[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]




 
                       FULL COMMITTEE HEARING ON
                     THE NEEDS OF SMALL BUSINESSES
                         AND FAMILY FARMERS IN
                     REGULATING OUR NATION'S WATERS

=======================================================================

                                HEARING

                               before the


                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                             JULY 22, 2009

                               __________

                               [GRAPHIC] [TIFF OMITTED] TONGRESS.#13
                               

            Small Business Committee Document Number 111-038
Available via the GPO Website: http://www.access.gpo.gov/congress/house


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                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman

                          DENNIS MOORE, Kansas

                      HEATH SHULER, North Carolina

                     KATHY DAHLKEMPER, Pennsylvania

                         KURT SCHRADER, Oregon

                        ANN KIRKPATRICK, Arizona

                          GLENN NYE, Virginia

                         MICHAEL MICHAUD, Maine

                         MELISSA BEAN, Illinois

                         DAN LIPINSKI, Illinois

                      JASON ALTMIRE, Pennsylvania

                        YVETTE CLARKE, New York

                        BRAD ELLSWORTH, Indiana

                        JOE SESTAK, Pennsylvania

                         BOBBY BRIGHT, Alabama

                        PARKER GRIFFITH, Alabama

                      DEBORAH HALVORSON, Illinois

                  SAM GRAVES, Missouri, Ranking Member

                      ROSCOE G. BARTLETT, Maryland

                         W. TODD AKIN, Missouri

                            STEVE KING, Iowa

                     LYNN A. WESTMORELAND, Georgia

                          LOUIE GOHMERT, Texas

                         MARY FALLIN, Oklahoma

                         VERN BUCHANAN, Florida

                      BLAINE LUETKEMEYER, Missouri

                         AARON SCHOCK, Illinois

                      GLENN THOMPSON, Pennsylvania

                         MIKE COFFMAN, Colorado

                  Michael Day, Majority Staff Director

                 Adam Minehardt, Deputy Staff Director

                      Tim Slattery, Chief Counsel

                  Karen Haas, Minority Staff Director

        .........................................................

                                  (ii)

  
?

                         STANDING SUBCOMMITTEES

                                 ______

               Subcommittee on Contracting and Technology

                     GLENN NYE, Virginia, Chairman


YVETTE CLARKE, New York              AARON SCHOCK, Illinois, Ranking
BRAD ELLSWORTH, Indiana              ROSCOE BARTLETT, Maryland
KURT SCHRADER, Oregon                W. TODD AKIN, Missouri
DEBORAH HALVORSON, Illinois          MARY FALLIN, Oklahoma
MELISSA BEAN, Illinois               GLENN THOMPSON, Pennsylvania
JOE SESTAK, Pennsylvania
PARKER GRIFFITH, Alabama

                                 ______

                    Subcommittee on Finance and Tax

                    KURT SCHRADER, Oregon, Chairman


DENNIS MOORE, Kansas                 VERN BUCHANAN, Florida, Ranking
ANN KIRKPATRICK, Arizona             STEVE KING, Iowa
MELISSA BEAN, Illinois               W. TODD AKIN, Missouri
JOE SESTAK, Pennsylvania             BLAINE LUETKEMEYER, Missouri
DEBORAH HALVORSON, Illinois          MIKE COFFMAN, Colorado
GLENN NYE, Virginia
MICHAEL MICHAUD, Maine

                                 ______

              Subcommittee on Investigations and Oversight

                 JASON ALTMIRE, Pennsylvania, Chairman


HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma, Ranking
BRAD ELLSWORTH, Indiana              LOUIE GOHMERT, Texas
PARKER GRIFFITH, Alabama

                                 (iii)

  
?

               Subcommittee on Regulations and Healthcare

               KATHY DAHLKEMPER, Pennsylvania, Chairwoman


DAN LIPINSKI, Illinois               LYNN WESTMORELAND, Georgia, 
PARKER GRIFFITH, Alabama             Ranking
MELISSA BEAN, Illinois               STEVE KING, Iowa
JASON ALTMIRE, Pennsylvania          VERN BUCHANAN, Florida
JOE SESTAK, Pennsylvania             GLENN THOMPSON, Pennsylvania
BOBBY BRIGHT, Alabama                MIKE COFFMAN, Colorado

                                 ______

     Subcommittee on Rural Development, Entrepreneurship and Trade

                 HEATH SHULER, North Carolina, Chairman


MICHAEL MICHAUD, Maine               BLAINE LUETKEMEYER, Missouri, 
BOBBY BRIGHT, Alabama                Ranking
KATHY DAHLKEMPER, Pennsylvania       STEVE KING, Iowa
ANN KIRKPATRICK, Arizona             AARON SCHOCK, Illinois
YVETTE CLARKE, New York              GLENN THOMPSON, Pennsylvania

                                  (iv)

  
?

                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page

Velazquez, Hon. Nydia M..........................................     1
Graves, Hon. Sam.................................................     2

                               WITNESSES

Kruse, Mr. Charlie, President, Missouri Farm Bureau, Jefferson 
  City, MO. On behalf of American Farm Bureau Federation.........     3
Pebley, Mr. Trey, McAllen Construction, Inc., McAllen, TX. On 
  behalf of Associated General Contractors.......................     5
Chilton, Mr. Jim, Arivaca, AZ. On behalf of Arizona Cattle 
  Growers Association, Public Lands Council, and National 
  Cattlemen's Beef Association...................................     7
Gray, Mr. Bob, Executive Director, Northeast Dairy Farmers 
  Cooperatives...................................................     8
Schellenberg, Mr. Lyle, President, Armadillo Underground, Salem, 
  OR. On behalf of National Utility Contractors Association......    11

                                APPENDIX


Prepared Statements:
Velazquez, Hon. Nydia M..........................................    35
Graves, Hon. Sam.................................................    37
Kruse, Mr. Charlie, President, Missouri Farm Bureau, Jefferson 
  City, MO. On behalf of American Farm Bureau Federation.........    39
Pebley, Mr. Trey, McAllen Construction, Inc., McAllen, TX. On 
  behalf of Associated General Contractors.......................    71
Chilton, Mr. Jim, Arivaca, AZ. On behalf of Arizona Cattle 
  Growers Association, Public Lands Council, and National 
  Cattlemen's Beef Association...................................    83
Gray, Mr. Bob, Executive Director, Northeast Dairy Farmers 
  Cooperatives...................................................    91
Schellenberg, Mr. Lyle, President, Armadillo Underground, Salem, 
  OR. On behalf of National Utility Contractors Association......    93

Statements for the Record:
Dalhkemper, Hon. Kathy...........................................    98
Natural Resources Defense Council................................   100
National Council of Farmer Cooperatives..........................   106
Nebraska Cattlemen...............................................   109
National Rural Electric Cooperative Association..................   112
Independent Petroleum Association of America.....................   116

                                  (v)

  

 
                       FULL COMMITTEE HEARING ON


 
                     THE NEEDS OF SMALL BUSINESSES


 
                         AND FAMILY FARMERS IN


 
                     REGULATING OUR NATION'S WATERS

                        Wednesday, July 22, 2009

                     U.S. House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 1:00 p.m., in Room 
2360 Rayburn House Office Building, Hon. Nydia Velazquez 
[chairwoman of the Committee] presiding.
    Present: Representatives Velazquez, Dahlkemper, Schrader, 
Kirkpatrick, Ellsworth, Halvorson, Graves, Westmoreland, 
Gohmert, Luetkemeyer, Schock and Thompson.
    Chairwoman Velazquez. Good morning. I call this hearing of 
the House Small Business Committee to order. In our nation's 
recovery efforts, green policies have been a top priority and 
with good reason. Already, investments in sectors like 
efficiency and renewable energy are creating jobs and driving 
growth. At the forefront of this growing movement are our 
entrepreneurs: the innovators who are leading the way in both 
conservation and economic resurgence.
    It is no surprise that entrepreneurs and family farmers are 
powering the green economy. They recognize that a clean, 
sustainable environment is critical to the health of both the 
planet and the business world. And it makes sense because small 
firms, like all other businesses, rely on natural resources to 
run their operations. Of those critical resources, water is one 
of the most important.
    Our nation's waterways play a vital role in all acts of 
commerce. In one form or another, water is used for everything 
from paving roads to raising livestocks. In recent years, 
however, the process for regulating our waterways has become 
complex. Today, we will examine the current regulatory 
framework and look for ways to make sure small firms can 
comply.
    When first introduced, the Clean Water Act sought to 
restore and maintain the integrity of our nation's ``navigable 
waters.'' Today, that term is increasingly hard to define. How 
exactly does one identify a navigable water? If a ditch drains 
into a stream that flows into a river, does the ditch then need 
to be regulated?
    A 2006 Supreme Court ruling sought to answer that question. 
But rather than clearing up the ambiguity, the court only 
compounded it further. The resulting red tape now reaches all 
aspects of the CWA, including the permitting process.
    Before starting projects that affect our waterways, 
entrepreneurs must obtain federal permits. Ninety-five percent 
of the time, those licenses are granted. Still, small firms say 
that the authorization process is overly complicated and that a 
tangle of regulations has created significant backlogs. In 
fact, the current number of unmet requests falls somewhere 
between 15,000 and 20,000.
    On average, a business will wait anywhere from 2 to 3 years 
to secure an individual license. These kinds of delays are 
particularly challenging today, as small contractors vie to win 
shovel-ready stimulus projects, the sort that have to begin 
right away, not two or three years down the road.
    Nearly four decades ago, the Clean Water Act cemented 
America's commitment to conservation. We want to continue that 
legacy today, but in order to do so, we will need to be sure 
small firms understand their options and know what is at stake. 
When it comes to the navigable waters issue, a clarification of 
terms could go a long way. So could efforts to streamline the 
permit process.
    Everyone wants a clean, safe water supply. That goes 
without saying. But in protecting our waterways, it is critical 
that entrepreneurs, particularly small businesses, not be 
unduly burdened. Hindering small firms will cripple efforts to 
create a greener, more efficient economy.
    Small businesses need common sense solutions, the kinds 
that are both environmentally sound and economically viable. I 
know that, given a voice in the process, entrepreneurs can help 
us find a middle ground.
    I would like to take this opportunity to take all the 
witnesses in advance for your testimony. And I am glad that 
they were able to make this trip to Washington to be with us 
today and look forward to hearing from them.
    With that, I will yield to Ranking Member Graves for his 
opening statement.
    Mr. Graves. Good afternoon. Thank you, Madam Chairman, for 
having this hearing and choosing an initiative that is so 
critically important to business and to agriculture. I 
appreciate it.
    As a farmer myself, I fully appreciate the land that I 
farm. My brothers and I farm about 2,800 acres of corn and 
soybeans. In order for us to achieve the greatest yields on our 
property, we have to take care of that land.
    So trust me when I say that farmers are the very best 
stewards of the land that they farm. It is absolutely in their 
best interest. However, I grow increasingly frustrated when the 
government dictates to me how I can use my property. As 
suggested, it knows better than those who live off of it.
    In the 109th and 110th Congress, legislation was introduced 
that would have been an unprecedented expansion of federal 
government intrusion into the lives of property and business 
owners across the country.
    The Clean Water Restoration Act would expand the scope of 
the Clean Water Act to essentially regulate anything that is 
wet: ditches, ponds, gutters, you name it. This bill would 
further the recent trend of more government while limiting the 
role of the rights of states, businesses, farmers, and property 
owners. Although legislation has yet to be introduced in the 
House this Congress, recent activity in the Senate has elevated 
concerns that this bill will soon be before us.
    One look at the expansive list of entities opposed to the 
Clean Water Restoration Act and you can immediately conclude 
that this legislation would have broad negative impacts. 
Litigation from third party act in this group would 
dramatically increase as the government and stakeholders 
struggle to clarify the new meaning of the legislation.
    This Committee has extensively explored the economic 
consequences of an out-of-control legal system. Expanded 
federal jurisdiction over the waters of the United States would 
mean a significant increase in permit applications for people 
with as little as a puddle on their property. These costs and 
delays will slow down a host of economic activity, including 
agriculture, real estate development, electricity transmission, 
transportation infrastructure development, and various energy-
related tasks, such as mining and energy exploration.
    There are so many things working against our economy right 
now. With government spending spiraling out of control, climate 
change legislation with the potential to drive energy costs 
through the roof, and a new health care bill estimated to cost 
over a trillion dollars, it is important to fully understand 
the economic consequences of our legislative actions.
    Again, Madam Chairman, I appreciate that you are holding 
this hearing. I want to thank all of the witnesses for being 
here today. I know some of you have come a long ways, and we do 
appreciate it very much in this Committee and look forward to 
hearing the testimony.
    Chairwoman Velazquez. The Chair recognizes Ranking Member 
Graves for the purpose of introducing our first witness.
    Mr. Graves. Thank you, Madam Chair.
    I would like to introduce a friend of mine, Charlie Kruse, 
who is from Dexter, Missouri. He and his wife farm down in 
Dexter, Missouri, which is some of the best ground you can find 
in the State of Missouri. Charlie is President of the Missouri 
Farm Bureau and is testifying on behalf of the American Farm 
Bureau, which is the nation's largest general farm 
organization.
    Charlie, it is always good to see you, and I thank you for 
making the trip out here to testify before the Small Business 
Committee on such an important issue.
    Mr. Kruse. Thank you very much.

