[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
 HEARING TO REVIEW THE IMPLEMENTATION OF PHASE II OF THE CHESAPEAKE BAY
     TMDL WATERSHED IMPLEMENTATION PLANS AND THEIR IMPACTS ON RURAL
                              COMMUNITIES

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

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON CONSERVATION, ENERGY,
                              AND FORESTRY

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            NOVEMBER 3, 2011

                               __________

                           Serial No. 112-26


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov



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                        COMMITTEE ON AGRICULTURE

                   FRANK D. LUCAS, Oklahoma, Chairman

BOB GOODLATTE, Virginia,             COLLIN C. PETERSON, Minnesota, 
    Vice Chairman                    Ranking Minority Member
TIMOTHY V. JOHNSON, Illinois         TIM HOLDEN, Pennsylvania
STEVE KING, Iowa                     MIKE McINTYRE, North Carolina
RANDY NEUGEBAUER, Texas              LEONARD L. BOSWELL, Iowa
K. MICHAEL CONAWAY, Texas            JOE BACA, California
JEFF FORTENBERRY, Nebraska           DENNIS A. CARDOZA, California
JEAN SCHMIDT, Ohio                   DAVID SCOTT, Georgia
GLENN THOMPSON, Pennsylvania         HENRY CUELLAR, Texas
THOMAS J. ROONEY, Florida            JIM COSTA, California
MARLIN A. STUTZMAN, Indiana          TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio                      KURT SCHRADER, Oregon
AUSTIN SCOTT, Georgia                LARRY KISSELL, North Carolina
SCOTT R. TIPTON, Colorado            WILLIAM L. OWENS, New York
STEVE SOUTHERLAND II, Florida        CHELLIE PINGREE, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas  JOE COURTNEY, Connecticut
MARTHA ROBY, Alabama                 PETER WELCH, Vermont
TIM HUELSKAMP, Kansas                MARCIA L. FUDGE, Ohio
SCOTT DesJARLAIS, Tennessee          GREGORIO KILILI CAMACHO SABLAN, 
RENEE L. ELLMERS, North Carolina     Northern Mariana Islands
CHRISTOPHER P. GIBSON, New York      TERRI A. SEWELL, Alabama
RANDY HULTGREN, Illinois             JAMES P. McGOVERN, Massachusetts
VICKY HARTZLER, Missouri
ROBERT T. SCHILLING, Illinois
REID J. RIBBLE, Wisconsin
KRISTI L. NOEM, South Dakota

                                 ______

                           Professional Staff

                      Nicole Scott, Staff Director

                     Kevin J. Kramp, Chief Counsel

                 Tamara Hinton, Communications Director

                Robert L. Larew, Minority Staff Director

                                 ______

           Subcommittee on Conservation, Energy, and Forestry

                 GLENN THOMPSON, Pennsylvania, Chairman

BOB GOODLATTE, Virginia              TIM HOLDEN, Pennsylvania, Ranking 
MARLIN A. STUTZMAN, Indiana          Minority Member
BOB GIBBS, Ohio                      KURT SCHRADER, Oregon
SCOTT R. TIPTON, Colorado            WILLIAM L. OWENS, New York
STEVE SOUTHERLAND II, Florida        MIKE McINTYRE, North Carolina
MARTHA ROBY, Alabama                 JIM COSTA, California
TIM HUELSKAMP, Kansas                TIMOTHY J. WALZ, Minnesota
RANDY HULTGREN, Illinois             CHELLIE PINGREE, Maine
REID J. RIBBLE, Wisconsin            MARCIA L. FUDGE, Ohio
KRISTI L. NOEM, South Dakota         GREGORIO KILILI CAMACHO SABLAN, 
                                     Northern Mariana Islands

               Brent Blevins, Subcommittee Staff Director

                                  (ii)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Holden, Hon. Tim, a Representative in Congress from Pennsylvania, 
  opening statement..............................................     4
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, prepared statement..................................     5
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................     1
    Prepared statement...........................................     3
    Submitted letter.............................................    63

                               Witnesses

Garvin, Hon. Shawn M., Regional Administrator, Environmental 
  Protection Agency, Region 3, Philadelphia, PA..................     6
    Prepared statement...........................................     7
    Supplementary material.......................................    83
    Submitted questions..........................................    84
Krancer, Hon. Michael L., Secretary, Pennsylvania Department of 
  Environmental Protection, Harrisburg, PA.......................    24
    Prepared statement...........................................    26
Brubaker, Hon. Michael, Chairman, Chesapeake Bay Commission; 
  Senator, Commonwealth of Pennsylvania, Annapolis, MD...........    38
    Prepared statement...........................................  6040
Shaffer, Carl, President, Pennsylvania Farm Bureau Federation; 
  Member, Board of Directors, American Farm Bureau Federation, 
  Camp Hill, PA..................................................    43
    Prepared statement...........................................    44
Perrow, Jr., Hon. Edgar J.T., Ward IV Representative, Lynchburg 
  City Council, Lynchburg, VA....................................    51
    Prepared statement...........................................    52


 HEARING TO REVIEW THE IMPLEMENTATION OF PHASE II OF THE CHESAPEAKE BAY
     TMDL WATERSHED IMPLEMENTATION PLANS AND THEIR IMPACTS ON RURAL
                              COMMUNITIES

                              ----------                              


                       THURSDAY, NOVEMBER 3, 2011

                  House of Representatives,
        Subcommittee on Conservation, Energy, and Forestry,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:04 a.m., in 
Room 1300 of the Longworth House Office Building, Hon. Glenn 
Thompson [Chairman of the Subcommittee] presiding.
    Members present: Representatives Goodlatte, Gibbs, 
Huelskamp, Hultgren, Thompson, Holden, Owens, and McIntyre.
    Staff present: Brent Blevins, Debbie Smith, Lauren 
Sturgeon, Heather Vaughn, Suzanne Watson, Nona McCoy, Liz 
Friedlander, Anne Simmons, John Konya, and Caleb Crosswhite.

 OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN 
                   CONGRESS FROM PENNSYLVANIA

    The Chairman. Good morning, everyone. I want to welcome 
everyone to this morning's hearing to review implementation of 
Phase II of the Chesapeake Bay TMDL Watershed Implementation 
Plans and their impacts on rural communities. This hearing is 
the second hearing this Subcommittee has held to provide 
oversight of the Chesapeake Bay TMDL process.
    In March, we reviewed the productive conservation work that 
our farmers are engaging in throughout the watershed, and at 
that hearing, I stated that I believe this topic is one of the 
most important matters this Subcommittee will examine, and 
nothing has changed my mind on that.
    Today's hearing will examine the TMDL with a different 
focus. We are going to examine the impacts the TMDL will have 
on states and localities within the Chesapeake Bay watershed. 
More specifically, we will be considering Phase II and the 
practical effects this period of the TMDL will have on states, 
regulatory bodies, our farmers, and communities.
    By way of review, the TMDL was published in the Federal 
Register last December. The states had to submit their plans 
for Phase I Watershed Implementation Plans, or WIPs, to EPA 
prior to that date. These WIPs outline the targets for each 
state in reducing nitrogen, phosphorous, and sediment. The 
states are now required to submit their Phase II WIPs to EPA 
next month. That is why the time of this hearing is so 
important. Because the TMDL for the Chesapeake Bay is such a 
broad effort, and because of the cost imposed on local 
governments within the watershed, it is imperative for Members 
of this Subcommittee to understand what is being asked of the 
counties, cities, and towns that are covered by the TMDL.
    For the second phase, these plans must go into greater 
detail than the initial WIPs and outline each state's efforts 
to engage localities and all government organizations in the 
nutrient reduction process. States are being asked to formulate 
these draft plans while they are in the process of implementing 
the first phase of these plans approved by EPA last year.
    Agriculture plays a large role in that process. Our March 
hearing showcased the good work producers are doing on the 
ground every day, but it is no secret that I have serious 
concerns about the TMDL both in terms of process and the likely 
impacts on our farms and communities. As laid out by EPA, this 
plan may result in a cleaner Bay. However, it will certainly 
come at an incredibly high price to the 17 million residents in 
the watershed. What is most problematic is that no one can say 
with certainty whether the cost is worth the effort, as we 
still do not have a cost-benefit analysis. For this process, I 
do understand from the Administrator's report that the one in 
May may be in process, I look forward to hearing more about 
that.
    We addressed this in our March hearing, and I am aware that 
EPA has taken steps to address these concerns. I am pleased to 
hear that and I look forward to seeing the final analysis. But 
the longer we wait for the final analysis, the more difficult 
it will be to change directions if necessary. We are in the 
midst of a process that could cost individual states like 
Virginia, Maryland, and Pennsylvania more than $10 billion per 
state. Even in the best of economic times, that figure would be 
a crushing burden on the states. My home State of Pennsylvania 
had considerable budget struggles in recent years. That is why 
it is so important to be sure of the costs and the benefits 
ahead of us.
    Frankly, I am alarmed at the potential economic impact that 
this will have on states and municipalities in the watershed. I 
am worried that our rural communities will be faced with the 
difficult choice of either raising taxes or slashing other 
spending in order to comply with these requirements. I also 
have reservations about the Bay model that the EPA is using in 
making allocations. Several states, as well as outside groups, 
have raised issues about the accuracy of the watershed model 
used for nutrient allocation purposes. These concerns are 
addressed in a letter from Virginia Secretary of Natural 
Resources to Administrator Garvin that I am submitting for the 
record.
    [The document referred to is located on p. 63.]
    The Chairman. There is too much at stake for the use of an 
inaccurate model, and I hope to hear from EPA about steps it is 
taking to address these questions and concerns. I think I speak 
for Members of the Subcommittee when I say that we must be 
certain that this entire process is carried out in an open and 
transparent manner. We must also be certain that our Federal 
Government is not carrying out the requirements of this plan in 
a heavy-handed manner and placing an undue burden on states and 
localities at a time when we need fewer regulations, not more.
    I want to welcome our panel of witnesses. I thank them for 
agreeing to testify today. I want to welcome Region 3 
Administrator Shawn Garvin. I want to thank you for coming down 
from Philadelphia for this hearing, Mr. Garvin. I look forward 
to hearing your testimony on how EPA is assisting states in 
complying with the TMDL. I also want to thank our second panel 
of witnesses for agreeing to be here today. The Subcommittee 
will benefit from hearing the regional, state, and local 
perspectives that each of you offer.
    [The prepared statement of Mr. Thompson follows:]

