I want to relay my personal experience in developing clean air plans to attain the 1-hour ozone standard in the Houston-Galveston region. I believe it will be relevant to what other major metropolitan areas are about to experience as the 8-hour ozone and fine particulate standards are implemented. We've embarked on an ambitious plan, with the backing of the environmental organizations, elected officials, the business community and state regulators, which touches all aspects of the air pollution problem. Industries in the 8-county Harris County region are investing $4 billion over the next three years to install state-of-the-art controls to reduce nitrogen oxides by 80% -- ambitious by any standard. The Texas Legislature has funded the Texas Emission Reduction Program, a $150 million per year, seven-year grant program to reduce emissions from the mobile source sector faster than federal controls will otherwise achieve. We've reformulated the diesel in our region, reduced speed limits, banned the use of commercial lawn maintenance before noon and initiated the first phase of a light rail mass transit system at a cost of $350 million with no federal funding. We've even regulated residential hot water heaters, requiring high efficiency units in new construction, and this is on top of an 80% reduction in industrial and automobile hydrocarbon emissions over the past 20 years. I believe this speaks to a strong commitment to clean air in Houston.

As a public official, I worry about clean air and also about the economic vitality of our region. We want clean air and a sound economy. In 2000, the Greater Houston Partnership, our local Chamber of Commerce, sponsored a thorough, independent economic study of our clean air plan. This study was conducted by Dr. George Tolley, a former Deputy Secretary of the Treasury and Professor Emeritus of Economics and Social Sciences at the University of Chicago. He worked closely with Dr. Barton Smith of the University of Houston, a well-known and respected expert on the Houston regional economy. The study, published in 2001, looked at the socio-economic impacts of Houston's clean air plan and concluded that by 2010 the region will have 38,000 fewer jobs, Gross Regional Product reduced by $3.5 billion and reduced tax receipts to state and local government by $300 million dollars per year. These are serious economic consequences by any yardstick, but we believe they are necessary to attain the 1-hour standard.

Let me look to the future for a moment. Some 530 counties nationwide will be designated as non-attainment for the 8-hour ozone standard; and we're in the process for making similar determinations for the fine particulate standard. Many of these areas will be non-attainment for the first time ever; others have been trying to attain for 30 years.

EPA is now in the process of developing the regulatory framework for states to implement these standards. EPA modeling shows that many of these areas will attain the 8-hour ozone and fine particulate standards with measures already on the books such as cleaner fuels and engines, and with measures being implemented to reduce transported emissions. I want to commend the EPA and this Administration for these efforts.

However, for some large metropolitan areas such as the Harris County region, New York City, large areas of New Jersey and Connecticut, Philadelphia, and others, the same EPA modeling shows continued non-attainment of the 8-hour ozone standard as far out as 2020. This is after significant reductions in transport emissions either from Clear Skies or the Interstate Air Quality Rule, reductions from cleaner fuels and engines, and local 1-hour ozone control measures. Modeling by third parties such as the Ozone Transport Commission in the northeast and the Lake Michigan Air Directors Consortium in the mid-west supports the EPA predictions. This presents several important public policy issues for EPA, local elected officials and for this Committee to consider.

The first policy issue for consideration is the attainment deadlines that EPA has proposed for these large metropolitan areas that modeling shows will not attain for the 8-hour ozone standard by 2020. These areas have proposed attainment deadlines in the 2010-2013 timeframe, well before emission reductions from federal measures such as transport and mobile source controls are fully realized. In fact, modeling in Harris County shows you can completely eliminate the industrial emissions or mobile source emissions and still not attain the standard. As a result of these areas not being able to achieve enough emission reductions to demonstrate attainment by their respective deadlines, they may not be able to submit approvable State Implementation Plans to the EPA. Unless these metropolitan areas can demonstrate through modeling that they will attain the standard by their designated deadlines, the Clean Air Act imposes sanctions, including the loss of federal highway funds. In Harris County, this is about $1 billion per year in loss of federal highway dollars and other restrictions on economic growth. One option suggested is to have states volunteer to move up into a more severe air quality classification to get more time for attainment, I can tell you from the standpoint of an elected official, this is not a feasible option.

The second issue is the attainability of the standards. I'm not here to say we need to change or eliminate the 8-hour ozone or fine particulate standards. That is for the public health professionals and scientists to determine. However, I can say that EPA's modeling, and modeling by others, suggests these standards will not be attainable in some areas for the foreseeable future despite our best efforts. Unattainable standards only place more areas in the position of facing severe economic sanctions under the Clean Air Act because they can't submit approvable State Implementation Plans. I don't believe this is good public policy. It creates division in our communities and often results in litigation, which slows clean air progress.

So, where do we go from here?

First, I believe all areas need attainment deadlines that are technically and economically feasible. We need to acknowledge the EPA's modeling work and develop sound public policies for those areas that will not attain in the foreseeable future.

Second, I believe air quality standards should be reasonable and attainable; otherwise areas will be in a position of not being able to submit approvable SIPs and living under economic sanctions or the threat of sanctions for the foreseeable future.

Third, I believe we should fully capture the emission reduction benefits from existing and pending federal control measures. We have and will continue to invest in cleaner fuels, engines and transport controls; let's capture those benefits at the local level before implementing the next round of very high cost controls, if any remain.

Fourth, we need to take a closer look at how our current air quality management process is working and how it can be improved. One indicator I use to suggest the need for improvement is that despite literally hundreds of billions of dollars spent on federal, regional and local control measures over the past 20 years, we still have not attained the ozone and PM standards in many areas. We're not even close in some areas. This suggests to me that we have an underlying science and policy problem that needs to be addressed.

Finally, and speaking as a representative of NACo, county governments are ultimately responsible for protecting the health, welfare and safety of their citizens. Many rural and suburban counties do so with limited resources and are often brought into clean air plans because they are adjacent to large urban areas. Many times such counties are non-attainment because of upwind transport or because they have emissions from major freeways leading to the urban centers. These counties need a seat at the air quality table and they should not be penalized solely because they are impacted by adjacent urban areas. They need resources, support and flexibility from federal agencies.

In conclusion, as we continue our efforts to clean the nation's air, there needs to be a balance with economic prosperity. We need to be especially mindful of this, as we are required to make even more costly local investments and begin to look at how to alter human behavior to affect positive environmental change. Clean air and a sound economy do not have to be mutually exclusive but to accomplish both does require thoughtful public policy. That is an obligation the citizens of this country expect of all of us.

I want to thank the EPA, this Administration and this Committee for the on-going hard work required to clean the nation’s air. We've made progress and will continue to do so. I want to thank the Committee for asking me to testify today. I am happy to answer any questions you may have.