STATEMENT OF CHARLIE KRUSE, PRESIDENT, MISSOURI FARM BUREAU, ON 
           BEHALF OF AMERICAN FARM BUREAU FEDERATION

    Mr. Kruse. Madam Chairwoman and members of the Committee, 
thank you so much for having this hearing today and for giving 
us an opportunity to express our views on this very important 
issue. I am very pleased to have the opportunity to testify 
before this Committee with my good friend Ranking Member Sam 
Graves. We have been friends a long time. I have great respect 
for Sam.
    My name is Charlie Kruse. I am a fourth generation farmer 
from Dexter, Missouri, in the Bootheel of the State of 
Missouri. I serve as the President of the Missouri Farm Bureau, 
and I am very pleased to offer this testimony on behalf of the 
American Farm Bureau Federation and farmers and ranchers 
nationwide.
    We appreciate the invitation to comment on the regulatory 
implications and associated costs to small business of deleting 
the term ``navigable'' from the Clean Water Act. The cases I am 
going to tell you about are real. And they show that small 
words do indeed make a big difference sometimes.
    If we were to take the word ``navigable'' out of the Clean 
Water Act and let the Corps of Engineers and EPA regulate all 
interstate and intrastate waters, many more farmers and 
ranchers will be caught in regulatory quicksand that can mean 
years of delay and over a million dollars in costs.
    A study backs up what farmers and ranchers have been 
telling all of us. It takes two to four years to prepare and 
obtain a 404 permit. The average cost can range from over 
$270,000--and that figure doesn't include the cost of 
mitigation, design changes, and the cost of carrying capital--
down to several thousand dollars, in either case a very large 
sum of money for someone trying to operate a small business.
    The first example is about a farmer who wanted to 
transition his pastureland to grape production and was told 
that he had to obtain a 404 permit. It took two years for the 
agencies to issue the permit. The farmer spent over $6,000 in 
consulting fees, over $3,000 in permit and mapping fees, and 
over $135,000 to mitigate 10 acres that were arguably not 
wetlands.
    The second example is about a small farmer who wanted to 
improve the existing drainage on 11 acres of his land. He first 
went to USDA, who told him they did not consider his land a 
wetland.
    He then went to the state agency that had jurisdiction over 
this issue in his state. The state agency told him the same 
thing. They did not consider his land a wetland. Therefore, he 
would not need to have a permit.
    But the Corps of Engineers did tell him that he had to have 
a permit. They told him he needed both a permit and 17.7 acres 
of mitigation. The cost of compliance, $77,000 more than the 
property was worth, and the farmer just simply couldn't afford 
to comply. So he left his land as it was.
    The third example is about private ponds and lakes. I dare 
say that practically every, if not every, member of Congress 
has privately owned lakes and privately owned ponds in their 
state. In my State of Missouri, we have a large number. We have 
over 300,000 ponds, privately owned ponds, in the State of 
Missouri.
    If the word ``navigable'' were to be taken out of the Clean 
Water Act, the federal government would then have jurisdiction 
over every privately owned pond and every privately owned lake, 
not only in the State of Missouri but in every state in the 
nation. That is just something that makes no sense to us in any 
way.
    Lastly, I want to highlight the regulatory treatment of 
prior converted cropland. Deleting the term ``navigable'' opens 
the door for the agencies to regulate the use and value of over 
55 million acres of cropland, a value conservatively estimated 
to be $110 billion.
    A 1993 regulation codified longstanding policy of not 
treating prior converted cropland as a water of the United 
States and recognize that prior converted cropland could be 
used for either agricultural or nonagricultural uses. Changing 
this important regulatory exemption will devastate and devalue 
the assets of hundreds of thousands of landowners currently 
making plans to use their property, sell development rights, or 
give conservation easements.
    We as farmers consider our land our 401(k). In many cases, 
that is all that a farmer has. And to dramatically reduce the 
value of this land, which if we remove the word ``navigable'' 
from the Clean Water Act is something that we think would be a 
very devastating process. So we would urge you to keep the word 
``navigable'' in the Clean Water Act as it has been for years 
and years, since its inception.
    Thank you very much, Madam Chairwoman.
    [The statement of Mr. Kruse is included in the appendix.]
    Chairwoman Velazquez. Thank you, Mr. Kruse.
    Our next witness is Mr. Trey Pebley. He is the Vice 
President of McAllen Construction in McAllen, Texas. His firm 
is a small, family-owned and operated business with 133 
employees and annual revenues of around $18 to $20 million.
    Mr. Pebley is testifying on behalf of the Associated 
General Contractors, which is the largest and oldest national 
construction trade association in the United States.
    Sir, you will have five minutes to make your statement.
    Mr. Pebley. Thank you.

STATEMENT OF TREY PEBLEY, McALLEN CONSTRUCTION, INC. ON BEHALF 
          OF ASSOCIATED GENERAL CONTRACTORS OF AMERICA

    Mr. Pebley. Good afternoon, Chairwoman Velazquez, Ranking 
Member Graves, and members of the Committee. Thank you for the 
opportunity to testify on how federal regulation of water and 
wetlands impacts my company and my community.
    My name is Trey Pebley. I am Vice President of McAllen 
Construction, located in McAllen, Texas. McAllen is a small 
family-owned and operated business that builds bridges and 
installs municipal utilities, such as water lines, sanitary 
sewers, and storm sewers. We have 133 employees and annual 
revenues of around $20 million.
    I am an active member of the Associated General Contractors 
of America, on whose behalf I am pleased to represent today, 
and serve in a leadership role on AGC's Environmental Network 
Steering Committee.
    AGC is the largest and oldest national construction trade 
association in the United States, representing more than 33,000 
firms. AGC members are engaged in the construction of private 
and public facilities and are a major contributor to 
employment, gross domestic product, and manufacturing.
    I am also an elected trustee to the McAllen Public 
Utilities Board. This is an at-large position that oversees 
water and wastewater infrastructure and management in my 
community. As an elected official and a public steward, water 
quality is very important to me.
    In my position, I am challenged to make decisions about how 
to best protect water quality and the health and welfare of our 
citizens. And because our resources are limited, I must also 
make sure the projects we fund are done in a timely and cost-
effective manner.
    That is why I am concerned about a bill called the Clean 
Water Restoration Act that would fundamentally expand the 
federal jurisdictional scope of the Clean Water Act and 
displace state and local jurisdiction over land and water use.
    Such efforts would cause significant disruption to the 
construction industry and adversely affect not only AGC's 
membership but also the health and welfare of the general 
public.
    Construction projects that lie in waters of the United 
States within the meaning of the Clean Water Act require 
federal discharge permits that are both costly and time-
consuming to obtain. Many of our projects require permits and 
have been delayed while we have waited for the Corps' district 
office to issue them. These delays have cost us money.
    As delays and costs increase, as they will under the 
proposal, some construction projects will inevitably go 
unbuilt. In my line of work, this means impeding water supply 
and wastewater treatment projects that are vital to improving 
public health and welfare and fixing our aging infrastructure.
    Other AGC members build highway and transit infrastructure, 
repair dams, construct flood control projects, and renovate 
schools, among many other things. Any delay in these types of 
projects deprives the general public of the benefits they would 
derive from them.
    Today my industry faces a lot of uncertainty regarding 
whether any one project lies in waters of the United States and 
requires a permit because the exact meaning of that term 
continues to be in debate. It can take a lot of time and effort 
just for the Corps and EPA to make a jurisdictional 
determination to see if a permit is even needed.
    Contractors and property owners alike have a right to 
predictability and consistency in the application of law and 
need fair notice of what activities are regulated. As the 
operators of construction sites, both property owners and their 
construction contractors risk civil and criminal penalties for 
failure to obtain a necessary permit.
    AGC is committed to protecting and restoring the nation's 
waters, but we do not believe that it is in the nation's best 
interest to put everything under federal jurisdiction in the 
interest of clarity.
    The Clean Water Restoration Act would do just that: make 
everything federal. As a result, any activity affecting any wet 
area in the United States would be subject to federal 
regulation. We think this goes too far. So do state and local 
governments that have long assumed primary responsibility for 
land and water use.
    The proposal would give the Corps and EPA unlimited 
regulatory authority over all waters, period, including 
groundwater. This is of serious concern to us as underground 
contractors.
    Under this expansion, contractors, especially underground 
contractors, like myself, would continually face the threat of 
legal liability for unforeseen and unpreventable encounters 
with groundwater. Every trenching operation, perhaps every hole 
dug in America, would require a permit to avoid risk of 
violation.
    Finally I would like to add a thought on the so-called 
``compromise'' version of the proposal that the Environment and 
Public Works Committee approved in June. It still results in 
the same outcome AGC opposes: fundamentally expanding the scope 
of federal jurisdiction.
    I understand that Representative Jim Oberstar may 
reintroduce this bill shortly and include the Senate's changes.
    [The statement of Mr. Pebley is included in the appendix.]
    Chairwoman Velazquez. Time has expired. During the question 
and answer period, you will have an opportunity to expand on 
any point that you were not able to make at this point.
    Mr. Pebley. Okay. Thank you, Madam.
    Chairwoman Velazquez. The Chair recognizes Ms. Kirkpatrick 
for the purpose of introducing our next witness.
    Ms. Kirkpatrick. Madam Chairwoman, thank you very much for 
this opportunity to introduce a fellow rancher from my great 
State of Arizona. My mother's family was ranchers in Navajo 
County. And we grew up knowing that healthy land makes healthy 
cattle, which makes healthy families.
    I am very pleased to introduce Mr. Jim Chilton, a fifth 
generation rancher in Arizona. He is here to testify on behalf 
of the Arizona Cattle Growers, the Public Land Council, and the 
National Cattlemen's Beef Association.
    Along with his brother and family, Mr. Chilton ranches on 
50,000 acres near Arivaca, Arizona. Like many ranches in 
Arizona, the family ranch includes private property, state 
school trust land, and federal land, a combination that 
presents unique challenges and responsibilities. Though his 
ranch is outside my congressional district, Mr. Chilton speaks 
today for many of my constituents.
    Thank you, Mr. Chilton. And I know the Committee is 
interested in hearing your thoughts today.
    And thank you, Madam Chairwoman, for including ranchers as 
a critical part of our Small Business Committee.