Prepared Statement of Hon. Glenn Thompson, a Representative in Congress 
                           from Pennsylvania

    Good morning. I want to welcome everyone to this morning's hearing 
to review implementation of Phase II of the Chesapeake Bay TMDL 
Watershed Implementation Plans and their impacts on rural communities.
    This hearing is the second hearing this Subcommittee has held to 
provide oversight of the Chesapeake Bay TMDL process.
    In March, we reviewed the productive conservation work that our 
farmers are engaging in throughout the watershed.
    At that hearing, I stated that I believed that this topic is one of 
the most important matters this Subcommittee will examine and nothing 
has changed my mind.
    Today's hearing will examine the TMDL with a different focus.
    We are going to examine the impacts the TMDL will have on states 
and localities within the Chesapeake Bay watershed.
    More specifically, we will be considering Phase II and the 
practical effects this period of the TMDL will have on the states, the 
regulatory bodies, and our farmers and communities.
    By way of review, the TMDL was published in the Federal Register 
last December.
    The states had to submit their plans for Phase I Watershed 
Implementation Plans--or WIPs--to EPA prior to that date.
    These WIPs outlined the targets for each state in reducing 
nitrogen, phosphorous and sediment.
    The states are now required to submit their Phase II WIPs to EPA 
next month.
    That's why the timing of this hearing is so important.
    Because the TMDL for the Chesapeake Bay is such a broad effort, and 
because of the costs it imposes on the local governments within the 
watershed, it is imperative for Members of this Subcommittee to 
understand what is being asked of the counties, cities, and towns who 
are covered by the TMDL.
    The second phase of these plans must go into greater detail than 
the initial WIPs and outline each state's efforts to engage localities 
and non-governmental organizations in the nutrient reduction process.
    States are being asked to formulate these draft plans while they 
are in the process of implementing the first phase of these plans 
approved by EPA last year.
    Agriculture plays a large role in that process.
    Our March hearing showcased the good work that our producers are 
doing on the ground every day.
    But it is no secret I have serious concerns about the TMDL--both in 
terms of process and the likely impacts on our farms and communities
    As laid out by EPA, this plan may well result in a cleaner Bay.
    However, it will certainly come at an incredibly high price to the 
17 million residents in the watershed.
    What's most problematic is that no one can say with certainty 
whether the cost is worth the effort, as we still do not have a cost-
benefit analysis of this process.
    We addressed this in our March hearing, and I am aware that EPA has 
taken steps to address these concerns.
    I'm pleased to hear that, and I look forward to seeing the final 
analysis.
    But the longer we wait for the final analysis, the more difficult 
it will be to change directions if necessary.
    We are in the midst of a process that could cost individual states 
like Virginia, Maryland, and Pennsylvania more than $10 billion per 
state.
    Even in the best of economic times, that figure would be a crushing 
burden on states.
    My home state of Pennsylvania has had considerable budget struggles 
in recent years.
    That's why it's so important to be sure of the costs and benefits 
ahead of us.
    Frankly, I am alarmed at the potential economic impact this will 
have on states and municipalities in the watershed.
    I am worried that our rural communities will be faced with the 
difficult choice of either raising taxes or slashing other spending in 
order to comply with these requirements.
    I also have reservations about the Bay model that EPA is using in 
making allocations.
    Several states--as well as outside groups--have raised issues about 
the accuracy of the Watershed Model used for nutrient allocation 
purposes.
    These concerns are addressed in a letter from Virginia's Secretary 
of Natural Resources to Administrator Garvin that I am submitting for 
the record.
    There is too much at stake for the use of an inaccurate model.
    I hope to hear from EPA about steps it is taking to address these 
questions.
    I think I speak for Members of this Subcommittee when I say that we 
must be certain that this entire process is carried out in an open and 
transparent manner.
    We must also be certain that our Federal Government is not carrying 
out the requirements of this plan in a heavy-handed manner and placing 
an undue burden on states and localities at a time when we need fewer 
regulations, not more.
    I want to welcome our panel of witnesses and thank them for 
agreeing to testify today.
    I want to welcome Region 3 Administrator Shawn Garvin.
    I want to thank you for coming down from Philadelphia for this 
hearing, Mr. Garvin.
    I look forward to hearing your testimony on how EPA is assisting 
states in complying with the TMDL.
    I also want to thank our second panel of witnesses for agreeing to 
be here today.
    The Subcommittee will benefit from hearing the regional, state and 
local perspectives each of you offer.
    I now recognize Mr. Holden for his opening statement.

    The Chairman. And I now recognize Mr. Holden for his 
opening statement.

   OPENING STATEMENT OF HON. TIM HOLDEN, A REPRESENTATIVE IN 
                   CONGRESS FROM PENNSYLVANIA

    Mr. Holden. Thank you, Mr. Chairman. Thank you for having 
this hearing today.
    The health of the Chesapeake Bay and those bodies of water 
contained in the Bay watershed, including the Susquehanna River 
that runs through my Congressional district, deserves our full 
attention. I want to thank our witnesses and guests for coming 
today to speak on a very important topic for farmers and 
ranchers not only in the Chesapeake Bay watershed, but also 
those across the country concerned with increased regulation.
    Farming has always been an important part of the Chesapeake 
Bay's landscape. Comprising almost \1/4\ of the watershed, it 
is often noted that agriculture can play a significant role in 
the protection of this ecosystem. Efforts to improve Bay water 
quality, however, should not impede on the livelihood of our 
family farmers.
    This Subcommittee has worked for a long time to make sure 
Chesapeake Bay farmers, who already face some of the most 
stringent environmental regulations in the United States, are 
put on the same level playing field as those in other regions 
of the country. Yet it feels like every time we take a step 
forward, we are pushed two steps backwards. EPA has singled out 
producers in the Chesapeake Bay states for new regulations and 
increased penalties through the Chesapeake Bay TMDL; once again 
placing Bay farmers at a financial and competitive 
disadvantage. Despite lack of information about the data sets 
used to develop the TMDL reduction allocations and despite 
glaring discrepancies between data collected by various 
government agencies, EPA has pushed forward with Phase II 
Watershed Implementation Plans which set nutrient and sediment 
goals to more local levels.
    In the 2008 Farm Bill, Congress--at the recommendation of 
this Subcommittee--established a new Chesapeake Bay Watershed 
Program to give farmers from the Chesapeake Bay states a 
guaranteed source of funding for the tools they need to 
implement land management practices that help reduce nutrients 
and sediment that can flow into the Bay. The increase in 
regulatory action by EPA makes targeted conservation funding 
even more essential. It is important we keep the Chesapeake Bay 
Watershed Program and what it does for producers in mind as we 
work to reauthorize farm bill conservation programs, especially 
when discussing potential program reductions and consolidation.
    We must continue to do everything we can to protect our 
agriculture producers and preserve the integrity of this 
essential program. Agriculture practices can be some of the 
most cost-effective at improving water quality in the region. 
It is important that we encourage our farmers, who have always 
been the best advocates for resource conservation, to continue 
their efforts to further elevate their environmental 
stewardship across the Chesapeake Bay watershed without 
threatening harmful penalties.
    I look forward to learning more about the development of 
the draft WIPs produced and the impact on agriculture from our 
witnesses today. Thank you, Mr. Chairman.
    The Chairman. All right. I thank the Ranking Member. The 
chair would request that other Members submit their opening 
statements for the record so the witnesses may begin their 
testimony to ensure that there is ample time for questions.
    [The prepared statement of Mr. Peterson follows:]

  Prepared Statement of Hon. Collin C. Peterson, a Representative in 
                        Congress from Minnesota

    Good morning. Thank you Chairman Thompson and Ranking Member Holden 
for holding today's hearing. I am pleased that we are closely tracking 
the TMDL process for the Chesapeake Bay watershed and monitoring EPA's 
actions as the Watershed Implementation Plans move forward.
    The impact the Chesapeake Bay TMDL could have on producers is of 
particular concern to this Committee and something we have been closely 
following. This oversight is important not only because of the effects 
it could have on those near the Chesapeake Bay but the potential 
ramifications it could have on producers nationwide.
    I've made no secret about my concerns with some of these 
regulations. Chesapeake Bay producers already face some of the most 
stringent environmental regulations in the country. The additional 
costs that producers will incur to meet these requirements could 
potentially put these producers at a competitive and financial 
disadvantage, potentially forcing some out of business.
    I think we need to continue looking very closely at these issues to 
ensure that EPA's policy and procedure is being developed in an open 
and transparent manner by taking into account input from all interested 
organizations and not basing important decisions based on some 
ideological viewpoints.
    Again, I thank the chair for holding today's hearing and look 
forward to hearing from our witnesses.

    The Chairman. And I would like to welcome our first panel 
to the table. And as I mentioned before, it is the Honorable 
Shawn M. Garvin, Region 3 Administrator, the Environmental 
Protection Agency Region 3, Philadelphia, Pennsylvania.
    Administrator Garvin, please begin when you are ready.

