necessary to explain the need to prevent such accidents for ever occurring-a laudable but almost impossible task to accomplish. If only it were as easy as the old adage-an ounce of prevention is worth a pound of cure.

Congress took an excellent first step in preventing such accidents by passage of the Toxic Substances Control Act almost 2 years ago. But I would like to emphasize that it is only the first step. With over 2 million recognized chemical compounds in our environment, 30,000 chemical substances presently in commerce, and 1,000 new chemical substances expected to be introduced this year, the potential for another major chemical accident is ticking away like a time bomb.

According to the U.S. Department of Agriculture, since 1969 there have been 29 major chemical contamination incidents affecting 30 States ranging from Maine and New York to Georgia, from the Midwest to Louisiana, and reaching as far west as California. In my own State of Michigan, we are still recovering from the worst chemical accident in our Nation's history, resulting in damages exceeding $100 million. That accident took place in 1973, and yet it was not until 1976 the State finally sought assistance on the health issue. Part of it may have been due to the question of legal liability, but essentially it was due to a lack of information. And yet there are still at least 135 claims awaiting trial. And recently,

the State of Michigan filed a damage suit for $120 million just to pay for State expenditures in this disaster.

Because of delay in responding to the accident, PBB contamination spread throughout the State. The result has been that Michigan has suffered from a crisis of confidence in its food product, experiencing a Canadian boycott of meat-which is still continuing-a decline of sales of Michigan labeled food products, and physical suffering from the effects of a chemical known as polybrominated biphenyls.

Despite these problems, the Farmers Home Administration testified in 1976 that existing credit programs under the farm operating loan program, farm ownership loans, and emergency livestock loans were adequate for covering PBB contamination. However, I understand the Farmers Home Administration has recently acknowledged that more than 40 farms in Michigan are in serious jeopardy of failure and that no loan program will help these already financially strapped farms.

I think what it means is that in many cases a lot of farmers have received the full amount that they are entitled to receive of direct FHA loan assistance. If they want to get additional assistance because of the PBB problem, the only way they can get it is through the banks with an FHA loan guarantee. But in those cases where the cattle or the land is affected by PBB, the banks are very reluctant to participate in such a loan program, even if it is FHA guaranteed.

So, the problem is this: What is being done to assist innocent victims-and I want to emphasize again-innocent victims of chemical accidents. We have loan programs mentioned above that were not designed to provide relief in such cases and have been of little help to Michigan farmers. We have a Toxic Substances Control Act to help prevent such accidents, but it is not designed to alleviate such disasters after they occur. We have an emergency fund of $10 million in the recently enacted Clean Water Act to help contain a chemical emergency, but this small amount of money will only assist States, and not individuals.

Related existing programs to financially assist innocent victims include a dairy indemnity fund for milk contaminated by radiation or pesticides, a beekeeper indemnity program for bees destroyed by pesticides, and the House even passed a victims of crime compensation bill.

Yet, what is the relief mechanism for individuals in the food producing sector when it comes to toxic chemical contamination? It appears that financial expenses incurred can only by recovered in court. Judging from the fact that a trial by one farmer harmed by PBB contamination in Michigan is in its second year with court expenditures of $1.25 million and a transcript of 19,764 pages and that at least 135 other claims are waiting trial for an accident that occurred in 1973, this is not a realistic remedy for the marginal farmer or food producer.

S. 1531 and H.R. 9947, which Congressman Ford and I introduced, would provide that needed mechanism. First, it would require the State, which is closest to the chemical scene, to discover the contaminated food and livestock, and promptly compensate those harmed by the chemical. Then, the State would reach agree