 STATEMENT OF JIM CHILTON ON BEHALF OF ARIZONA CATTLE GROWERS 
  ASSOCIATION, PUBLIC LANDS COUNCIL, AND NATIONAL CATTLEMEN'S 
                        BEEF ASSOCIATION

    Mr. Chilton. Good afternoon, Madam Chairman, Ranking 
Member, and members of the Committee. And thank you, 
Congresswoman Kirkpatrick. I am testifying on behalf of the 
Arizona Cattle Growers Association, the Public Lands Council, 
and the National Cattlemen's Beef Association, and my family.
    Protecting the quality of the nation's surface water 
continues to be a priority for livestock producers. As 
cattlemen, we have a commitment to being good stewards of the 
land. And that job we take very seriously.
    The Clean Water Restoration Act will negatively impact 
small business owners, like me, by limiting my ability to 
improve my ranching operations. The legislation vastly expands 
the Corps of Engineers and the Environmental Protection 
Agency's regulatory jurisdiction and will result in limitless 
control over all water in the nation and the dramatic expansion 
of bureaucracy. Ultimately bureaucrats would control not only 
water but citizens' lives and land use and all watersheds.
    The Chairwoman mentioned that there are 15 to 20 thousand 
existing 404 permits in the hopper waiting to be acted upon. 
Why add tens of thousands more? How many more bureaucrats will 
the Corps have to hire or the EPA?
    As the Supreme Court has recognized and my colleague Mr. 
Kruse has indicated, "it takes over 788 days and $271,596 to 
comply with the current process and the average applicant for a 
nationwide Corps of Engineers permit currently spends 313 days, 
the average cost of $28,915. As Mr. Kruse pointed out, this is 
not counting the substantial costs for changes in design and 
mitigation." I am quoting the Supreme Court in the Rapanos 
decision.
    Prior to the Supreme Court Rapanos decision, I applied for 
a 404 permit to construct a normal dirt ranch road across a dry 
wash. I had to hire an attorney, environmental consultants, 
which cost about $40,000. Hearing of the costs in terms of 
civil penalties, et cetera, I decided to drop and abandon the 
project.
    We later abandoned another needed improvement that would 
require culverts in two dry washes on existing roads that have 
been there for 50 years on our private land. We were again told 
that we would need a 404 permit, even though the total impact 
would be slightly more than one-tenth of an acre in a 100-acre 
pasture.
    I asked, ``How can these two dry washes impact a navigable 
stream since the nearest navigable stream is the Colorado 
River, about 275 miles away?''
    The Clean Water Act of 1972 should not be expanded to 
include "activities affecting water." What life activity does 
not affect water? It would open the door to lawsuits regarding 
every human use. The citizen suit provision would allow radical 
environmentalists to stop or seriously delay any farmer's or 
rancher's improvement project anywhere in the nation due to the 
proposed expansion of jurisdiction.
    Another concern I have is the bias federal officers could 
have towards my livelihood: Raising livestock. A rogue Corps 
officer could dilly-dally and delay in approving a needed 
permit or may demand over-the-top mitigation. The act must 
remain as it is and be limited to navigable waters as defined 
by the Supreme Court's Rapanos decision.
    [The statement of Mr. Chilton is included in the appendix.]
    Chairwoman Velazquez. Time is up. Thank you, Mr. Chilton.
    Our next witness is Mr. Bob Gray. He is Executive Director 
of the Northeast Dairy Farmers Cooperatives. In this position, 
Mr. Gray is engaged in a wide array of issues affecting dairy 
farmers in the Northeast. Mr. Gray has been a long-time 
advocate and representative of the dairy industry as he is 
based in the Washington, D.C. area.
    Welcome.

  STATEMENT OF BOB GRAY, EXECUTIVE DIRECTOR, NORTHEAST DAIRY 
                      FARMERS COOPERATIVES

    Mr. Gray. Thank you very much, Madam Chairman, Ranking 
Member Graves, and members of the Committee. I am pleased to 
have the opportunity to testify. And I apologize for coming in 
with my coat off, but I came over from a meeting in the Senate. 
And I was perspiring so badly I thought if I put my coat on, I 
might faint. So I appreciate you not requiring that I put it 
back on.
    Chairwoman Velazquez. The gentleman is excused.
    Mr. Gray. Thank you.
    I am Bob Gray. And, as the Chairwoman mentioned, I 
represent five major dairy cooperatives in the Northeast, from 
Maryland to Maine. We have 12,000 dairy farmer, family farm 
members. Our farms average about 125 in size. The Northeast 
region is very, very important, from a dairy standpoint, as we 
produce 20 percent of the U.S. milk supply, 30 billion pounds 
of milk. It is a $50 billion business just in the Northeast.
    My mention of coming over from the Senate side, we were 
just in a meeting over there on--and I think this is relevant 
to this legislation that the Committee is having this hearing 
on today. The dairy industry is in the worst crisis it has 
faced in years and years and years.
    And we were in a meeting we were having in the Senate--in 
fact, Congressman Thompson was at this meeting--was to try to 
find ways that we could resolve the crisis that dairy farmers 
are facing. Many of them are exiting the business. And we're 
going to see a lot more leaving the business in the months 
ahead if prices do not improve.
    Now, our interest in this--I grew up on a dairy farm in 
upstate New York, in Cayuga County, New York. Actually, our 
farm was taken for a nuclear power plant siting, but the plant 
was never built because of Three Mile Island. But I am familiar 
in the farm that I grew up in with issues regarding waterways 
and wetland areas.
    I would first like to say, though, that our dairy 
cooperatives starting out really oppose S. 787. Provisions in 
this measure will have a detrimental impact on dairy producers 
all across the country, not only in the Northeast.
    This legislation would delete the term ``navigable'' from 
the underlying act, a term that appears in current law more 
than 80 times and is a key concept in the act to establish a 
practical geographical limit on the scope of the federal 
government's authority over water.
    Chairwoman Velazquez. Mr. Gray?
    Mr. Gray. Yes?
    Chairwoman Velazquez. If the gentleman will suspend for a 
second? I just would like to clarify for the record we are not 
considering any pending legislation--
    Mr. Gray. Right.
    Chairwoman Velazquez. --since there is no legislation that 
has been introduced.
    Mr. Gray. Okay. I just wanted to make the point, though, 
that the legislation that is under consideration in the Senate 
we have concerns with.
    By deleting that, this bill would expand federal 
jurisdiction over certain water features that the Supreme Court 
decided were not subject to the Clean Water Act. And it is 
taking the unprecedented action in the 37-year history of the 
Clean Water Act to expand federal government jurisdiction 
beyond what many legal experts tell us is appropriate under the 
commerce clause of the Constitution.
    The term ``navigable waters'' for decades has described 
those waters that are clearly subject to federal control. It 
has been well-settled in law that the federal regulatory 
authority over navigable waters is based on Congress' power to 
regulate navigation under the commerce clause.
    It is clear that Congress intended to use the term 
``navigable waters'' when it passed the Clean Water Act in 
1972. The conference report specifically states that Congress 
intends the term ``navigable waters'' be given its broadest 
possible constitutional interpretation, unencumbered by agency 
determinations, which have been made or may be made for 
administrative purposes. In making the statement, the 
conference report thought regulating navigable waters, Congress 
was exercising its authority under the commerce clause.
    Maintaining the term ``navigable waters'' makes it clear 
that while Congress has asserted its broad authority under the 
commerce clause, this jurisdiction is not limitless.
    Moreover, there are decades of cases that define the term 
that is why the Clean Water Act and many other statutes use 
that term as a fundamental basis for identifying federal waters 
in contrast to state waters.
    By deleting the term ``navigable,'' the bill, the Senate 
bill, S. 787, creates new questions and considerable confusion 
over the proper scope and limits of federal clean water 
jurisdiction under the Constitution and the commerce clause. As 
such, it will lead invariably to a whole new generation of 
litigation. That is why we have concerns for this legislation, 
and we wanted to pass them on to the Committee.
    And, again, I appreciate the opportunity to testify. And I 
will be glad to answer any questions that the Committee may 
have. Thank you.
    [The statement of Mr. Gray is included in the appendix.]
    Chairwoman Velazquez. Thank you, Mr. Gray.
    And the Chair recognizes the gentleman from Oregon, Mr. 
Schrader, for the purpose of introducing our next witness.
    Mr. Schrader. Thank you, Madam Chair and Ranking Member 
Graves, for letting me introduce the President of the National 
Utility Contractors Association and one of my constituents: Mr. 
Lyle Schellenberg.
    Mr. Schellenberg was recently elected 43rd President of the 
National Utility Contractors Association, which represents the 
interests of contractors engaged in the construction of utility 
lines, excavation site work, and trenchless technology. It is 
also the oldest and largest trade association working solely 
for the utility construction industry.
    He is also President of Armadillo Underground, as we know, 
which is based in Salem, Oregon. Armadillo Underground is a 
small family-owned business he founded in 1972--his hair is a 
lot lighter than mine, I can see that, aged more gracefully--
offers a wide variety of services but specializes in trenchless 
technology.
    He is well-known in my state as a leader in the utility 
contractor issue area, was appointed in 2001 by Governor John 
Kitzhaber as the contracting delegate to the Board of Directors 
for the Oregon Utility Notification Center. His commitment to 
educating and promoting the benefits of trenchless technology 
on a national level earned him the prestigious National Utility 
Contractors Association Ditch Digger of the Year for his 
contributions to the industry on the national level.
    Lyle lives in Salem with his wife Linda and two children: 
John and Angela. And I really look forward to his testimony. 
Thanks for making the long trek from the West Coast.
    I yield back.
    Mr. Schellenberg. Thank you, Congressman Schrader. I 
appreciate it.

     STATEMENT OF LYLE SCHELLENBERG, PRESIDENT, ARMADILLO 
     UNDERGROUND ON BEHALF OF NATIONAL UTILITY CONTRACTORS 
                          ASSOCIATION