          STATEMENT OF HON. SHAWN M. GARVIN, REGIONAL
   ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY, REGION 3, 
                        PHILADELPHIA, PA

    Mr. Garvin. Good morning, Chairman Thompson, Ranking Member 
Holden, Members of the Subcommittee. Thank you for the 
opportunity to talk with you today about efforts to clean up 
local rivers and streams and the Chesapeake Bay, and 
specifically to discuss the developments of the Phase II 
Watershed Implementation Plans and their impacts on rural 
communities.
    Agriculture is a key part of the American economy and way 
of life and plays an important role in watershed restoration. 
We believe environmentally sound farming is truly a preferred 
land use in the region. State WIPs are the roadmaps for how and 
when states will reduce pollution in order to achieve the local 
and regional water quality goals set by the Bay Total Maximum 
Daily Load, or TMDL.
    In developing their WIPs, states have the flexibility to 
decide how to reduce pollution and from what sectors. The TMDL 
establishes the targets and the states through their WIPs 
describe how they will meet those targets. Since the final TMDL 
was signed in December 2010, EPA and the states have turned our 
focus to TMDL implementation and development of those WIPs. 
Phase I WIPs describe the restoration action at the state 
level, whereas the Phase II WIPs zoom in a little more and 
explain how states will work with their localities to get on-
the-ground restoration practices in place.
    In recent weeks, we have had very productive conversations 
with the states resulting in a shift in our Phase II approach. 
Our revised thinking is described in an October 5 letter I sent 
to the states. In this letter, we clarified that local targets 
do not have to be expressed in pounds of pollution but instead 
can be expressed as programmatic actions or the number of 
practices needed for restoration. These local targets should be 
based on what makes the most sense to the states and their 
local partners.
    Right now, states are engaged and are working with the 
localities on these Phase II plans. We recognize that the 
agricultural sector has done much to reduce nutrient and 
sediment loadings in the Bay watershed, and we participated in 
discussions with states about certainty programs that recognize 
those contributions. The bottom line is that conservation 
practices work and additional opportunities exist to make 
further progress.
    I was able to view these practices firsthand when I visited 
a dairy farm in Lancaster County this past summer with 
Administrator Jackson. State officials including Senator 
Brubaker and Secretary Krancer joined us on that visit. During 
our time on the farm, we got to see the use of field practices 
and manure handling that are benefitting the farm operations 
and improving water quality. In a roundtable discussion hosted 
by Senator Brubaker, we had a chance to hear directly from the 
farmers about the valuable work they are doing and to hear 
about their concerns. These kinds of interactions are 
incredibly useful and we will continue to rely upon them as key 
ways of hearing from the agricultural community.
    Last, I want to point out the work EPA has done following 
the March hearing where Deputy Administrator Bob Perciasepe 
testified. At the hearing, there were discussions about both 
costs and the benefits of implementing the Chesapeake Bay TMDL. 
Following the hearing, Mr. Perciasepe directed EPA staff to 
develop an estimate of the costs associated with the WIPs and 
the analysis of the benefits associated with achieving water 
quality standards. This work is well underway and EPA has been 
consulting with USDA and the states on this analysis.
    You also asked us at the hearing about what is commonly 
known as the LimnoTech Report. As we stated at the hearing, we 
asked that an independent panel of scientists be convened to 
review the report. The panel recently published their review 
and found that the CEAP study and the Chesapeake Bay watershed 
partnership model are in approximate agreement on both the 
nutrient and sediment loadings from agricultural lands at the 
large basin scale. Again, this confirms that conservation works 
and more conservation will help us restore local waters in the 
Bay.
    Last, at the hearing USDA and EPA pledged to work together 
on conservation practices data. Since the hearing, we have 
developed a joint work plan which we provided to the 
Subcommittee in June that further refines our counting of 
conservation practices, bolsters the scientific defensibility 
of these practices, and improves data consistency between the 
two agencies.
    To conclude, farming is indeed a vital part of the 
Chesapeake Bay watershed. Thriving agriculture is essential to 
the long-term sustainability of the Chesapeake Bay and I 
commend the farming community for the hard work they have done. 
The work we are all undertaking now is not new. Although the 
TMDL may be new, the level of efforts to meet the goals have 
been nearly the same for more than a decade. Implementing the 
TMDL is simply the next step.
    We look forward to continuing to work with this 
Subcommittee and the agricultural community to protect and 
restore local waterways and the Chesapeake Bay. Thank you for 
the opportunity to testify, and I am pleased to answer any 
questions.
    [The prepared statement of Mr. Garvin follows:]

  Prepared Statement of Hon. Shawn M. Garvin, Regional Administrator, 
      Environmental Protection Agency, Region 3, Philadelphia, PA

    Good morning, Chairman Thompson, Ranking Member Holden, and Members 
of the Subcommittee. Thank you for the opportunity to talk with you 
today about efforts to clean up the rivers and streams flowing to the 
Chesapeake Bay and the development of Phase II of the Chesapeake Bay 
Watershed Implementations Plans (WIPS) and their impacts on rural 
communities.
    EPA has great respect for our rural communities and farmers in 
particular. Agriculture is a key part of the American economy and way 
of life, and has an important role in watershed restoration efforts. We 
value the critical work that farmers are doing to protect our soil, 
air, and water resources and believe that environmentally sound farming 
is essential to a thriving agricultural community and a sustainable 
Chesapeake watershed and ecosystem. Moreover, we believe 
environmentally sound farming is truly a preferred land use in the 
Region.
    I am pleased to be here today to talk with you about the work we 
are doing--in collaboration with our state partners and other Federal 
agencies--to restore local waterways and the Chesapeake Bay. I look 
forward to an open discussion with you about the Phase II WIP 
development and hope that I can answer any questions you may have about 
our work.

Chesapeake Bay TMDL
    For nearly 3 decades, the Chesapeake Bay Program (CBP) partners 
have had a clear understanding of the efforts needed to restore water 
quality in the Bay. In 1983, the Governors of Virginia, Pennsylvania 
and Maryland, the Mayor of the District of Columbia, the Chair of the 
Chesapeake Bay Commission, and the Administrator of EPA signed the 
first Chesapeake Bay Program agreement to work together to restore the 
Chesapeake Bay. They have since renewed that commitment through annual 
meetings and periodic agreements and directives. In addition, the 
states of Delaware, New York and West Virginia signed a multi-
jurisdictional Memorandum of Understanding committing to the 
restoration of the Chesapeake Bay.
    The idea for a Bay TMDL is not a new or recent idea; it is merely 
the next step in this decades-long restoration partnership effort. In 
June 2000, when the CBP Partners signed the Chesapeake 2000 (C2K) 
agreement,\1\ they committed to meeting water quality standards in the 
tidal waters of the Bay by 2010. Since then, the Partnership 
continuously developed and refined models to allocate pollution 
reduction responsibility between the states and developed tributary 
strategies to implement the pollution reduction actions necessary to 
restore the tidal waters of the Chesapeake Bay. The targets established 
in 2000, and the level of effort to meet those targets, have changed 
very little when compared to the Bay TMDL.
---------------------------------------------------------------------------
    \1\ http://archive.chesapeakebay.net/info/c2k.cfm.
---------------------------------------------------------------------------
    When signing the C2K agreement, the partners recognized that a TMDL 
would need to be developed if the actions identified in the agreement 
were not successful in achieving water quality standards in the 
mainstem and tidal portions of the Bay.\2\ Despite some significant 
progress in reducing pollution levels, the partners were not successful 
in meeting water quality standards by 2010. Our latest 2009 Bay 
Barometer report affirmed that despite the impressive restoration work 
done by the array of partners, the Bay continued to have poor water 
quality, degraded habitats, and low populations of some fish and 
shellfish species.
---------------------------------------------------------------------------
    \2\ Chesapeake 2000 agreement page 5: http://www.chesapeakebay.net/
content/publications/cbp_12081.pdf.
---------------------------------------------------------------------------
    So, in October 2007, when it became apparent that water quality 
standards would not be met by 2010, the Chesapeake Bay Program's 
Principals' Staff Committee (PSC), a group of state secretary-level 
representatives, requested that EPA begin to work with them to 
establish a multi-state TMDL.\3\
---------------------------------------------------------------------------
    \3\ See PSC meeting minutes for October 1, 2007: http://
archive.chesapeakebay.net/pubs/calendar/PSC--10-01-
07_Minutes_1_9029.pdf.
---------------------------------------------------------------------------
    After more than 2 years in development, EPA issued the final 
Chesapeake Bay Total Maximum Daily Load (TMDL), or pollution diet, on 
December 29, 2010 which established the maximum amount of pollution the 
estuary can receive and still meet water quality standards. The Bay 
TMDL is unique because of the measures EPA and the states adopted to 
ensure accountability for reducing pollution and meeting deadlines for 
progress. The final TMDL is based on the states' Phase I Water 
Implementation Plans (WIPs) and the input we received through our 
outreach effort across the watershed. That effort included hundreds of 
meetings with interested groups (including the agriculture community); 
two rounds of public meetings in all states, stakeholder sessions and 
media interviews; a series of monthly interactive webinars; notices 
published in the Federal Register; and a close working relationship 
with Chesapeake Bay Program committees representing citizens, local 
governments and the scientific community.

President Obama's Chesapeake Bay Executive Order
    The TMDL is a part of a broader effort by the Obama Administration 
to restore the Chesapeake Bay. On May 12, 2009, President Obama issued 
Executive Order 13508 on Chesapeake Bay Protection and Restoration. In 
the Executive Order, President Obama declared the Chesapeake Bay a 
``national treasure'' and ushered in a new era of Federal leadership, 
action and accountability. The purpose of the Executive Order was ``to 
protect and restore the health, heritage, natural resources, and social 
and economic value of the nation's largest estuarine ecosystem and the 
natural sustainability of its watershed.'' The Executive Order 
established the Federal Leadership Committee (FLC) for the Chesapeake 
Bay, which is chaired by the EPA Administrator and includes senior 
representatives from the departments of Agriculture, Commerce, Defense, 
Homeland Security, Interior and Transportation. The Executive Order 
charged the FLC with developing and implementing a new Strategy for 
protection and restoration of the Chesapeake region.
    The new Federal Strategy for the Chesapeake region, released in May 
2010, focuses on protecting and restoring the environment in 
communities throughout the 64,000 square mile watershed and in its 
thousands of streams, creeks, and rivers. The Strategy includes 
implementing new conservation practices on 4 million acres of farms and 
conserving 2 million acres of undeveloped land. To increase 
accountability, Federal agencies will establish milestones every 2 
years for actions to make progress toward measurable environmental 
goals. These will support and complement the states' 2 year milestones.

Watershed Implementation Plans (WIPs)
    State WIPs are the road maps for how and when, in partnership with 
Federal and local governments, states will reduce pollution in order to 
achieve and maintain pollutant allocations under the Bay TMDL. In 
developing the TMDL, our plan was always to have the pollution 
allocations based on state WIPs and to provide the states with 
flexibility to let them lead the way in determining how to reduce 
pollution and from what sectors.
    TMDL implementation includes check-ins along the way to assure 
progress--a series of 2 year milestones in which states, EPA, and other 
Federal agencies are setting incremental commitments for specific 
practices and programs to be implemented.
    Since the final TMDL was published in December 29, 2010, EPA and 
the states have turned our focus to TMDL implementation and developing 
Phase II WIPs. Phase II WIPs explain how states will work with their 
localities to get 60% of the needed restoration practices in place by 
2017 and 100% of the practices in place by 2025.
    Because implementation of the TMDL is designed to be as flexible as 
possible, EPA encouraged states to develop Phase II WIPs to meet the 
TMDL allocations in the best way for any given state. States are 
expected to develop draft Phase II WIPs by December 15, 2011 with final 
Phase II WIPs by March 30, 2012.
    In recent weeks, we have had very productive conversations with the 
states that have allowed EPA to better understand how to adapt our 
collective approach toward cleaning up the region's waterways. A shift 
in EPA's focus for Phase II WIPs was announced in an October 5, 2011 
letter to the state secretaries. Specifically, we have clarified that 
``local area targets'' may be expressed in terms other than pounds of 
pollutant reductions by county. Instead, Phase II WIPs could identify 
``targets'' or actions that local and Federal partners would take to 
fulfill their contribution toward meeting the Chesapeake Bay TMDL 
allocations such as programmatic actions, pollutant reductions to be 
achieved by individual counties, or the number of BMPs that need to be 
implemented. These targets or actions should be based on what makes the 
most sense to the states and their key local partners. EPA agrees with 
the states that we need to place greater emphasis on increasing actions 
on the ground to restore the Bay.
    States are now engaged in working with local governments, 
conservation districts, planning commissions, watershed groups, the 
public, and other key stakeholders to help refine strategies to clean 
up local waters and the Bay and to provide further assurance that the 
allocations will be met on schedule. In their Phase II WIPs the states 
will demonstrate that local partners are aware of the WIP strategies; 
understand their contribution to meeting the TMDL allocations; and have 
been provided the opportunity to suggest any refinements to the states 
WIP strategies.
    Phase III WIPs, which states will develop by 2017, are expected to 
provide additional detail on restoration actions beyond 2017 and to 
ensure that the 2025 goals are met.

Engagement with the Agriculture Community
    We recognize that the agricultural sector has done much to reduce 
nutrient and sediment loadings in the Bay watershed. Both nitrogen and 
phosphorus loadings from agriculture have declined since 1985. However, 
significant additional reductions from all sectors, including 
agriculture, are needed to meet water quality standards. The recent 
USDA Natural Resources Conservation Service assessment of the effects 
of conservation practices on cultivated cropland in the Chesapeake Bay 
region shows that conservation works. However, opportunities exist to 
make further progress in reducing nutrient and sediment loads from 
agricultural cropland.\4\
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    \4\ http://www.nrcs.usda.gov/Internet/FSE_DOCUMENTS/
stelprdb1042076.pdf.
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    I have had a number of opportunities to talk directly with people 
in the agriculture community, including a visit to a Lancaster county, 
PA dairy farm this past summer when I accompanied Administrator 
Jackson. During our time on the farm, we got to see the use of field 
practices and manure handling practices that are benefiting the farm 
operation and improving impacts on water quality. In a roundtable 
discussion, hosted by Senator Brubaker, we had a chance to hear 
directly from farmers about the valuable work they are doing with their 
conservation district and to hear about their concerns about the 
process by which Bay protections are being implemented. These kinds of 
interactions are incredibly useful for us and we will continue to rely 
upon them as a key way of hearing from the agriculture community.

Agriculture Certainty
    EPA has been involved in a number of discussions, along with USDA, 
state officials, and stakeholders to explore the option of state 
agricultural certainty programs. The idea of such state programs would 
be to increase producer interest and willingness to adopt systems of 
conservation practices based on farm-specific conservation planning, 
with incentives that provide assurances for farmers and increase the 
pace and extent to which resource conservation and verifiable water 
quality improvements are achieved. The Commonwealth of Virginia is 
leading the way with its enabling statute for a certainty program and 
plans to promulgate a regulation to implement its program within the 
next year or so. On October 6, EPA and USDA officials met with the 
Chesapeake Bay states in Annapolis, Maryland to further discuss key 
elements and principles of an agriculture certainty program. More than 
40 state representatives attended the very productive 6 hour meeting. 
In addition, the states will hold another meeting this month to seek 
input from non-government stakeholders from both the agricultural and 
environmental communities as states move forward with developing these 
programs. We believe that certainty programs are best carried out by 
the states and we have offered our support to states in the Bay region 
and other parts of the country as they think through the development of 
these programs.

Financial and Technical Assistance
    EPA provides funds to states to help with conservation 
implementation, technical assistance, tracking conservation, and 
compliance/enforcement activities. Our Chesapeake Bay Implementation 
Grants (CBIG) and Chesapeake Bay Regulatory and Accountability Program 
(CBRAP) provide $20.3 million to the states for programs that improve 
water quality in the watershed. EPA funding helps with WIP development 
and implementation, including conservation implementation, technical 
assistance, tracking conservation, and compliance activities.
    EPA's Innovative Nutrient and Sediment Reduction Grants Program, 
administered by the National Fish and Wildlife Foundation, provides 
grants for innovative, cost-effective projects that reduce agricultural 
and urban nutrient and sediment pollution in local and Bay waters. 
Since 2007, EPA has provided $26.8 million to support 54 projects in 
the Bay watershed. This year alone, EPA awarded $8.2 million to 19 
projects in the Chesapeake Bay.
    Two examples of projects we are funding through this grant program 
are:

   Transitioning Small Dairies to Phosphorus Balance in the 
        Shenandoah Valley, VA--We are providing $600,000 to Virginia 
        Tech to work with small dairies in the Shenandoah Valley to 
        help Virginia dairy farms achieve on-farm phosphorus balances 
        over time. VA Tech will provide technical assistance to dairy 
        farmers to help them develop a plan to achieve phosphorus 
        balance over time, and financial incentives to install 
        practices and technologies to address these imbalances. With 
        matching funds, the total funding level for this project is 
        $1.4 million.

   Testing Manure Injection Technologies to Reduce Nutrient 
        Losses--We are providing $786,000 to evaluate manure injection 
        technologies on no-till systems to reduce ammonia emissions and 
        nutrient runoff from dry poultry and dairy manure, while 
        improving nutrient up-take by crops in south central PA, the 
        Shenandoah Valley VA, the Delmarva Peninsula, and NY.

    We are pleased to see many states making a commitment to learn from 
these projects and advance technologies for finding alternative uses 
for excess manure nutrients. These innovations will keep farmers in 
business over the long-haul by moving them to a more sustainable way of 
managing manure. We are working with our state partners to credit the 
nutrient reduction benefits of these technologies.
    EPA also recognizes that it is important for partners to have 
access to the tools and data we are using for the TMDL. In response to 
this need, EPA has provided workshops for each state on how the 
decision support tools work and how to submit data on nutrient and 
sediment controls to assess impacts of various management actions on 
Bay water quality. EPA also helped to create and provide training for 
tools that allow states to quickly and easily assess various pollution 
reduction strategies for their Bay cleanup plans.

Follow up from the March 16, 2011 Hearing
Data Coordination
    At the March 2011 Subcommittee hearing, USDA and EPA pledged to 
continue their joint efforts to refine and increase the level of data 
available for understanding the implementation of conservation 
practices by farmers in the Chesapeake Bay region. Since the hearing, 
we have developed a joint workplan that outlines the actions we will be 
taking with USDA to continue our data collaboration. We provided this 
workplan to Chairman Thompson in June. Implementation of this workplan 
will further refine our accounting of agricultural conservation 
practices throughout the Bay watershed, bolster the scientific 
defensibility of the benefits of agricultural conservation practices, 
and improve consistency of data used in our agencies' respective 
decision support tools.

Agricultural Nutrient Policy Council (ANPC) Report Review
    There was also discussion at the March 2011 hearing about the 
Agricultural Nutrient Policy Council (ANPC) report that claimed 
discrepancies between the CBP Watershed Model and USDA's Conservation 
Effects Assessment Project (CEAP) study. Earlier this year, the 
Chesapeake Bay Program's Scientific & Technical Advisory Committee 
(STAC), brought together a group of independent scientists to review 
the findings of the ANCP report. Reviewers included representatives 
from the U.S. Geological Survey, Virginia Tech University, Penn State 
University, University of Maryland and the Maryland Agricultural 
Experiment Station.
    The STAC found that the CEAP study and the Watershed Model 
developed by the Chesapeake Bay Partnership are in approximate 
agreement on both the nutrient and sediment loadings from agricultural 
lands in the Chesapeake Bay watershed at the large-basin scale and that 
there is more work to do in reducing nutrient and sediment loads on 
cropland. This affirms that conservation works and more conservation 
will help improve the health of local waters and the Bay.

Economic Analysis
    Last, when EPA Deputy Administrator Bob Perciasepe testified before 
this Committee in March 2011, there was discussion about both the costs 
and the benefits of implementing the Chesapeake Bay TMDL. Following the 
hearing, Mr. Perciasepe directed EPA's Chesapeake Bay Program Office to 
develop an estimate of the costs associated with the WIPs. In addition, 
he directed EPA's National Center for Environmental Economics to 
develop an analysis of the benefits associated with achieving water 
quality standards in the Chesapeake Bay. We are currently working 
closely with both Federal and state partners to develop these analyses. 
For example, the costs of individual practices to be implemented in the 
watershed have been provided to all Bay watershed states for review. 
EPA also sponsored a 2 day workshop on October 31 and November 1, 2011 
to discuss approaches to the estimation of TMDL benefits with national 
and regional experts on these topics. EPA's Chesapeake Bay Program 
Office and National Center for Environmental Economics are scheduled to 
complete their initial analyses of costs and benefits by mid-late 2012, 
following completion of the Phase II WIPs. At that time, the costs 
analysis is expected to be complete, as will significant components of 
the benefit analysis. Some parts of the benefits analysis, however, 
require more laborious methodological approaches. Those parts of the 
analysis will be completed by the summer of 2013. Both studies will 
incorporate the final Phase II WIPs, due in March 2012.