    Mr. Schellenberg. Madam Chair, Ranking Member Graves, and 
honorable members of the Committee, we have 15 employees in 
Armadillo. We are down because of the economy. But we work on 
sewer and water and other infrastructure projects throughout 
the state. And I appreciate the opportunity to participate in 
this hearing on behalf of the National Utility Contractors 
Association.
    NUCA is a family of construction companies, manufacturers, 
suppliers from across the nation that build, repair, and 
maintain underground water, wastewater, gas, electric, and 
telecommunication systems.
    NUCA opposes the Clean Water Restoration Act as currently 
written. Our fundamental concern is the potential for increased 
permitting requirements for wet areas with little or no impact 
on the nation's waters, higher compliance costs, in all 
likelihood significant increases in limitation. At the same 
time, desperately needed water and wastewater infrastructure 
projects could be delayed, even if they have no link to rivers, 
streams, or other navigable water bodies.
    Under current law, if a potential job site is considered a 
wetland under federal jurisdiction, a contractor must obtain 
not only the federal wetlands permit, known as a section 404 
permit, but also protection in the form of contract clauses and 
insurance against any potential environmental problems.
    For example, we have a project in Oregon dealing with a 
road extension for the Port of Portland. The permit application 
was submitted well in advance of the project, but by the time 
it works its way through the bureaucracy.
    As finally approved, we anticipate it will be too late for 
the construction season to actually begin the work in this 
area. Therefore, the work will be postponed until next year. 
And that is typical of some of the delays that are caused by 
the existing rules.
    There is no secret the Northwest has its share of wet 
weather. In fact, it is notoriously wet. Think of the 
ramifications of new and time-consuming permit requirements of 
culverts, ditches, and other areas that might have standing 
water.
    Let's now talk about the low areas of the project. Under 
the broad definition of all waters, it is very possible that a 
404 permit could be required for the entire project. Giving the 
Corps and the EPA additional jurisdiction over all wet areas 
and activities that affect them, potentially including 
construction job sites themselves will undoubtedly increase the 
time and the cost required to complete every construction 
project requiring a section 404 permit.
    Many of the regulated community have indicated that the 
passage of the current version of the CWRA would be the largest 
expansion of the Clean Water Act since its enactment in 1972.
    The ramifications of this bill are huge. As written, 
boundaries of the CWA jurisdiction would be removed. Enactment 
could in an instance subject ditches, water, sewer pipes, 
streets, gutters, manmade ponds, storm basin waters, and even 
puddles of rainwater to federal permitting requirements.
    For the first time in the 37-year history of the CWA, 
activities that have no impact on legitimate American waters 
would be subject to full federal regulation.
    This concept would introduce an overly broad definition of 
waters of the United States. It would eliminate the traditional 
basis for federal jurisdiction under the CWA by leaving the 
term ``navigable'' from the statute and expand federal 
jurisdiction.
    In the end, the only winners will be the countless 
attorneys who will question the interpretation of the law 
through endless litigation as all stakeholders would make their 
case in court.
    A do no harm approach to water regulation would be sound 
public policy. Our industry has demonstrated track record of 
creating jobs, increasing national output, and generating 
significant economic activity.
    Recognizing the potential for recovery in the underground 
environmental infrastructure industry, Congress should be 
looking at expanded market opportunities, not opportunities to 
stifle them.
    Any public works contractor will tell you that the current 
process in obtaining a federal section 404 permit is no cake 
walk. At the very least, the legislation will require 
considerable increases in resources needed to comply with the 
federal permitting process just to keep up with the increase in 
demand.
    Guidance is needed as to what area and activities are 
covered, but the legislation as written seems only to 
complicate the issue.
    I thank you for the opportunity to appear before the 
Committee today, and I look forward to answering any questions 
that you may have.
    [The statement of Mr. Schellenberg is included in the 
appendix.]
    Chairwoman Velazquez. Thank you, Mr. Schellenberg.
    Mr. Pebley, I would like to address my first question to 
you. The EPA and the Army Corps issued guidance, rather than 
regulations, on water subjects to the Clean Water Act. And this 
happened despite the fact that there were over 66 comments to 
the 2008 guidance. Do you believe that bypassing the regulatory 
process limited opportunities for addressing small business 
concerns?
    Mr. Pebley. As AGC, we would ask that the EPA and the Corps 
of Engineers jointly work on rulemaking, regulatory rulemaking, 
and not reopen the statute. And in looking at the rulemaking, 
try and establish some clear and consistent definitions because 
that seems to be where a lot of the issue comes up is there are 
words that are used, but there are no definitions as to what 
certain words mean. And that has caused a lot of confusion.
    I think if we were to throw it back into the EPA and Corps, 
that they could work things out and it would be better for 
everybody.
    Chairwoman Velazquez. Mr. Gray, many of those 66,000 
comments that came from small businesses and family farmers, do 
you believe that the final guidance incorporated input from 
those comments that were submitted?
    Mr. Gray. I think from a practical standpoint; for example, 
in dairy farms, which I am familiar with, where we have sod 
waterways--and coming from the Northeast, where we have 
drainage ditches, we have tile, we have filter strips, I think 
what we're doing here is opening up a can of worms if we delete 
the term ``navigable waters'' because then we are open to 
almost anything.
    And I think that really worries my dairy producers who have 
small areas on their farms that are wetlands but also in the 
normal practices that farmers do to conservation practice, as I 
mentioned, such as sod waterways, these could all fall under 
the Corps and EPA. And that is what really concerns us. We 
don't think they have been taken into account enough.
    Chairwoman Velazquez. Mr. Chilton, there are two major 
cases in the last decade affecting the landscape of waters 
subject to federal regulation. With the court split in the 
recent Rapanos case, it seems these matters are complicated 
further.
    So in making investments, small farmers, do you account for 
the interpretations that have or may come out of the courts?
    Mr. Chilton. Absolutely. Thank you for the question. The 
Rapanos decision was kind of like a light from heaven, which in 
my opinion reined in a bureaucracy who had expanded the idea of 
what a navigable river is.
    Let me be very clear. In our area, I mentioned dry washes. 
Well, all of our dry washes run into Yellow Jacket Dry Wash 
which runs into Arivaca Dry Wash. Arivaca Dry Wash runs into 
the Brawley Dry Wash. And then it goes another 20 miles, and it 
seeps into the sand of the desert. Water never reaches another 
river. It just seeps in.
    So why should we in our area be subject to the Clean Water 
Act, period? And my view of Rapanos is that we are not. 
However, the Corps of Engineers in our Tucson area is 
determined at this very moment--I talked to people trying to 
get a permit--at this very moment is trying to say that ``Yes, 
we have jurisdiction.''
    It's absolutely ridiculous, and it does hurt. And I will 
never do anything that requires a permit.
    Chairwoman Velazquez. Mr. Kruse, certain farming activities 
are currently exempted from regulation and permit requirements 
under the Clean Water Act. These exemptions were designed to 
cover basic farming activities and include plowing, 
cultivating, and harvesting.
    Have these protections continued to reflect the realities 
of modern-day farming operations?
    Mr. Kruse. Madam Chairwoman, I think, first of all, I agree 
with the comments made by the other panel members about the 
concerns. With regard to your question, I think one of the 
safeguards that we have today when it comes to agriculture is 
how prior converted cropland is treated currently under the 
Clean Water Act.
    One of the real concerns, whether you are a livestock 
producer or a row crop producer, is that removing the word 
``navigable'' from the Clean Water Act and changing how prior 
converted cropland is treated is of great concern for a couple 
of reasons.
    The litigation aspects are just overwhelming, but also the 
value of one's land, which is a private property rights issue. 
As I stated in my testimony, many times a farmer's and 
rancher's land is their 401(k). So if you were to change that 
from the way it is treated now, it could drastically reduce the 
value of one's land.
    And so those are some of the real concerns we have that 
some of the safeguards we have now, as you mentioned, might be 
taken away and, in fact, I think undoubtedly would be taken 
away if the word ``navigable'' is removed.
    Chairwoman Velazquez. Okay. I would like to ask my next 
question to either Mr. Schellenberg or Mr. Pebley. The American 
Recovery and Reinvestment Act's intent is to bring the money 
either to the states, the city, and get those ready shovel 
projects going.
    We hear anecdotal stories that some projects are on hold. 
And it seems related to your industries that water permits may 
be an obstacle to getting those shovel-ready projects up and 
running.
    I just would like to hear from any of you if you have seen 
any activity from either the Army Corps or EPA to expedite 
permit applications for Recovery Act projects. Yes?
    Mr. Schellenberg. Well, I have not seen anything from the 
EPA or from the Corps to expedite permits. And this is a major 
concern. Even though plans may be ready for projects and they 
may be ready to go, if you don't have those permits, you're not 
moving ahead.
    That's why a lot of people see paving projects because they 
can do paving projects that don't require permits. But the 
utility work and stuff like that, a great majority of those 
projects, at least out in Oregon, do require those permits.
    And so the shovel-ready for a lot of stuff, it just doesn't 
happen because of the permits. Even though the plans are 
sitting there, the projects are ready to go, the permits are 
delaying them.
    Chairwoman Velazquez. Any other witness who would like to 
comment?
    Mr. Pebley. I would just like to comment on that. In the 
State of Texas, we have not seen that many dollars come out of 
the stimulus package yet. There were some highway projects that 
have come out that Mr. Schellenberg brought up that were 
basically repaving existing roadways because they were quick 
and easy and didn't require any permits.
    In the past, we have had some bridge projects where we had 
contracts signed, we were told to go to work by the State of 
Texas, we go to mobilize out there, and then they realize, oh, 
we don't have a 404 permit or we have applied for it, but it 
hasn't come back yet. So our whole operation stops, waits for 
the Corps to issue the permit, which they typically aren't in a 
real big hurry on that because they're dealing with a state 
agency and sometimes there might be some turf issues. And we 
were left holding the bag with 15 guys standing around trying 
to do a project.
    So it has been an issue in the past. Yes, ma'am.
    Chairwoman Velazquez. I recognize the Ranking Member. Thank 
you.
    Mr. Graves. Thank you, Madam Chair.
    Each of you kind of just briefly touched on the litigation 
aspects as a result. What I am talking about is third party 
litigation if some of the proposals out there for the Clean 
Water Act were implemented.
    Could you tell me from your perspectives, each of you--and 
we'll start with Mr Kruse. Can you tell me how you see third 
party activist groups, at least the litigation from them, 
increasing if this were implemented and what that is going to 
mean to agriculture and small business in the future?
    Mr. Kruse. I think that is one of the greatest concerns we 
all have. And I would refer back, Congressman Graves, to a 
comment you made during your opening comments about farmers and 
ranchers striving to be good stewards of the land. And I think 
that, without a doubt, is something that we all strive to do is 
take care of the land that we are temporarily empowered to take 
care of.
    I think the worst case scenario--and I think this would 
indeed happen, and some of the panel members have already 
maintained it--you know, if the word ``navigable'' is taken out 
of the Clean Water Act, then we're talking about every pond, 
every lake, every stream, every puddle, ephemeral areas, which 
are areas where after a rain, water may stand temporarily and 
then go away. And so you might have an area where water might 
stand after a rain for a few days a year and be dry the 
majority of the days of the year. But that would be under the 
jurisdiction of the federal government.
    And, you know, I can see a scenario which we see all the 
time where an attorney shows up and representing a client. And 
thousands and thousands and thousands of dollars later and much 
time and agony, you could well almost be without a farm or a 
ranch after trying to defend yourself because of a third party 
lawsuit.
    And, you know, I think the fear we all have is whatever the 
intent of Congress might be, the courts will probably end up--
if the word ``navigable'' is taken out of this, the courts will 
end up deciding what is going to happen and what our fate is 
going to be. And that is not something we really want to think 
about.
    Mr. Graves. Mr. Pebley?
    Mr. Pebley. Thank you.
    I have the same concerns that Mr. Kruse has on the word 
``all,'' instead of ``navigable.'' In my testimony, I mentioned 
basically groundwater. We install water lines, sanitary sewer 
lines, and don't expect many of you members of Congress know 