Conclusion
    Rural communities and farming are indeed a vital part of the 
Chesapeake Bay watershed's culture, economy and way of life. 
Maintaining a thriving agricultural community is essential to the long 
term sustainability of the Chesapeake Bay watershed and its ecosystems. 
I commend the farming community for the hard and innovative work that 
they have done in the past years.
    The work we are undertaking is not new. Although the process and 
framework of the Chesapeake Bay TMDL may be new, the level of effort to 
meet the goals has been nearly the same for more than a decade. 
Implementing the Bay TMDL is simply the next step in this long term 
effort.
    We look forward to continuing to work with this Subcommittee and 
the agricultural community to protect and restore local waterways that 
feed into the Chesapeake Bay.
    Thank you for the opportunity to testify today, I am pleased to 
answer any questions.

    The Chairman. Well, thank you, Administrator Garvin, for 
your testimony.
    The chair would like to remind Members that they will be 
recognized for questioning in order of seniority for Members 
who were here at the start of the hearing. After that, Members 
will be recognized in order of arrival. I appreciate Members' 
understanding.
    And with that, I will recognize myself for the first 5 
minutes.
    Mr. Garvin, you mentioned in your testimony that the EPA's 
Chesapeake Bay Program Office is developing a cost associated 
with the WIPs, cost-benefit analysis. I read that within your 
testimony. This is more logistics. When can we expect to see 
the results of that analysis and are you working with the 
states to come up with those figures?
    Mr. Garvin. I will answer in reverse order. We are working 
with the states. A number of states have already put together 
some information on cost and benefits as they were going 
through Phase I, so we are certainly looking to utilize that 
information, but we are consulting with them and with USDA on 
that information. The timing of it is probably we are looking 
at the middle part of next year on the cost.
    One of the things that we are taking into account is as the 
Phase I strategies were put together by the states and as they 
are more refined in Phase II, we want to make sure that we have 
a good understanding of what those balances are to help inform 
the costs. One of the things that we recognize is the fact that 
there are different mechanisms, different approaches, different 
cost effectiveness that you can get at when looking at all the 
sectors in the TMDL and subsequently looking at what decisions 
were made in those areas that will help inform that discussion.
    The Chairman. Obviously, the model has been a significant 
point of controversy, and I appreciate the response in June 
where it appears that it is a work in progress. I am concerned, 
though, that the mandates as a result of the model results are 
not as flexible. I think everyone knows that there is 
considerable controversy over the modeling on which the TMDLs 
are based versus the model USDA has put forward. And even 
taking USDA out of the picture, the differences between 
communities that sit in proximity to each other, some that are 
in surplus on sediments and some that have to remove sediments.
    And so at the last hearing on TMDL, this issue was 
discussed at great length. What has EPA done to reexamine the 
basic Chesapeake model this TMDL utilizes? And how much 
confidence do we have in the outcomes of this, the data that 
really is driving a very expensive response by farmers and 
communities and all those who live within the watershed?
    Mr. Garvin. Congressman, we have a great deal of confidence 
in the tool that is the model, and the model is really--it 
summarizes a model but there are several different models that 
go into that model and the number of things that make up the 
suite of tools that we use to help inform decisions. The model 
is a tool that we use. We have worked closely with USDA. We 
have looked at consistency of information. Many of the issues 
that we are dealing with now are not related to the mechanism. 
It is related more to the input to the mechanism.
    We recognize that there is information we do not have. 
Clearly, we can't input information into the mechanism that 
doesn't exist, and so we are working very closely, particularly 
if you are talking about agricultural processes on the ground. 
And so we are looking at working and we have been working very 
closely with USDA and the states and other areas to make sure 
that information is both being tracked, being verified, and 
then being provided to us so that we can account for that.
    The Chairman. My concern obviously is kind of a cart-
before-the-horse type thing. You know, we need good data so 
that we know that the taxpayers, whether it is a local level or 
out of their pockets, the agriculture community or the Federal 
taxpayers make investments, that they are going in for the 
right reasons in targeted areas.
    When Administrator Jackson testified before the full 
Committee earlier this year, she stated that this process was 
largely driven by a settlement agreement between the Chesapeake 
Bay Foundation and the EPA. Would you agree that that is kind 
of what pulled the most recent----
    Mr. Garvin. I don't know exactly what the Administrator was 
referring to that you are citing. The actual TMDL is actually 
required and has been required for the last 15 years or so. And 
actually, back in 2000 when the partners agreed to the 
Chesapeake 2000 agreement that said we would work and put on 
track by 2010--meaning water quality standards for the 
Chesapeake Bay--there was a recognition back then that if we 
did not make that goal that we would start beginning the 
process of creating a TMDL.
    And subsequently, this has been a long-standing requirement 
that has been hanging out there. It has been actually a result 
of a number of court settlements from back in the early 1990s 
across the country in which--not to get into too much detail--
the waters that are on the impaired list, the 303(d) list, 
needed to have TMDLs established. So this has been something 
all the partners have been aware of was coming if the efforts 
that we were undertaking were not going to get us to meeting 
water quality standards or at least on a significant path to 
meeting water quality standards.
    The Chairman. Well, I just want to revisit: Administrator 
Jackson went on record to the Committee stating that this 
process was largely driven by a settlement agreement between 
the Chesapeake Bay Foundation and the EPA. In terms of 
accountability and transparency, do you think it is a conflict 
of interest that there are two EPA employees, Jeff Corbin and 
Chuck Fox, who both have been effective and instrumental in the 
development of the Bay TMDL, were both formerly employed by the 
Chesapeake Bay Foundation?
    Mr. Garvin. No, I don't believe there is a conflict of 
interest.
    The Chairman. Okay. I now recognize the Ranking Member for 
5 minutes.
    Mr. Holden. Well, thank you, Mr. Chairman.
    Administrator Garvin, getting back to the model, you say 
you believe it has credibility but I am looking at an article 
from Agri-Pulse citing that a county in Virginia would have to 
reduce nitrogen by eight percent, phosphorous by 11 percent, 
and sediment by 20 percent but another run from the EPA model 
for the same county would have to make no reductions in 
nitrogen and has a 20 percent surplus in phosphorous and room 
for 350 percent more sediment. Now, how can we have faith that 
you are moving forward with credibility when two variations in 
the models by EPA directly contradict each other?
    Mr. Garvin. I don't know what the two different models you 
are referring to. I think what you are referring to is the same 
model at two different scales, and one of the reasons for the 
October 5 letter to the states suggesting that they do not have 
to, though it is still up to them to make the decision--have to 
articulate those more local Phase II plans in pounds at the 
local level as opposed to a narrative on practices that would 
be calculated at the larger river basin level.
    There is a recognition amongst all of us that the model is 
much more effective at the larger basin level, that there are 
some irregularities at the finer scale. I liken it to my wife 
the other day asking me to hang a picture and it was between a 
doorjamb and the fireplace and there was a sconce in the way 
and I only had a yardstick. So I wasn't able to get the 
yardstick all the way up to the point where I had to measure, 
so what I did was I had to use a little bit of common sense and 
eye up a little bit on where the point is that I was going to 
put the drill and hang the picture. What the model does at the 
larger basin scale is give you the big picture, allows the 
jurisdiction to figure out what are those practices to get up 
to that point, how do they work when you start giving them up 
at the local level, and then make the calculations. Though some 
states may want to use it and then kind of use some discretion 
on how----
    Mr. Holden. All right. Thank you, sir. And is EPA doing 
onsite farm visits?
    Mr. Garvin. Yes. We are doing compliance visits and a 
couple----
    Mr. Holden. Under what authority is EPA doing onsite farm 
visits?
    Mr. Garvin. It would fall under section 308 of the Clean 
Water Act is the authority but the goal of it is we look at 
them more as educational visits that we are working with the 
conservation districts and others to help educate us and inform 
both us, the states, as well as the farmers on expectations. It 
also helps us to have a better sense as we look at review 
assurance on planning.
    Mr. Holden. Do you intend to visit every farm in the Bay 
region, the watershed?
    Mr. Garvin. We do not. We have been focusing on generally 
areas that are high concentration and have a heavy impact on 
the Bay in helping to work with those communities. You know, 
one of the areas we went in was southeast Pennsylvania where 
there was a high level of Plain Sect farmers who were not 
necessarily engaged in the discussion and it was an opportunity 
working with the conservation districts to meet with them and 
talk to them about what the expectations are and for us to be 
educated and informed on what they actually have going on, on 
the ground.
    Mr. Holden. Are farmers given notice that you are going to 
make the visit?
    Mr. Garvin. Yes.
    Mr. Holden. Okay. And Administrator, from your testimony I 
hear that you testify that you are working with the states, but 
I have to tell you Secretary Krancer who is in the next panel--
in his written testimony he describes EPA as telling DEP to get 
over it or get on with it, and a similar statement was made by 
an official from Virginia. So that doesn't seem to reflect the 
good working relationship. So I wonder if you can elaborate on 
the comments that are in the Secretary's testimony.
    Mr. Garvin. Yes, absolutely. I can't refer to the specific 
comments. Obviously he will be testifying to those. I can 
comment on kind of the notion of what we have been working with 
all the Bay partners, with all the states in looking to address 
the issue of restoring the Chesapeake Bay. We can't just keep 
standing at the starting line and saying, this 10K is an awful 
long run to take. We need to start making progress towards 
implementing the TMDL.
    The wisdom of the partnership back in 2008 led by the 
governors and the Administrator and the mayor of D.C. was 
breaking this up into 2 year increments, breaking these up into 
small pieces so that we can continue to adapt, we can continue 
to learn, we can continue to make changes over the course of 
the 15 years to address issues learned from what we are doing 
on the ground, share effectiveness with other jurisdictions on 
those type of things. And if we continue just to sit back and 
say this is a daunting effort and not move forward, we are 
never going to get there.
    And so what we recognize and what we are committed to is a 
process of adaptive management, a process of continuing the 
dialogues. I have assigned senior managers at EPA to work with 
senior managers in all the states on a consistent basis to 
continue to hear concerns and figure out how we can evolve and 
adapt based on what those issues are.
    Mr. Holden. Well, thank you. Just keep in mind it is a 
partnership.
    Mr. Garvin. Absolutely.
    The Chairman. I thank the gentleman and recognize Mr. 
Goodlatte from Virginia for 5 minutes.
    Mr. Goodlatte. Thank you, Mr. Chairman, and thank you for 
holding this hearing.
    Administrator Garvin, welcome.
    Mr. Garvin. Thank you.
    Mr. Goodlatte. Standing at the starting line? Are you 
serious? I mean for 25 years farmers, localities, and others 
across the Chesapeake Bay region have substantially reduced the 
amount of nitrogen, phosphorous, and sediment going into the 
streams that go into the Chesapeake Bay and now you are 
claiming that we are standing at the starting line? There has 
been tremendous cooperation between local governments, state 
governments, and private entities, homebuilders, farmers, and 
others to achieve substantial reduction in these nutrients 
going into the Chesapeake Bay, and yet you claim that we are 
standing at the starting line.
    Now, you mention in your testimony that after I and many 
others have complained bitterly for years that all of this is 
being done without having done a cost-benefit analysis that now 
finally you are doing a cost-benefit analysis. Good for you. I 
am glad. But how can you make effective decisions about what 
should go into a TMDL and how can you expect the states to 