this unless you are in the business where most people can--but 
there is typically groundwater everywhere.
    And in some locations, you know, like in my home city, you 
can go down eight feet. And you can hit groundwater. And it is 
not a rushing water, but it is water that seeps in.
    And in order to keep our excavation safe and keep the 
project moving forward, we have to pump the water out of that 
excavation and then put in a suitable backfill and then place 
the pipes in there.
    Under this rule, that groundwater, whether I know it is 
there or not, I have to get a 404 permit. So I could be going 
along at the start of my project, and the ground is perfectly 
dry. And I come up to an area where there is groundwater coming 
in because there is no amount. It just says, ``all waters.''
    And if I have to start pumping it, then I have to shut 
down, get a 404 permit, and I don't know how far that 
groundwater is going to go. It could go for the entire length 
of the project or it only may go for 100 feet or so.
    So this opens up a huge, huge issue, especially in our 
market, for this issue. And I think it is something that is 
completely unattended by the word of inserting ``all,'' instead 
of ``navigable.''
    And any third party who could be driving by and they see a 
pump running in an excavation could lead to asking where is 
your 404 permit. And I see that as a very, very dangerous 
situation for all of us.
    Mr. Graves. Mr. Chilton?
    Mr. Chilton. I am a victim of third party lawsuits. Our 
ranching operations have been affected by four separate 
lawsuits filed by the Center for Biological Diversity. The 
Center for Biological Diversity, standard operating procedure 
sues the federal government, in three cases the Forest Service, 
in one case the BLM, Bureau of Land Management. They accuse the 
Forest Service or BLM as having not done something. In three of 
the cases, it was properly consult with the U.S. Fish and 
Wildlife on endangered species.
    The problem is the Center for Biological Diversity 
submitted information in our case that was not even true. They 
were lies. They were misrepresentations.
    I got so angry because of being a victim of a third party 
lawsuit that I sued the Center for Biological Diversity for 
libel, misrepresentation, and plain lying. And the jury came 
back and said 10 to 0 the Center for Biological Diversity was 
guilty, 9 to 1 that they awarded me $100,000 in damages, 9 to 1 
that they gave me $500,000 punitive damages, punishment for the 
Center lying about us.
    And it is just really awful as a citizen of the United 
States to have your ranch and farm and you are being a good 
steward--and I have gotten all kinds of environmental awards 
for being a good steward. It is really, really awful to have a 
radical environmental group sue the government and they are 
really after you. They are suing the government to get rid of 
me.
    And as a citizen, it is just upsetting. You roll over and 
roll over at night. You get angry. And it is just awful. Why is 
a citizen of the United States put through such horrible, 
horrible circumstances? I really object. It is just awful, 
these third party lawsuits.
    Mr. Graves. Mr. Gray?
    Mr. Gray. Yes, Congressman Graves. I certainly agree. I 
can't add too much to what has been stated, although I would 
add a point. We had a dairy producer in my home county, Cayuga 
County, who was sued on a nutrient management issue by a third 
party. This lawsuit went on for almost 10 years. And the dairy 
producer won it in the end. It got some of the money back that 
they had put in the legal fees. No question this issue will 
spur more lawsuits.
    You can imagine having that hanging over you for that 
length of time. I mean, really, justice delayed is justice 
denied. And I can't believe that this won't increase litigation 
by third party litigation much, much greater.
    Mr. Graves. Mr. Schellenberg?
    Mr. Schellenberg. Yes. Mr. Graves, you know, one of the 
things that Armadillo does is we do a lot of culvert 
replacement and remediation work for both the highways as well 
as the railroads. And quite often we are working under the 
existing Clean Water Act and have all the permits.
    And people come out. And they are opposed to you fixing 
existing culverts and infrastructure of these important 
railroads and highways. If we don't fix those things, what 
happens is you get a washout on the railroad or highway, you 
have got far greater damage downstream. So people are opposed 
when you are doing things right.
    Now you take that further and you move it. You expand that 
out. You have got puddles. You have got this and that. 
Especially in Oregon, you know, I can see significant people 
coming here from groups, coming forward, just trying to stop 
urban growth, just trying to stop anything that ``not in my 
backyard'' type of things.
    And they are going to say, ``Now we have a vehicle that we 
can use. We are going to say this is a wetland.'' We can use 
that to prevent any kind of necessary infrastructure that we 
need in our communities.
    Mr. Graves. Thank you.
    Mr. Chilton. May I add one more comment?
    Mr. Graves. Real quick, yes.
    Mr. Chilton. The people who sue under third party lawsuits 
often then collect money from the U.S. Government under the 
Equal Access to Justice Law. So it is a cottage industry. It is 
an industry to sue the government and then collect money. This 
is wrong. This is not a democracy. The Federal Government ends 
up paying for their suing.
    Mr. Graves. Chair--
    Chairwoman Velazquez. Ms. Kirkpatrick.
    Ms. Kirkpatrick. Thank you, Madam Chairman. My question is 
for all of the panelists. I have strong concerns about the 
potential reach of the Clean Water Restoration Act, and I want 
to know your opinions. Do you think our current practice 
sufficiently protects our nation's water interest, or is there 
a role for expanded jurisdiction if it stops short of removing 
navigable waters from the definition?
    So I will start with Mr. Schellenberg and then just work 
down. I would like to know your opinions about that.
    Mr. Schellenberg. Well, we would like any changes that are 
made, if they are made, we would like them to be very clear and 
concise, so they are easy to understand. And that is not the 
case that typically happens in Government, so we--you know, we 
would only support something if it was very clear and concise. 
And without knowing what it is we are agreeing to, we really 
can't agree to it. But I think leaving ``navigable'' in there 
is very good.
    Thank you.
    Mr. Gray. I think it probably takes more work on the part 
of the Corps and EPA, because the word ``navigable'' is in 
there. But I think that is good, because then you make a 
determination that is more comprehensive. When you take that 
out, then I just think you are going to--there is nothing to 
really be sort of the anchor as to how you make those 
determinations. So I think that it is very critical that it be 
left in.
    Mr. Chilton. Thank you. That was a very good question. 
Bureaucrats over time expanded the original intent of the 
legislation. In the Clean Water Act, they have expanded since 
1972 the concept that even my dry lands are part of the waters 
of the United States. So that is a real problem.
    Why can't the Corps of Engineers, if they think there is a 
problem, identify the problem and work with the landowner about 
the problem, come to an agreement, for what might be done in a 
specific spot in a particular state, and then with the help 
perhaps of grant money, solve that particular problem, in 
contrast to throwing a net across the whole of the United 
States to regulate as contemplated by the expansion of the Act.
    Mr. Pebley. As an elected official who is in charge of 
water and wastewater for the city of McAllen, you know, I am 
all for clean water. I think it is--we pump our water for the 
citizens of McAllen out of the Rio Grande River, which shares a 
border with Mexico. So, you know, I want to make sure that the 
water that we are pumping out of that river is as clean as 
possible, and not only reduces the costs of purifying the water 
for the citizens, but also just ensures their safety and that 
they are getting a good product.
    So I think it is very important that the word ``navigable'' 
be left in the current role as it is, and that ``all'' should 
not be used to replace it. I think it would be very important 
for Congress to encourage and oversee the administrative 
rulemaking with the EPA and the Corps of Engineers jointly as 
was recommended by the Supreme Court in the Rapanos case, in 
order to try and get more clarity and consistency for all 
people.
    Mr. Kruse. I think there is logic for the Federal 
Government to have oversight on navigable waters. And of 
course, as we all know, in 1972 when the Clean Water Act was 
written that is what it said. The courts have taken some 
liberty, as we know, and they have been mentioned here today, 
in expanding that. I believe, and it is just an opinion, but I 
think the intent, if we go back to '72, was ``navigable 
waters.''
    And so it is a concern to see some of the things that have 
occurred. But I think there is no logic in removing the word 
``navigable'' and giving the Federal Government jurisdiction 
over every drop of water, theoretically, that exists, including 
little puddles that develop after a rain.
    We all--I know you all hear all kinds of horror stories 
about the overreach of the Corps and the EPA, and we certainly 
hear them and live them every day. And I agree with Mr. Pebley, 
I think it is very important for you all to make sure that your 
intent is very present in the rulemaking. And, you know, I know 
that sometimes you all get frustrated by the overreach of the 
government bureaucracy and going beyond what your intent is. 
But this is a clear case where we really need to have a clear 
intent, and we need to keep the word ``navigable.''
    Chairwoman Velazquez. Time has expired.
    Ms. Kirkpatrick. Thank you. Thank you, panelists.
    Chairwoman Velazquez. Mr. Schock.
    Mr. Schock. Thank you, Madam Chairwoman. Thank you for 
having this hearing today to find out firsthand from those in 
the industry how this will affect your respective roles. I have 
a number of questions.
    Mr. Kruse, on behalf of the Farm Bureau, as the Farm Bureau 
President, you talk a little bit about some instances that you 
are aware of folks that have applied for a 404 permit in the 
past. Before we get to that, I guess I want to make it clear 
who is charged with overseeing who has jurisdiction with all of 
the non-navigable waters in your state, or in all states?
    Mr. Kruse. Well, that varies from state to state. In our 
state, it is our Department of Natural Resources, and the NRCS 
within USDA have some oversight role to play in that.
    Mr. Schock. So each state basically is in charge of 
overseeing and protecting those natural waterways, be it a pond 
or a lake or a stream, that do not have a, let us say, natural 
impact.
    Mr. Kruse. Yes, sir. That is correct.
    Mr. Schock. Okay. So it is not as though these waterways 
are not being protected. It is not as though no one has 
jurisdiction or oversight or is looking out for the protection 
of these waterways.
    Mr. Kruse. Yes, sir. That is correct, and that is a very 
important point.
    Mr. Schock. That is important to point out.
    Mr. Kruse. Yes, sir.
    Mr. Schock. Second, you did mention those farmers who have 
applied for 404. Remind me again how much was spent between 
mitigation and the legal work, and so on, for those that have 
applied for a 404.
    Mr. Kruse. Well, it can vary. You know, the costs can go up 
into the hundreds of thousands of dollars. One instance I cited 
was a farmer who wanted to improve 11 acres of his land, and he 
did go to the NRCS and USDA.
    Mr. Schock. And how long did that take?
    Mr. Kruse. Well, it took almost two years, and then he 
finally, when he found out that the Corps was going to make him 
mitigate this with--mitigate the 11 acres with 17.7 acres, and 
all the expense that was going to be incurred, he finally just 
threw up his hands and said, ``I can't do it. It is just--it is 
going to cost me more than the land is worth.''
    Mr. Schock. So it cost him a couple hundred thousand 
dollars, a few years of his time, and the end result was 
nothing. And basically, he couldn't move forward on the 
project.
    Mr. Kruse. Yes, sir. And I think in this case he didn't 
spend--it can cost well over $200,000, but I think he stopped 
the process before he spent that amount of money, because he 
just--when the Corps told him he had to have a permit, he had 
to mitigate it, he just said, ``I can't justify the expense.''
    Mr. Schock. Okay. Thank you very much.
    Mr. Schellenberg on behalf of National Utility Contractors 
Association, you also detailed some of the problems with the 
permitting that would be required. I guess my question to you 
is, given the additional permitting that would be required, can 
you see instances where your utility contractors, rather than 
do the work, would turn away work simply because of the number 
of years that would be required to get the necessary permitting 
to do the work?
    Mr. Schellenberg. I think--I am not sure we would turn away 
work, but we would look at it differently. It is certainly 
going to be--going in, if you know it is going to take--you 
know, you are bidding a job here, and you are not going to get 
to do it for a couple of years, it makes it harder to bid, 
because you are calculating things in the future, you are going 
to have to allow for that.
    But those are the things that--it is going to make things--
every project is going to become much more expensive. And if it 
gets changed, if ``navigable'' gets taken out, I know in Oregon 
it is just going to open it up that everything is--those delays 
are going to be just astronomical for all kinds of projects.
    Mr. Schock. So while you will be happy to do the work, it 
might take a few more years before you get to do it, and it 
will cost the consumer more money.
    Mr. Schellenberg. Right. You might have a $10,000 project, 
but it might take you two years to do it, you know, so you are 
going to have to have a little more money for--I mean, because 
some projects are big, some projects are small, so--
    Mr. Schock. Sure.
    Mr. Schellenberg. --there is a lot of variation there, but-
-
    Mr. Schock. It is not exactly something we want to do while 
we are trying to stimulate the economy?
    Mr. Schellenberg. It is not what we want to do as we 
stimulate the economy.
    Mr. Schock. Thank you.
    Mr. Chilton, on behalf of the Cattlemen's Association, I, 
too, share your frustration with frivolous lawsuits. But my 
question to you is really about your farmland. You said it was 
your greatest asset. And I guess my question is, how do you see 
removing ``navigable waterways'' from this legislation 
impacting the value of your farm ground?
    Chairwoman Velazquez. Mr. Schock, I am afraid the time is 
expired.
    Mr. Schock. Okay.
    Chairwoman Velazquez. And we have other members, and there 
will be a vote on the floor today.
    Mr. Ellsworth.
    Mr. Ellsworth. Thank you, Madam Chair.
    Thank you, gentlemen.
    Mr. Chilton. May I submit that answer to the record?
    Chairwoman Velazquez. Sure.
    Mr. Chilton. Okay.
    Chairwoman Velazquez. Without objection.
    Mr. Ellsworth. First, let me say, Mr. Kruse, that Don 
Villwock called me and said trust anything you say. So I will 
take that to heart. And let me say that, first, I agree that 
``navigable'' should be left in there. And my question would 
be--I know this document from '77, I think the Clean Water Act 
was probably at least 10 or 11 pages long.
    What do you think by the proposed removal of ``navigable'' 
that those rogue bureaucrats were trying to--what do you think 
they are trying to achieve, the folks on the other side of 
this, by picking that one word out of that document that--is 
there this attempt to control every little pebble, every little 
pond, every little ditch, every little stream, that they want 
that jurisdiction, and that responsibility to control that?
    Mr. Kruse. Well, Congressman Ellsworth, I will certainly 
pass along to Don Villwock that I appreciated his comments. He 
is a dear friend.
    Mr. Ellsworth. Great guy.
    Mr. Kruse. I can only believe that the intent is to 
dramatically expand the reach of Federal Government agencies in 
a way that I believe will be very harmful to farmers and 
ranchers and small business people, both in terms of cost, 
which ultimately will be passed on to the consumer, and in 
terms of--as we have talked here today, in terms of time that 
it takes to complete some of these.
    It is really frightening to think that any pond in the 
State of Indiana or Missouri or any other state, with the word 
``navigable,'' with one word taken out, which appeared I think 
80 times in the Act, but that then the Federal Government is 
going to have jurisdiction over a pond that some individual 
built, and that some individual owns on their own land.
    That is a very, very frightening thought, and it is just--
it can only--to your question, it seems to me it can only mean 
that there is a real desire to just continue the encroachment 
of jurisdiction by the Federal Government agencies.
    Mr. Ellsworth. Let me ask one more thing, and this may seem 
a little off subject. I was a sheriff in my former life, and so 
I probably felt I was the victim of frivolous lawsuits from 
inmates as much as anybody in the room. If I can go down the 
line, just a yes or no, how many of you have hired an attorney, 
been listed as a plaintiff on a lawsuit, or hired an attorney 
to initiate a proceeding? You can just--have you ever--down the 
line, yes or no.
    Mr. Pebley. Yes.
    Mr. Chilton. Yes.
    Mr. Ellsworth. I see four yeses, and Mr. Kruse shakes his 
head no. So just curious how many--I know we talk a lot about 
lawsuits, and four out of the five have initiated some kind of 
plaintiff and hired a lawyer to initiate something.
    Thank you. I would yield back.
    Chairwoman Velazquez. Time is expired.
    Mr. Thompson.
    Mr. Thompson. Thank you, Chairwoman and Ranking Member, for 
holding this important hearing. I want to--I have an opening 
statement I will go ahead and submit for the record.
    Chairwoman Velazquez. Without objection.
    Mr. Thompson. Okay. Thank you. So we can get right to the 
questions here.
    Mr. Kruse, in your testimony I was struck, you mentioned 
that expanding the scope of the CWA would sweep many forestry 
activities under its regulations. I have Allegheny National 
Forest in my district, 513,000 acres. It is an economic engine, 
or it has been. Could you elaborate on specifically how 
forestry might be affected?
    Mr. Kruse. Yes, sir. I think if we take the word 
``navigable'' out, if the word ``navigable'' were taken out of 
the Clean Water Act, that is going to have, in my judgment, a 
serious impact on any type of livestock, row crop, or forestry 
operation, because currently, if you take a 100-acre tract of 
timber, and you are going to find--after a rain, for example, 
you are going to find standing water in the areas of that 
timber, that goes away in a day or two. Currently, that is, as 
you know, not under the jurisdiction of the Corps of Engineers 
and EPA. If the word ``navigable'' is removed, it will become 
that.
    And I think Mr. Pebley made a really good point a while 
ago, it would apply to forestry. If you are going about your 
business and all of a sudden you discover water in a place that 
you didn't realize it was going to be, you have a serious 
problem on your hands if the word ``navigable'' is not in 
there. And don't get me wrong, I don't think any of us would 
say that the Clean Water Act is perfect with the word 
``navigable'' in. We are just saying it would be really scary 
if it were not in there.
    Mr. Thompson. A whole lot worse. You know, I mean, my--the 
ANF, we have issues now with, as I think Mr. Chilton described, 
radical environmentalists who do nuisance lawsuits for 
different reasons. Most recently we had the Sierra Club and 
some others that shut down oil and natural gas drilling for--on 
presumed environmental issues that really weren't out there.
    So what is your impression in terms of the standing water, 
then? It seems like the standing--that this mud puddle, then, 
would provide an excellent motivation for radical 
environmentalists to file nuisance lawsuits? It would just, you 
know, wreak havoc on our economy.
    Mr. Kruse. Absolutely. Without question. And a small ditch, 
a little stream, any water. Someone mentioned a while ago 
gutters. I mean, any place water exists, without the word 
``navigable,'' I mean, theoretically, and I think practically, 
the Corps and the EPA are going to try to regulate it.
    Mr. Thompson. And not a question, but an observation. Mr. 
Chilton, you talked about the government paying these lawsuits. 
That is what happened in my congressional district with that 
forest. The Forest Service--no court handled the case, and the 
Forest Service voluntarily paid all of the court costs for the 
Sierra Club.
    Mr. Gray, good to see you again. You are all over the 
place, and that is a good thing. Dairy farmers, as you know, in 
both my home State of Pennsylvania and nationally, are severely 
struggling. It seems to me that changing the definition will 
only cause additional unnecessary costs to an already 
struggling industry. Would you agree with that statement? And 
where do you see those costs--what will those costs do to our 
dairy farmers that, you know, on the average I think they have 
not large operations, about 125 heads, something like that.
    Mr. Gray. Right. Well, I agree. Absolutely. I mean, I don't 
know how they would pay for litigation costs today. They can't 
pay their feed bills. We have got farmers in the northeast that 
are using generators to run their farms today, because their 
electricity has been cut off. That is what the situation is.
    I can't imagine what a dairy farmer would do if they were 
litigated by third party on a waterway. They wouldn't be able 
to deal with it, because the money just isn't there. So it 
would have a huge economic impact, particularly right now.
    Mr. Thompson. How about the mitigation costs? Even if it 
doesn't get--you don't get a frivolous lawsuit, you have 
permitting costs, I heard consultant costs--
    Mr. Gray. Right.
    Mr. Thompson. --and mitigation costs.
    Mr. Gray. It is just something that they couldn't pay for 
right now, and so that would just add undue economic burden.
    Mr. Thompson. Can you just--we don't have much time. Can 
you give me some brief specific examples of how changing the 
definition would affect dairy farmers in particular.
    Mr. Gray. Well, changing it, yes. I added a couple of quick 
things before, and that is in ditches and in sod waterways and 
places where we normally do conservation practices on the land, 
so that we can get better drainage, and so forth, changing that 
definition, taking ``navigable'' out of there, could affect 
those kind of conservation practices, which are done to reduce 
soil erosion and nutrient runoff, and yet they could become 
expanded jurisdiction over those kind of practices and lands of 
that type.
    Chairwoman Velazquez. Time is expired.
    Ms. Halvorson.
    Ms. Halvorson. Thank you, Madam Chairwoman.
    Thank you all for being here. And like many of the other 
people that serve on this Committee, I also serve on 
Agriculture. So this is something I hear about quite often. And 
when I go back home and talk to the people on my advisory 
committee and many of my farmers, this is something that I hear 
the most is about the ``navigable.'' And I just gave a speech 
just Monday to the chemical and fertilizer people in CropLife, 
and, again, this is something.
    With all of this being talked about, I am curious, how did 
this happen in the Senate? Is it not talked to the Senators 
like it is to us? Does anybody want to answer that? I guess I 
am just curious--
    Mr. Chilton. I would try. I don't know, but I suspect that 
the environmental groups in this nation are thirsting for more 
power, and they have effectively lobbied the Senate to take out 
of Committee this S. 787. And our two Senators from Arizona 
were opposed.
    Ms. Halvorson. Okay. Thank you, Mr. Chilton.
    A few other questions. Mr. Kruse, if you can maybe help me 
here, do you think the definition of ``navigable,'' that is 
also something that I guess I hear from different people. Some 
people's definition of ``navigable'' is different from all of 
your definition of ``navigable.''
    Now, I agree with all of you we don't want to open a 
Pandora's Box, and we don't want anybody encroaching on your 
property, which is your rights. There is already a backlog. 
First of all, who--if anybody wants to give me their definition 
of ``navigable,'' which maybe we shouldn't, because we have 
already heard, that you think every pond, even if it is only 
there for a couple hours a year, would be part of--if we took 
it out.
    Who would then be able to do this, if we have already got a 
backlog of 15- to 30,000 permits? I mean, who would enforce 
this? And do think that this is just a slippery slope because 
the EPA wants to take over more jurisdiction than you think 
they should have?
    So if I could just start with Mr. Kruse, and if anybody 
else wants to answer that, it is probably about three or four 
questions and we don't have that much time. But basically it is 
about the slippery slope, EPA, and the definition of 
``navigable,'' and how do we even--
    Mr. Kruse. I think you make an excellent point, because the 
backlog is horrible now. And, as you say, if we remove the word 
``navigable,'' the backlog will be unconscionable. I think as 
we have talked here today it will open the door to third party 
lawsuits like we can not even believe. It encroaches on private 
property. It is just totally void of common sense.
    And I think we would all agree that there is logic, as I 
said a moment ago, in the Federal Government having oversight 
of real navigable waters. And I think our definition of 
``navigable waters'' would--we could all get together and come 
up with a pretty clear definition. As I said a moment ago, the 
courts have kind of stretched that out a little bit, but we are 
all just very frightened about what may happen and probably 
without a doubt will happen if the word ``navigable'' is 
removed.
    Ms. Halvorson. If anybody else wanted to speak on that.
    Mr. Chilton. I would like to. I think that ``navigable,'' 
as the U.S. Supreme Court referred to it, is the best approach 
in the Rapanos decision.
    Ms. Halvorson. The one where it talks about even ponds and-
-
    Mr. Chilton. There has to be a nexus between a navigable 
river and the water in question.
    Ms. Halvorson. Correct. Correct.
    Madam Chairwoman, I yield back.
    Thank you very much, panelists.
    Chairwoman Velazquez. Mr. Gohmert.
    Mr. Gohmert. Thank you, Chair. Appreciate it.
    Appreciate all your testimony. This is quite a problem, and 
certainly in East Texas where I am from we have experienced the 
problem. We have seen rivers and creeks flood, and then 
immediately here come all of the federal bureaucrats say, 
``Whoa, this is wetlands now. You can't do anything.''
    And have any of you guys had property that flooded, and you 
were told it is now wetlands and you can't use it for anything? 
None of you have any wetlands on your property?
    Mr. Gray. There is probably examples of that, Congressman, 
but I don't--you know, in the farmers that I deal with, but I 
would have to ask them.
    Mr. Gohmert. Well, didn't one of you say you had some 
wetlands on one of your property? Yes, sir. Mr. Kruse.
    Mr. Kruse. I have prior converted cropland that--in other 
words, as you know, land that I farm that is just great 
farmland, but at one time--I live in the very southeast part of 
Missouri, the ``Bootheel'' they call it, and at one time it was 
all swampland. And it was cleared and drained, and now it is 
the start of the Mississippi River delta, so it has got--it is 
great farmland, as Congressman Graves said.
    But part of my farm in different areas of several fields is 
identified as prior converted. You would never know it walking 
over it, but, you know, one of the concerns that not only I but 
so many landowners have is what may happen if we change the 
Clean Water Act, because, you know, it has been very clearly 
codified that prior converted is not under the jurisdiction of 
the Clean Water Act. And there is a real concern about what 
might happen if we change that.
    Mr. Gohmert. Right. Do none of you know people that have 
had water end up standing either by Beaver Dam that was--later 
had federal officials come in and say, ``That is now something 
we will regulate. You can't use it''? Surely you all know of 