comply when you haven't even given them the evidence of what 
needs to be done and how it will benefit the Chesapeake Bay? We 
don't even know the extent to which the billions and billions 
of dollars that are going to be spent here will benefit the 
Bay, do we? Because you haven't done a cost-benefit analysis 
yet and yet you are expecting us to be ``moving ahead instead 
of'' as you say ``standing at the starting line.''
    Mr. Garvin. Congressman, my reference to standing at the 
starting line was the implementation of the TMDL. I absolutely 
agree with you and concur with you there has been a lot of 
great things that have occurred on the ground in the ag sector, 
urban and suburban storm water, and with wastewater treatment 
plants. My reference is the fact that if we wait for 
implementation of the TMDL until we have what is considered to 
be all the information, all the data----
    Mr. Goodlatte. Like an effective model and a cost-benefit 
analysis? Don't you think we should have a model that is 
effective that would indicate what kind of things will work and 
what won't work and a cost-benefit analysis to tell us whether 
this is even worth doing the way the EPA says to do it instead 
of the way the states had been doing it until you leaned on all 
of them?
    Mr. Garvin. We believe we have an effective model. With 
regard to the cost-effective analysis, there have been a number 
of cost-benefit analyses done by a number of folks over the 
course of the years, so it is not like the information doesn't 
exist. What we are looking to do is do it based on the Phase I 
TMDLs, based on what comes out of the Phase II TMDLs when we 
actually have those strategies and plans laid out on what the 
potential cost and benefits are for those activities. There 
have been blue ribbon panels in 2004, NOAA, University of 
Virginia, University of Delaware, many other academia----
    Mr. Goodlatte. But not a cost-benefit analysis. They looked 
at and offered their opinions about various things but they did 
not compare the costs with the benefits to be derived by the 
Bay and weighed those two together.
    Now, let me ask you this. On August 30, President Obama 
sent a letter to Speaker Boehner outlining regulations that 
will cost $1 billion or more. Virginia estimates that the Bay 
TMDL will cost the Commonwealth $7 billion alone. You have a 
witness on the next panel sitting behind you who is a member of 
the city council of a small city in my district, Lynchburg, 
Virginia, that has already spent hundreds of millions of 
dollars in compliance and estimates that these new requirements 
will cost them well over $100 million or more to comply.
    I believe that other states have similar estimates and this 
does not account for the cost incurred by localities, 
businesses, farms, and families. However, the Chesapeake Bay 
TMDL and the WIPs are not included in the list of costly 
regulations that the President outlined. Can you explain this 
omission? I am talking about $20 billion or more, not $1 
billion.
    Mr. Garvin. The simple answer, Congressman, is the TMDL is 
not a regulation.
    Mr. Goodlatte. It is not a regulation?
    Mr. Garvin. No.
    Mr. Goodlatte. So what is it?
    Mr. Garvin. TMDL is a strategy, a plan to meet the 303(d) 
requirements of the Clean Water Act.
    Mr. Goodlatte. And what will that result in localities and 
farmers and state governments and homebuilders and others 
having to do?
    Mr. Garvin. Put on-the-ground activities to improve water 
quality.
    Mr. Goodlatte. And will they be able to do those 
voluntarily or are they going to have to be required to do 
those?
    Mr. Garvin. Both.
    Mr. Goodlatte. But that is not a regulation?
    Mr. Garvin. The TMDL is not a regulation.
    Mr. Goodlatte. Well, that is a pretty amazing claim. You 
think people should feel good about the fact that the President 
left off a list something that is being pushed down from the 
Federal Government onto the states and then onto farmers and 
others and told, well, it is not on the list of things we 
should be concerned about, the impacts on jobs and economic 
growth because it is not a regulation? I find that 
unbelievable.
    Mr. Garvin, you participated in a meeting with the 
Chesapeake Bay jurisdictions on September 16 in which most of 
the jurisdictions expressed concerns about how the model 
assessed the use of nutrient management plans. In that meeting, 
the jurisdictions produced a chart that showed that in many 
counties, the use of nutrient management plans actually 
increased nutrient application rates in the upgraded 5.3.2 
model. Do you agree that nutrient management land plans as 
identified in the model result in higher rates of nutrient 
application?
    Mr. Garvin. No. What I agree with is the fact that that is 
an indicator that there is too much manure in that area in 
which that data came from. Ultimately, the way the model works 
and the way the law in Virginia works is the fact that you 
can't apply manure to lands unless you have a nutrient 
management plan. Subsequently, the amount of manure that exists 
is credited to nutrient management plan lands, which is an 
indicator that what needs to happen is more nutrient needs to 
be dealt with so it is not being land applied.
    Mr. Goodlatte. Is it true that one of the items you 
committed to fix in the previous model was related to how it 
evaluated nutrient management plans?
    Mr. Garvin. Yes, the two areas in which we had agreed to 
make modification were urban/suburban land cover, as well as 
nutrient management plans.
    Mr. Goodlatte. Can you give me a timeline for these fixes?
    Mr. Garvin. That was done back in June.
    Mr. Goodlatte. I might ask one more question, Mr. Chairman, 
with your leave?
    The Chairman. Yes.
    Mr. Goodlatte. One of the major complaints about the model 
is that it does not account for non-cost-shared nutrient 
management plans. Has this been fully corrected in the model? 
Additionally, is the model giving credit for other things 
farmers are doing? For example, some farmers may not agree to 
fence off streams on their land by 35 feet. Picture this: if 
you have a stream meandering through your farm for a mile and 
you fence it off on both sides, in addition to the cost of 
doing that, you are fencing off 70 feet times 5,000. That is 
350,000 square feet of usable pasture land, more than 8 acres. 
But instead they do it to 5 feet, which keeps the cattle out of 
the streams and has a substantial benefit. Does the model 
account for those practices?
    Mr. Garvin. With regard to non-cost-share conservation 
practices being credited in the mechanism, it is not a model 
correction; it is an input issue. I absolutely agree with you. 
There are things going on, on the ground, that we need to know 
and we are working closely with those folks who track and 
monitor that to provide that information to us so that it can 
be credited. We also recognize that there are additional areas 
where nobody has the information and we are working to figure 
out what is the best way to get that information. For example, 
as I referred to earlier, the Plain Sect community and their 
way of life, government interaction is done in a different way, 
and so our ability to work and find out what are those 
practices going on, on the ground, so that they can be credited 
in those areas is an important activity and we are working very 
closely with USDA and states on making sure that information is 
inputted.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    The Chairman. I thank the gentleman and recognize Mr. 
Owens, from New York.
    Mr. Owens. Thank you.
    Mr. Garvin, thank you for testifying today. I want to ask 
you a couple of questions about the TMDL model that is 
specifically focused on New York State. We have heard from our 
constituents that there is a difference between the model 
estimates and the actual recording that takes place on the 
ground, the actual test results. How is that factored in or is 
it factored in?
    Mr. Garvin. One of the bases of the model is the input of 
the data on actual water quality that we know. We recognize 
that there are some special issues in New York based on their 
location, based on the fact that they have been actually 
reducing and not growing and we have been working very closely 
with the State of New York to address those issues. And I 
believe that in the very near future, next month or so, we will 
have a path forward that addresses those concerns.
    Mr. Owens. So we will be able, then, to actually have the 
real testing data included as opposed to model data.
    Mr. Garvin. The real testing data is already included. What 
it is going to do is reflect some special circumstances in New 
York that address some of the concerns they have about growth 
and location and contributions to the Bay.
    Mr. Owens. Another question that has been raised by my 
constituents is the need or the difference between the 
delivered load and the edge-of-stream load, and, fundamentally, 
the question is that you do have some dilution that occurs as 
the water moves downstream, and therefore, the load is in fact 
different than the measurement that is currently being 
proposed. How do you deal with that?
    Mr. Garvin. That is actually one of the things that we are 
addressing in New York as well as in West Virginia, and we have 
folks who are working with them to account for their concerns 
in that area.
    Mr. Owens. And finally, when you do your cost-benefit 
analysis, are you taking into account the increase in cost to 
the consumer for production of food in the ag community that 
arises out of increased regulation?
    Mr. Garvin. I will have to get back to you on that, 
Congressman. I am not sure all the factors that are going into 
the analysis, but we can make that available to you and to the 
chair and the Subcommittee.
    Mr. Owens. If it is not included, would the EPA consider 
including that as a factor?
    Mr. Garvin. Well, I will go back and have a conversation 
and figure out what is being included and what is not and we 
will get back to you.
    [The information referred to is located on p. 83.]
    Mr. Owens. Thank you very much.
    I yield back.
    The Chairman. The gentleman yields back. I now recognize 
Mr. Gibbs, from Ohio.
    Mr. Gibbs. Thank you, Mr. Chairman.
    Obviously, I am the only one on the Committee right here 
that is not in the Chesapeake watershed, so I don't know all 
the specific data that you guys have, but I do have a couple of 
questions.
    I am just curious because my experience in my area talking 
about the modeling and stuff, on stream monitoring programs, 
who is doing that? Is that in partnership with the local 
county's soil and water districts, state EPA? I am curious how 
rigorous your monitoring process is.
    Mr. Garvin. I appreciate that and that is kind of the 
lifeblood of what we are doing. We have somewhere upwards of 
250 monitoring points throughout the Chesapeake Bay watershed. 
We are actually undertaking an effort to increase that so that 
we have the most amount of data and information that we can to 
help inform on the discussions. We are also working with states 
and local communities to get information and data on what they 
have on the impacts.
    You know, clearly, when we are moving forward in this 
approach and we are looking to restore the Bay--and quite 
honestly to restore any water body--the more information we 
have, the better information we have to inform our decisions 
and be able to measure. One thing that we tend not to touch on 
is the fact that we deal with the Chesapeake Bay watershed in 
its entirety. It is 64,000 square feet and it is 17 million 
people, but there are going to be different parts of the Bay 
watershed that are going to respond faster than other parts of 
the watershed. We want to make sure that we understand where 
those are and what the impacts are.
    Mr. Gibbs. I guess I would be an advocate that you have to 
break this down in subsets----
    Mr. Garvin. Yes.
    Mr. Gibbs.--and determine what is happening, especially 
point source areas and non-point source areas----
    Mr. Garvin. Yes.
    Mr. Gibbs.--especially making a determination of non-point 
is a lot more challenging as you know. And my experience in the 
past, you have in different streams different flow rates, 
weather conditions, rainfall that can impact it. And I know in 
my area in the past years we had an issue with the EPA at one 
time. They were doing what I call drive-by evaluations, 
windshield drive-bys and weren't getting the right data. And so 
I guess being an outsider of the Chesapeake, that is when I 
would question and make sure that the monitoring process to 
develop the model makes sense.
    And the second part of that, in my one watershed we had 
been involved for about 10 years of a nutrient trading 
program----
    Mr. Garvin. Yes.
    Mr. Gibbs.--and how that has been so successful, they have 
lowered the load into that watershed working with a cheese 
manufacturer and working with those local farmers around there, 
and it has been real successful and kept the jobs and the 
economic growth. Are there any type programs like that going on 
in this watershed?
    Mr. Garvin. Yes, Congressman. The TMDL actually had a 
section, an appendix that dealt with a placeholder for trading. 
A number of the states came in with their state strategies that 
relied--in varying degrees on trading. What we have been doing 
with the states currently is we have been meeting with them, 
discussing what trading programs they do or they don't have, 
getting a better sense of what they are. One of the issues is 