people that have had that happen, correct? I am getting some 
nodding heads. Yes, sir.
    Mr. Chilton. I know of a company that had a major 
manufacturing facility, and their cooling system, their air 
conditioning system, was such that it, as all systems, 
condenses water. Instead of putting it in the sewer, they piped 
the water out into adjacent property. And then, the Fish and 
Wildlife and I think the Corps of Engineers came along and 
said, after four or five years, ``Oh, you have got a wetland,'' 
and then wouldn't let them build on an addition to the factory 
that would have created jobs and wealth.
    Mr. Gohmert. Well, thank you. And that is exactly where I 
am going. You know, you have talked--we have talked about 
shovel-ready projects. But if we eliminate the word 
``navigable,'' then some of these shovel-ready projects that 
were going to provide jobs, which puts food on the table and 
puts taxes in the coffer so we in Washington can squander it 
like we have been lately, all that comes to a stop because 
``navigable'' has been put in legislation that starts creating 
permits that weren't previously there.
    So that is something that hits me. And as an aside, you 
know, after Hurricane Katrina, and based on the experience we 
have had in East Texas with rivers flooding and all of the 
federal officials saying you can't use it anymore, I kept 
wondering when some--one of those federal officials was going 
to run into New Orleans and say, ``Whoa, this is all wetlands. 
Nobody can touch it. And see these high-rise hotels? We may 
lease those out as multi-level duck blinds next year.'' But 
nobody ever did that, and it just seemed to be a real conflict 
in the way people were treated.
    But, Mr. Pebley, I was curious, as I understand you were 
proposing the rulemaking process to clarify the federal limits 
of our waters, rather than legislation. When it comes to 
legislation, you can vote me out if you don't--I mean, 
constituents can, if they don't like what we put in 
legislation. But on the rulemaking, you can't really touch the 
federal rulemaking bureaucrats. Why would you prefer rulemaking 
over just fixing it right the first time in legislation?
    Mr. Pebley. Where I come from on that is we know what we 
have right now. We know what the current law is. We know where 
the pitfalls are in that law. And with Congress overseeing and 
working with the EPA and the Corps to establish good 
administrative rulemaking through input by ourselves and other-
-
    Mr. Gohmert. Is that an oxymoron ``good administrative 
rulemaking''? It just sounds like there is a conflict there. 
Well, I understand your position, and my time has run out. But 
I have real concerns when we don't make it clear in legislation 
and leave it to bureaucrats you can't touch when they screw up.
    Thank you. I yield time.
    Chairwoman Velazquez. Time is expired.
    Mr. Westmoreland.
    Mr. Westmoreland. Thank you. I am sorry. Parliamentary 
inquiry, Madam Chair.
    Chairwoman Velazquez. Yes? The gentleman can state his 
parliamentary--
    Mr. Westmoreland. Are we going to have several rounds of 
questioning?
    Chairwoman Velazquez. In consultation with the Ranking 
Member, we are going to have one round of questioning. But I 
always, always--you know, Mr. Westmoreland, I don't know where 
you are coming from. Here we are dealing with a very important 
issue, and you know that this Committee is run in a bipartisan 
way.
    Mr. Westmoreland. Absolutely.
    Chairwoman Velazquez. So if you need extra time in a second 
round, I will grant it to you.
    Mr. Westmoreland. So, but you said we are only going to 
have one round?
    Chairwoman Velazquez. If you haven't finished with your 
questioning, I always ask, before we conclude our proceedings, 
if there is any member who wishes to ask any more questions. So 
I am going to give you your five time period, in consultation 
with the Ranking Member. It has always been the tradition of 
this Committee, and under Rule 6 of the Small Business 
Committee, I have the authority, in consultation with the 
Ranking Member. It has always been like that. But if you--
    Mr. Westmoreland. So are you--
    Chairwoman Velazquez. --need extra time, I will grant the 
extra time to you.
    Mr. Westmoreland. Well, just another parliamentary inquiry, 
Madam Speaker.
    Chairwoman Velazquez. Yes.
    Mr. Westmoreland. So are you saying Rule 6 of the Committee 
overrides the House rules?
    Chairwoman Velazquez. No, it is in concert with the House 
rules.
    Mr. Westmoreland. Okay. So you are saying it is in 
conjunction with that, or you are--
    Chairwoman Velazquez. Correct.
    Mr. Westmoreland. --acting within the House rules. So 
Clause 2J of 2A of Rule 11 of the House rules permits me to ask 
each member of the panel to have five minutes of questioning 
for each one of those members. Are you saying that the 
Committee rule will override the rules of the House?
    Chairwoman Velazquez. The Committee rules--the Committee 
rules give me the authority, with the Ranking Member--
    Mr. Westmoreland. To override--
    Chairwoman Velazquez. --so that we can--
    Mr. Westmoreland. --the House rules?
    Chairwoman Velazquez. --give an opportunity to every 
member. How long have you been in this Committee? And how long 
have you been in Congress?
    Mr. Westmoreland. This is my third term, but I don't know 
that that has anything to do with the--
    Chairwoman Velazquez. You were in the majority--when you 
were in the majority, did you ever raise this issue?
    Mr. Westmoreland. No, the--
    Chairwoman Velazquez. To give every member five minutes to 
question every--
    Mr. Westmoreland. No, ma'am, I didn't, because I never had 
an opportunity. But let me explain to the Chair Lady, it 
doesn't matter how long you have been in Congress, if you have 
been here one day or 20 years, the rules are the rules. And so 
that does not have any effect on how the rules are applied or--
    Chairwoman Velazquez. The gentleman is being recognized for 
five minutes.
    Mr. Westmoreland. Well, and I thank the gentlelady for 
that.
    Mr. Chilton, just to give you some other things to look 
forward to, if you think the Clean Water Act, which I believe 
the gentle Chair Lady was an original co-sponsor of, that would 
be H.R. 2421, that was introduced last year with 166 Democratic 
co-sponsors and 10 Republicans. But if you think taking 
``navigable'' out of the Clean Water--wait until you get some 
information on Mr. Cass Sunstein, who is the President's 
nominee for the Office of Information and Regulatory Affairs.
    He believes that livestock, wildlife, and pets have legal 
rights to file lawsuits. So if you think a third party lawsuit 
coming for a water issue is a problem, wait until your cows 
start suing you.
    My question to each one of you I guess is, how clean is 
clean? Mr. Kruse, we will start off with you.
    Mr. Kruse. Well, I think, as has been stated by many of us 
today, and, again, Congressman Graves mentioned this in his 
comments, whether you talk about clean water or clean air, or 
whatever, I have always believed as a fourth generation farmer-
-in fact, my dad will be 99 years old in September, and from 
the time I was a little boy he continued to lecture me, ``Son, 
you want to leave this farm in better shape than you took it 
over.''
    And so if we are talking about water, you know, we are 
concerned about the overreach of the Federal Government by 
taking the word ``navigable'' out. By the same token, we in no 
way, none of us here, are saying that we want to disregard 
trying to do everything we can to make sure our water is clean, 
our air is good, the soil is good.
    Most farmers and ranchers live on the land they care for. 
Their children and grandchildren run on the land and drink the 
water and breathe the air. So it is important to be good 
stewards of the land and the water and the soil. But at the 
same time, I think you have to strike a balance and have some 
common sense. And the fear that we have all expressed here 
today is the fear of taking the word ``navigable'' out of the 
Clean Water Act and what that could portend down the road.
    Mr. Westmoreland. And you have made reference to some of 
the instances that you would have, such as a pothole or a 
prairie hole, so to speak, where maybe an animal or a deer has 
gone and tried to dig up some salt or whatever that creates a 
hole. In that same piece of legislation--and I think Mr. 
Chilton referred to this. It mentions anything that would 
affect the water.
    So if you were going to fertilize your land, that could 
require a 404 permit, could it not?
    Mr. Kruse. Yes, sir. I think you are exactly right. If you 
were going to spray a herbicide, that could conceivably require 
a permit.
    Mr. Westmoreland. And the Corps of Engineers, you know, I 
wish--it would have been very appropriate today, I think, to 
have somebody from the Corps on a separate panel or somebody 
from the EPA on a separate panel, so we could have questioned 
them about some of these things, because I would like to hear 
the Corps' response to a question about, how long would it take 
them to review 404 permits for every farmer that wanted to 
fertilize his pasture, or wanted to spray some herbicide, or 
wanted to turn some soil over, or somebody might want to create 
a food plot for wildlife, or whatever.
    Those things would be involved in that process, if this 
legislation passed where the language said anything that affect 
water--and because, of course, the word ``navigable'' out of 
it, it would be any water, is that not true, Mr. Kruse?
    Mr. Kruse. Yes, sir. That is exactly the way I see it.
    Mr. Westmoreland. Thank you.
    And, Mr. Chilton, I hate to keep coming back to you, but, 
you know, you talked about the lawsuits from the third party. 
Do you realize that your Federal Government funds a lot of 
those environmental groups that file suit against the 
government?
    Mr. Chilton. That is correct. The Center for Biological 
Diversity, in 2003, received $900,000 from the Federal 
Government from suing the Federal Government. That is in their 
financial statements.
    In terms of your question on clean water, I am very proud 
to say that we hired a hydrologist from the University of New 
Mexico to come do a hydrological study on our ranch, and he 
found that we have so much grass and take such good care of our 
ranch that the natural erosion was far below what would be 
expected in a normal circumstance.
    We use no pesticides, we use no other products, except we 
have native grass. And so our water is clean, except sometimes 
there is a little mud in it. And it never goes anywhere. 
However, if I wanted to put insecticide on my farm, or if I 
wanted to fertilize the farm and I had to wait two years, what, 
313 days for a nationwide permit, I mean, that is totally 
ridiculous.
    Chairwoman Velazquez. Time is expired.
    Mr. Chilton. Thank you.
    Chairwoman Velazquez. Mr. Luetkemeyer.
    Mr. Luetkemeyer. Thank you, Madam Chairman.
    It is interesting, I think we probably have more common 
sense on this panel today than we have in all of EPA and Fish 
and Wildlife put together. It is interesting to listen to your 
comments, and I certainly appreciate all of your efforts today. 
It was--it is great to listen to some common sense. It is 
really neat.
    With regards to some of the Clean Water stuff, or some of 
the navigable stream stuff we are talking about, I think we are 
already there, gentlemen. I can give an example in my district. 
I have a gentleman who went out and tried to do a little 
something with a wet weather creek. In other words, in Missouri 
where I am from, you know, we have a lot of little ditches and 
what have you. And, you know, water is in it about, you know, 
10 days out of the year, and the other 355 days a year it is 
dry.
    And so he tried to do something with it to clean it up, and 
he got fined $16,500 by the EPA. We are already there. In fact, 
we are already past that point, because now what is he going to 
do? As a result of this fine, he is not a wealthy man. How can 
he offset this? He has--we have got the full force of the 
government sitting here trying to sue him, and he has no 
ability to go back if he wants to fight it. And he could, 
because he has a legitimate suit. But he said, ``I can't afford 
this. I am going to settle the fine, if I can negotiate it 
down.''
    The practice of intimidation by the government is out 
there. It is there today and it is something that we have to 
stop, and this is one way to do it. So I appreciate your being 
here today.
    I think Mr. Chilton--I think Mr. Schock a while ago was 
trying to get to a point and trying to ask a question about the 
value of land. Can you give me an idea of all of the stuff that 
is going on with the Clean Water Act? How has that impacted the 
value of land in your area, or has it at all yet?
    Mr. Chilton. My land is mainly grazing, except I have a 40-
acre farm. And thank you for the question. Well, the Clean 
Water Act, as now interpreted by the local Tucson office, would 
be such that, if I were to try to sell my land, that would have 
to be a major disclosure item to the purchaser.
    And I do not know how much a purchaser would discount the 
fact that every bit of water, if this expansion of jurisdiction 
takes place, would be subject to the Clean Water Act in a 404 
permit. I just can't tell you exactly.
    Mr. Luetkemeyer. Thank you.
    Mr. Kruse, want to try that one?
    Mr. Kruse. Yes, sir. I think to some extent the main impact 
on land value so far has been, for example, where a tract of 
land that includes some wetlands on it has been sold, and also 
the whole thought of mitigation. I am aware, as I know you are, 
there are situations in our state where some people have been 
forced to mitigate five to one.
    In other words, they have got to provide five acres to one 
acre in a mitigation process. And so that obviously indirectly 
impacts land value. What would really impact land value is if 
the word ``navigable'' is taken out and the way we treat prior 
converted cropland, which is being discussed, would be changed, 
because that is some 55 million acres of farmland that is prior 
converted. And that would dramatically have an impact on the 
value of the land.
    There are some who are saying that that ought to be clearly 
defined, as prior converted can only be used for agricultural 