making sure that when we are doing trading we are not double 
counting, when we are doing trading that there is a common 
exchange rate so that we are talking apples and apples when we 
are looking at numbers. And so we have been working close with 
the states on that, and I am hoping in the next couple of 
weeks--and we will share this with the Subcommittee--that we 
will be providing some feedback to the states on that review.
    [The information referred to is located on p. 84.]
    Mr. Gibbs. Of course, to me that would go back to having a 
very rigorous monitoring program.
    Mr. Garvin. Yes.
    Mr. Gibbs. And are there soil and water county districts 
near that area?
    Mr. Garvin. Yes.
    Mr. Gibbs. So you have a close working relationship with 
the NRCS and the soil and conservation services in each county?
    Mr. Garvin. Absolutely.
    Mr. Gibbs. Okay. Because, I just can't emphasize enough--
the monitoring--to develop a model that is accurate has to be 
based on sound data from the monitoring.
    So thank you, Mr. Chairman. I yield back.
    The Chairman. Thanks, Mr. Gibbs.
    We are going to have a few additional questions. I now 
recognize Mr. Goodlatte.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    Mr. Garvin, in February of 2008, the Chesapeake Bay 
Program's Scientific and Technical Advisory Committee, or STAC, 
told the EPA that its Chesapeake Bay models, ``are not 
appropriate for development and implementation of TMDLs at the 
local watershed scale.'' In your letter to Bay Jurisdictions on 
October 5, you admit that there are areas in the watershed, 
``where there are limitations to the application of the 
Chesapeake Bay Program watershed model at a finer scale, finer 
scale than the major basin.'' However, the final TMDL based off 
the model contains thousands of allocations. Do you understand 
the concerns that this raises about the accuracy of the model 
and the TMDL which has developed by this model?
    And throughout this process, the EPA has asked the states 
to provide reasonable assurance of plan implementation, but 
what reasonable assurance has the EPA provided that the model 
that is driving this whole process is accurate or that the 
loading reduction numbers the EPA has distributed to the states 
are accurate?
    Mr. Garvin. The TMDL was developed and the tool or the 
model that was used was at the larger major basin scale, not at 
the finer scale, which is actually the subject of the October 5 
letter, which is a recognition that there are some limitations 
at the finer scale, not that it can't be used as a planning 
tool that the states can use. But when we are actually doing 
calculations on effectiveness, we are going to do it at the 
larger scale.
    Mr. Goodlatte. But the TMDL itself includes thousands of 
allocations based upon a tool that you admit is not ready for 
those finer allocations.
    Mr. Garvin. We believe that at the scales that were done 
for the TMDL the model is effective.
    Mr. Goodlatte. What is driving the timeline to have the 
Phase II WIP completed by March 2012? Is there a legal 
requirement or a statutory requirement to meet this deadline?
    Mr. Garvin. What ultimately is driving it is the schedule 
that was laid out with the end point being 100 percent of the 
practices on the ground by 2025, 60 percent of the practices on 
the ground by 2017.
    Mr. Goodlatte. There is no legal requirement that you take 
a model that is flawed, that isn't ready for primetime or for 
as you say ``finer scale,'' but you have nonetheless imposed 
thousands of allocations at that finer scale. There is no 
statutory requirement, no legal requirement to meet that 
deadline, is there?
    Mr. Garvin. There is a settlement--well, let me back up. We 
set the schedule which was actually 5 months earlier than what 
the schedule is that we are on now. We expanded that schedule 
at the request of the states for some additional time. We also 
again in the October 5 letter changed our approach to the Phase 
II allowing the states the option of going to a narrative----
    Mr. Goodlatte. Is it more important to develop 
implementation plans with the correct science or to meet an 
artificial deadline?
    Mr. Garvin. I believe that we have the correct science and 
I believe that we need to keep on a schedule----
    Mr. Goodlatte. But you have admitted that you don't have 
the correct science. You said it is not ready. You said you 
don't have a model that works at the finer scale, and yet you 
are asking individuals in communities and property owners of 
various kinds and so on to begin implementing something that is 
not ready. And Mr. Garvin, you have not committed to updating 
the Bay model until the Phase III WIPs are implemented in 2017. 
Why the delay when there are multiple 2 year milestones in the 
interim?
    Mr. Garvin. What we have committed to is a reevaluation of 
the process in 2017. We will----
    Mr. Goodlatte. What are we supposed to do in the meantime?
    Mr. Garvin.--continue to evolve the model, evolve the 
inputs that go into the model between now and 2017. What we are 
looking to do in 2017 is a wholesale evaluation based on what 
we learned from 2 year milestones, based on what we learned 
from the activities on the ground to make determinations, 
working very closely with the states and other Federal 
partners, in figuring out what is the best process to get us 
from 2018 to 2025. It is basically a mid-course check on where 
we are, our effectiveness on what we are doing and how we get 
to the end goal of 2025.
    Mr. Goodlatte. Even though, as you say, standing at the 
starting line of the TMDL, you guys weren't ready to go. You 
don't have a model that works. You have a model that you 
acknowledge does not work at the ``finer scale,'' and yet you 
expect everybody to live by it, but maybe by 2017, 6 years from 
now, you will get around to telling us whether or not it was 
right.
    Mr. Garvin. I believe we are ready to go and that is the 
process that all of the partners are undertaking at this time.
    Mr. Goodlatte. Because you have threatened them if they 
don't undertake it with actions that most of us here on this 
panel who are in the United States Congress and involved in 
writing laws don't think the laws of the land allow you to do.
    Thank you, Mr. Chairman.
    The Chairman. I thank the gentleman.
    Mr. Garvin, just a couple final questions from me. You 
know, this is mainly farmers and communities, specifically in 
Lycoming County and then outside the district points east, as 
you are aware, we experienced some pretty tremendous flooding--
it has been about a month ago--and I saw things going down the 
streams that were just--well, let us put it this way, there are 
a few cabins that are now in the Chesapeake Bay that originally 
were in Pennsylvania. Or maybe they haven't made it there yet 
but they are coming. I don't know how long it takes for that 
water to flow, a very long time.
    And we all saw on the news a significant amount of runoff, 
sediment, a lot more than just sediment that went directly into 
the Susquehanna River. And I read through the testimony today 
and it talks a lot about--I didn't see the word turbidity but I 
saw, in terms of some of the measurements in the Bay 
cloudiness, dead zones, those types of things. And I have to 
wonder, when we are having these 100 year floods a whole lot 
more than 100 years it seems like and there is not much we can 
do to control those, certainly can't prevent them. They are 
going to occur. But my question is with these hundreds of 
millions of dollars of some of these communities and the costs 
of which we are spending on an annual basis, is there 
consideration of what went directly into the Chesapeake River 
and ultimately into the Chesapeake Bay? Is that factored into 
the modeling or is that impacted in--I have to wonder how much 
sediment as a result of 48 hours of flooding compared to 20 
years of agriculture wind up in the Bay?
    Mr. Garvin. That is a very good question, Congressman, and 
clearly that was one of the issues when initially everybody was 
concerned about Irene and it was actually tropical storm Lee 
that really hit your portion of the district and had a larger 
impact on the Susquehanna. You know, we recognize in all these 
conversations that we have is that there are going to be ebbs 
and flows as it relates to the impacts of Mother Nature, be it 
droughts in some times and excessive rain and potential 
flooding at other times. So we try to factor that in both in 
our ability to measure success of the practices that are going 
on the ground, as well as being able to take a snapshot of 
where we are and where we need to get to.
    With regards to the storm a couple months ago or I guess a 
month and a half ago or so, USGS, Army Corps, others had 
already had folks out there looking at, as I said, the concerns 
with Irene that did not necessarily develop, and so they were 
actually in place already doing additional monitoring before 
and after tropical storm Lee to help characterize what the 
potential impacts might be.
    The Chairman. And so will you be able to provide this 
Subcommittee measurements in terms of--you have given us some 
testimony and through the testimony of the other witnesses we 
know approximately how many pounds of sediments are targeted 
for each state and we have estimates of the tremendous 
reductions since about 1985, if I recall correctly, from the 
testimony. It would be really interesting to see the estimates 
of the amount of sediments that go into the Bay that are going 
to be largely unpreventable and are going to occur on a 
reoccurring basis. I would love to see that number compared to 
the TMDL plan that is out there as well.
    Mr. Garvin. We will get you whatever information we have or 
that we have collected from other Federal agencies and states. 
The State of Maryland and the Commonwealth of Virginia were 
also out doing some monitoring after Irene.
    The one thing I do want to note and this was at least 
initial feedback was that the timing of the storm--let me put 
it this way--the impacts could have been greater if it had 
happened earlier in the summer. So that may turn out to be 
something that diminishes at least the overall impact.
    The Chairman. My last question is actually kind of a 
clarification. In your testimony and what you have testified 
on, you seem to infer that the TMDL model is effective but the 
effectiveness at this point is limited at--I don't recall the--
it was a large Bay scale or there was a particular term you 
used.
    Mr. Garvin. The major river basin scale.
    The Chairman. Major----
    Mr. Garvin. And it is effective at lower levels than that 
but we recognize that it becomes less effective the finer the 
scale becomes. It doesn't limit it from being a valuable tool 
to be used to help inform decision and I can't stress enough 
that the policy decisions are made by the policy-makers. The 
model helps to inform it, as well as data that we get from all 
corners of the watershed. The same thing with states in 
understanding what is happening, the dynamics that are 
happening on the ground, where they feel that what sectors they 
can make decisions based on. And so the model is one tool, a 
big tool that is used to help inform those decisions.
    The Chairman. All right. Well, I know Mr. Goodlatte would 
agree with me. We are concerned with the TMDL model in that it 
is being driven to make decisions on a local level and it has 
not only been proven to be inaccurate, it has been shown to be 
inconsistent with just some of the testimony that we have 
heard, that has been reported, the discrepancies in terms of 
numbers that have been set.
    And that really concerns me because in your testimony you 
describe on the bottom of page 4, Phase II WIPs explain how 
states will work with their localities--now, it is taking it 
down to the local level--to get 60 percent of the needed 
restoration practice in place by 2017, 100 percent of the 
practices in place by 2025. Bottom line is we need a TMDL model 
if we are going to use one that we are confident that doesn't 
have the discrepancies that are showing up in this one. And so 
I have grave concerns about moving forward when the science 
isn't settled.
    And that is not to say it is not possible to do that and it 
is not possible to come up with a model that actually is 
accurate for the full river basin, for states as a whole, and 
for localities, especially localities, because that is where a 
lot of these remedies are placed and that is where the 
financial burden is placed, on localities. I think the 
responsible thing is to make sure we tighten up that model. I 
appreciate the target improvements that were identified by the 
EPA in the letter that was sent in June. I just think that 
there is more work to do.
    So I want to thank you for taking the time to come down 
from the Keystone State and being here and testifying today.
    Mr. Garvin. Thank you, Congressman.
    The Chairman. Thank you.
    Now, the folks that are on the second panel, I want to 
welcome our second panel witnesses to the table as we get set 
up.
    Well, now I would like to welcome our second panel of 
witnesses to the table. We have the Honorable Michael Krancer, 
Secretary, Pennsylvania Department of Environmental Protection 
down from Harrisburg, Pennsylvania; we have the Honorable 
Michael Brubaker, Chairman of the Chesapeake Bay Commission--
the Commission is based out of Annapolis, Maryland; Mr. Carl 
Shaffer, President of the Pennsylvania Farm Bureau Federation, 
Camp Hill, Pennsylvania; Hon. Turner Perrow, Lynchburg City 
Council, Lynchburg, Virginia.
    Secretary Krancer, please begin when you are ready.