purposes, and not for anything else. You can imagine what that 
would do to the value of the land.
    Mr. Luetkemeyer. Thank you, Mr. Kruse.
    I will yield back. Thank you, Madam Chairman.
    Chairwoman Velazquez. Mr. Graves, do you have any other 
questions?
    Mr. Graves. No.
    Chairwoman Velazquez. Mr. Thompson?
    Mr. Thompson. Thank you, Madam Chairman. Just one in terms 
of the complexities of this process. I would just throw this 
open to the whole panel. I mean, is this something--is this 
something you are able to--when you go through this permitting 
process, is this something the normal small business person or 
farmer is equipped to do? Or do you have to hire a consultant? 
Do you have to hire a lawyer? What is the complexities of this 
process? And what does that mean in expense?
    Mr. Chilton. Well, for me, I had to hire an attorney and 
two consultants. And we had to do an archaeological study. And 
it cost about $40,000, and I threw up my hands and said, ``I am 
sorry.'' I did get the permit, but I just gave up on the 
project. As it--you cannot navigate the language and legalese 
of the Corps of Engineers' permit process without professional 
help.
    Mr. Thompson. Has anyone else experienced--
    Mr. Schellenberg. It has been my experience it takes 
engineers, it takes surveyors to survey the grounds, you have 
got your biologists out there and different people looking at 
the plants and looking at things and trying to define the area 
of the wetland. So you have--and then, possibly you need an 
attorney to help you determine whether or not what the Corps is 
telling you is right or not.
    So it is not something a person could do on their own, in 
most cases. It is something that is very complex. You have to 
have people with knowledge in this area and people that 
specialize in this to get you through it.
    Thank you.
    Mr. Pebley. I would just echo Mr. Schellenberg's comments. 
This is something that I would not attempt to do on my own. 
There are too many pitfalls and minefields to try and traverse. 
And I am not interested in having civil or criminal penalties 
put upon me for misunderstanding of the law.
    So no, we hire engineers and attorneys to handle this for 
us, and the cost is passed on to the customer. And in our case, 
most of the time the customer is a political subdivision. And 
so that cost is then passed on to the taxpayer of that 
political subdivision.
    So, I mean, everything has its consequences, and we charge 
for those consequences. And I think it could be a whole lot 
simpler if some of the panelists who have said, Congressmen 
have said some common sense reigned it would make a big 
difference for everybody.
    Mr. Thompson. So it is fair to say that these costs 
obviously are not also unnecessary, but frankly are just going 
to be crushing upon the businesses and the jobs that are 
sustained and created by those businesses.
    Mr. Pebley. Yes.
    Mr. Thompson. Thank you, gentlemen. Thanks for your 
testimony.
    I yield back.
    Chairwoman Velazquez. Mr. Westmoreland.
    Mr. Westmoreland. Thank you, Madam Chair.
    Mr. Gray, I recently visited a dairy farm that--they milk 
cows from about 2:00 in the morning until about 10:00 in the 
morning, and then from about 2:00 to 10:00 at night. So it is 
an unbelievable thing, so the dairy farm guys have my heart in 
what they do.
    Mr. Gray. Thank you.
    Mr. Westmoreland. But going there it was very interesting 
at the innovative things that they are doing. And right now we 
are in a spirit of green, I guess. And the fact that these 
farmers took the dairy cows, they basically wash down where 
they stand, this water runs into a pond, and it is stirred up. 
And then, this water is used to irrigate corn that is used for 
the silage to feed the cows. So it is kind of a cycle of life I 
guess that goes on.
    The difference is that this--the thing is bordered by the 
Flint River. And having gone and witnessed how careful they are 
to use all of their assets I guess to make farming as cheap as 
they can, and to make it really as simple as it can, I am 
afraid that if they would have had to get a 404 permit for 
anything that somebody having looked at this navigable water, 
or anything that affects water, would come out, because, as you 
understand and somebody mentioned, that even though we as 
Congress pass laws, we do not write the rules for these laws.
    These laws are written by different agencies, and they may 
come up with some different interpretations of what the 
legislative intent was. Is this normal, that dairy farmers do 
this type of thing? And, Mr. Chilton, I will let you answer as 
far as ranchers go also.
    Mr. Gray. Well, that is a good question, Congressman. As a 
matter of fact, I should have mentioned this in my testimony 
and in previous questions. And that hits on the issue, though, 
of handling manure from dairy cows. For example, a 1,500-cow 
Holstein will produce 75 pounds of manure a day. So in a sense-
-
    Mr. Westmoreland. And how much water does--
    Mr. Gray. Well, that includes the water--that includes the-
-both the manure--the solid and the water.
    Mr. Westmoreland. But how much water one of those cattle a 
day drink?
    Mr. Gray. Well, she will drink--well, she is given 100 
pounds. She will drink, oh God, I don't know how many gallons, 
200 or 300 gallons of water. I mean, they drink a lot. They 
consume a lot, they really do. But what we are lacking, and we 
are struggling with in the dairy business, because we have our 
cows confined to some degree--I mean, it depends on the herd--
is the kind of manure handling, nutrient management practices 
that we can put on farms, as you were discussing and 
mentioning, that will handle manure so we have as little 
nutrient loss as possible. We are trying to eliminate that.
    But I can tell you we don't have the range of technologies 
available to a dairy farmer who is 80 cows to one that is 1,000 
cows that will work for everybody. Anaerobic digesters can be 
effective, but they are very costly. Our farmers are looking 
for these solutions. USDA, by the way, just did a report on 
animal manure and found that--I think it says between five and 
10 percent of our renewable energy could be created by using 
manure, so that would take that cycle, as you were discussing, 
one step further.
    So I think we need to do that, but we need some help in 
doing that. We don't need more litigation. That is what we are 
trying to avoid. We want to do this, but we are going to need 
some help.
    Mr. Westmoreland. One further question for you. Have you 
ever had anybody from Department of Agriculture, EPA, Corps of 
Engineers, come out to any of the farms that you know of and 
ask you how they could help you? I know that is a funny 
question. I apologize for that.
    Mr. Gray. Yes, I am not sure they have asked how they could 
help, but I know some of our farms have had Corps and EPA 
people come out asking questions and looking at certain parts 
of their farms regarding wetlands, and so forth. Yes. I mean, 
that has happened a lot.
    Mr. Westmoreland. Can I continue?
    Chairwoman Velazquez. Okay. Is it your intention--do you 
need five more minutes, or are you going to continue 
questioning witnesses five minutes each?
    Mr. Westmoreland. I probably have about five minutes more 
of questions.
    Chairwoman Velazquez. The gentleman can proceed.
    Mr. Westmoreland. Thank you.
    The reason I ask that is we had another hearing in this 
Committee, a Subcommittee hearing, that we had a lady from the 
EPA here that has been at the EPA for 29 years. She has been in 
charge of this department for 14 years that deals with the 
biofuels and feedstock, and so forth and so on. The reason I 
ask that, I had asked her in her 29 years with the EPA, because 
we had farmers and forestry people testify that these rules and 
regulations that they were coming up with was killing them, and 
the biofuel people.
    And I asked her how many farms she had visited in 29 years 
to see some of these problems they had discussed, and she 
mentioned none. So I didn't know if any of these people writing 
the rules and regulations they have visited dairy farms, or if 
they just think milk comes from the grocery store.
    Let me go--Mr. Schellenberg, it was mentioned about shovel-
ready projects. I know that when the stimulus package came out 
my commissioner--Department of Transportation and a group of 
other--I think in fact all of the DOT commissioners may have 
gotten together and sent a letter to the EPA, because a lot of 
these projects were shovel-ready, except the permit--the 
environmental study maybe that came.
    And so they asked the EPA if they would expedite the 
environmental studies or applications, so these shovel-ready 
projects could get on board. As far as the underground utility 
contractors, have you experienced any of that in any work that 
you all may see in the backlog, or in the background that is 
ready to come forward?
    Mr. Schellenberg. I haven't seen that in--coming from 
Oregon, I haven't seen any expedited permits that I am aware 
of.
    Mr. Westmoreland. No, there is--no, trust me, there hasn't 
been any. But I am saying, had there been, would there not have 
been some more shovel-ready projects that would have been ready 
to go?
    Mr. Schellenberg. Oh, certainly. There is a lot of projects 
that were ready. I discussed--had a meeting a week ago with the 
public works director of Salem, and we discussed this very 
issue that they had projects. If they could have had the 
permits in hand, they could have done other projects. But this 
is hampering them getting these projects out.
    Mr. Westmoreland. Mr. Schellenberg, I know that--and I am 
very familiar with underground utility contracting work coming 
from a building background. I know that on occasion that when 
you are doing tunneling and other things, if you are in the 
midst of doing it and a rainstorm comes up, or whatever, some 
of these ditches fill up with water.
    And whether you are doing highway construction or boring 
under a road, or just putting in a water line, sewer, or 
whatever, that these ditches fill up with water, an incredible 
amount of water, at some points in time, just depending on the 
elevation.
    If ``navigable'' was taken out of the Clean Water Act, 
would you feel, or do you think any of your members would feel, 
it necessary to get a permit to do something with the water 
that was retained in these ditches, ponds, work areas, before 
you could do anything to get rid of it?
    Mr. Pebley. If ``navigable'' is removed, I think we are 
going to be told by the EPA and the Corps that we are going to 
need to get permits before we can proceed with this type of 
work. I fully expect that to happen.
    Mr. Westmoreland. And, Mr. Pebley, let me ask you that same 
question coming from the Association of General Contractors, 
large commercial jobs where you do large excavation, such as, 
you know, digging down three and four stories to put in 
footings or foundation for some of these large structures. 
Would you think the same thing, that if you were in one of 
those situations, large rainfall, snow melt, or whatever, that 
you would be put into a situation of dealing with that water, 
because it is going to affect something if you are in a city, 
of having to get a 404 permit?
    Mr. Pebley. Yes. I think if the word ``navigable'' is taken 
out and replaced with ``all,'' yes, sir, I think it is pretty 
clear all waters, whether it is rainfall or drought, or that is 
now in a hole so it is part of groundwater, or if it seeps in 
while you are doing your work, yes, sir, I think you would have 
to get a 404, and then you are opening up to a whole host of 
problems, because now you have an open hole that is an 
attractive nuisance.
    And if somebody--if a child falls in that hole because you 
can't fill it up because there is water in it, and you are 
waiting on your 404 permit, then you are open to a lawsuit from 
a third party, because you have an attractive nuisance and a 
child fell in the hole, even if you have, you know, completely 
fenced it off.
    So it is a very tenuous slippery slope, as has been 
discussed earlier. And I don't see any up side to it, sir.
    Mr. Westmoreland. Well, then you would be able to deal with 
OSHA for protecting the hole.
    Mr. Pebley. Yes, sir.
    Mr. Westmoreland. One final question, Madam Chair, if I 
could.
    Chairwoman Velazquez. Time is expired, and I have given you 
enough time out of my time, and Mr. Graves'.
    Mr. Westmoreland. Okay. Well, you have been mighty nice, 
Madam Chair. I was--
    Chairwoman Velazquez. The understanding that the Ranking 
Member and I have is--
    Mr. Westmoreland. I understand.
    Chairwoman Velazquez. --in consultation to provide five 
minutes. And I have been quite--
    Mr. Westmoreland. Well, this is something that we will 
discuss at a later time. I will yield to your authority on 
that, and then we will take it up with the Speaker's office--
    Chairwoman Velazquez. Thank you.
    Mr. Westmoreland. --or whoever. Thank you, ma'am.
    Chairwoman Velazquez. Thank you.
    Gentlemen, thank you all for coming here today. I believe 
this is a very important issue, very complex, and I am happy--I 
will ask you, have you ever been invited to this Committee 
since we passed the Clean Water Act? Small Business Committee 
have ever conducted a hearing dealing with this issue?
    Mr. Schellenberg. Not that I am aware of.
    Mr. Graves. Not that I am aware of either.
    Mr. Chilton. I have not, and I thank you very much for 
having the hearing.
    Chairwoman Velazquez. I am glad that it takes a Democrat to 
invite you to come over and discuss this issue.
    Mr. Chilton. We really appreciate it.
    Chairwoman Velazquez. Because we understand the unintended 
consequences that regulations and legislation will have and 
might have on the work that small businesses are doing in this 
country.
    So it has been my intention to bring rural America and 
urban America closer, so that is why this Committee has held so 
many hearings with farmers, and we injected ourselves into the 
discussion of the farm bill. So I am very happy about that.
    I ask unanimous consent that members will have five days to 
submit a statement and supporting materials for the record. 
Without objection, so ordered.
    This hearing is now adjourned. Thank you.
    [Whereupon, at 3:01 p.m., the Committee was adjourned.]

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