        STATEMENT OF HON. MICHAEL L. KRANCER, SECRETARY,
            PENNSYLVANIA DEPARTMENT OF ENVIRONMENTAL
                   PROTECTION, HARRISBURG, PA

    Mr. Krancer. Sure. I appreciate it. First, it is an honor 
for me to be here in front of a couple of my home Congressmen. 
If you don't mind, I am going to adopt Representative Goodlatte 
as my honorary home Congressman because I went to UVA and then 
I went to Washington and Lee. Judge Sweeney taught me trial 
practice and my classmate, Morgan Griffith, is now a colleague 
of one of yours. So we were really proud to send him to the 
United States Congress.
    Mr. Goodlatte. We have a lot of ties that bind.
    Mr. Krancer. Yes, we do. Anyway, again, thanks for having 
me. And I want to just hit on a couple of notes. You have seen 
my written testimony and I certainly can talk about that and I 
appreciate the opportunity for you to ask me questions. 
Congressman Goodlatte hit the nail on the head about the 
deadlines and about what is really driving this. And I know the 
regional Administrator had a little trouble grasping the 
concept. Apparently, his boss did not when she was in front of 
the whole Committee. This is a settlement agreement that is 
driving these immediate deadlines. These are self-imposed 
deadlines with friendly litigation partners. I think that was 
also pointed out by the Congressman. And I have pointed that 
out before and I talked about it in an article that appeared in 
the Altoona Mirror that I think you all have seen. But that is 
clearly the case. So let us make no bones about that. That is 
exactly what is happening. That is what is causing the rush to 
judgment; that is what is causing the cart before the horse 
that the Congressman has noted already.
    There was some discussion about farm inspections in 
Pennsylvania specifically. It is in my backyard so I am 
interested in that. And heavy-handedness, well, I think the 
heavy-handedness can go together, and I will give you a little 
snippet of what I am talking about. July 19 we had a press 
release from the EPA touting one of the farm inspections, and 
they said we have done these farm inspections, particularly 
dairy farms, and we found that there was widespread 
noncompliance with state regulations and extensive nutrient 
pathogenic contaminations of drinking water sources. Well, I 
considered that inflammatory. I considered that an attack on 
Pennsylvania farmers in a broad brush, and I also considered it 
insensitive and certainly overstated--certainly a lot of 
rhetoric there. But in any event I thought it was 
inappropriate.
    Congressman Goodlatte hit the nail on the head again with 
the regulation. Not a regulation? My foot it is not a 
regulation. It sure is a regulation and it should be on that 
list of regs that are costing billions of dollars. But the 
bottom line is if the states don't dance to the tune, the 
nonscientific tune that is being set, there are backstops that 
will be imposed, penalties imposed from the Federal Government. 
So again the Congressman was exactly correct about that.
    I have talked about this in my written testimony and I was 
at the all-secretaries meeting; I was at the summit, whatever 
you want to call it, about the modeling; and until very 
recently, the October 5 letter in particular, we were not being 
responded to in any meaningful sense. We were given some--I 
would say lip service--about the model but we were not being 
paid attention to and what I would call a bunker mentality was 
adopted by the EPA on this. The Virginia Pilot reported that 
where one of the highest EPA officials basically said get over 
it. Get on with it. Well, that was when we kept bringing these 
issues to the attention of the EPA, the scientific model issues 
which these are not political issues by the way. These span 
different Administrations. I inherited these technical 
questions and disputes with the EPA. So this is not a political 
issue in any way, shape, or form. It is a down and simple 
scientific issue.
    So I was encouraged by the October 5 letter for sure, but 
like I said in my testimony, we are going to have to wait and 
see. In my written testimony, we are going to have to wait and 
see whether that is additional placating or whether that is 
really serious effort at EPA to start paying attention. We are 
just going to have to see.
    At the end of the day, Congressmen, you all hit it on the 
head as well about the cost. I said in my written testimony we 
have to make sure that this is worth the price. We all want to 
clean up the Bay and we want to get it better. There is no 
question about that. My farmers, Virginia's farmers, New 
York's, everybody is committed to doing that, but we need to 
make sure that the bang we are getting for the buck is worth it 
and that we are not paying too much buck for too little bang as 
I say in the testimony.
    So with that, I am going to close and allow either 
questions or I don't know what the agenda is to move on to the 
other witnesses first, whatever it is.
    [The prepared statement of Mr. Krancer follows:]

Prepared Statement of Hon. Michael L. Krancer, Secretary, Pennsylvania 
         Department of Environmental Protection, Harrisburg, PA

Introduction
    Chairpersons Thompson and Holden and Members of the Subcommittee, 
thank you for the opportunity to appear before you to discuss 
Pennsylvania's efforts to comply with the U.S. Environmental Protection 
Agency's (EPA's) expectations for the Chesapeake Bay Total Maximum 
Daily Load (TMDL), the Pennsylvania Phase II Chesapeake Watershed 
Implementation Plan (WIP) and their impacts on rural communities.
    Pennsylvania is committed to protecting and enhancing our streams 
and watersheds. The efforts here at home will in turn help in further 
restoring the Chesapeake Bay by 2025. Over the years significant 
progress has been made to reduce nitrogen and phosphorous pollution of 
local waters in Pennsylvania's watersheds. According to EPA's current 
watershed model, when compared to 1985, Pennsylvania has achieved 27% 
of the nitrogen reductions, 31% of the phosphorous reductions, and 50% 
of the sediment reductions needed to reach the 2025 restoration 
targets. This is real progress but more needs to be done. When compared 
to current 2010 progress reported by the watershed model, Pennsylvania 
needs to achieve an additional 33.23 million pound reduction in 
nitrogen, 1.26 million pound reduction in phosphorous, and 524.4 
million pound reduction in sediment by 2025. It should be noted that 
EPA's watershed model can be a useful tool to help guide management 
actions and project their results. It is not, however, sufficiently 
precise to measure actual progress or lack thereof. It should not be 
used in a regulatory context to determine whether an enforcement action 
or other penalty is appropriate.

Basic Statutory Background
    The Federal Clean Water Act requires states to assess their 
waterbodies to identify those not meeting water quality standards. If a 
waterbody is not meeting standards, it is listed as impaired and 
reported to the EPA. Chesapeake Bay tidal waters in Virginia, Maryland 
and the District of Columbia were listed as impaired by the states and 
EPA in 1998. The Act then requires development of a Total Maximum Daily 
Load (TMDL) for the pollutants that caused the water quality 
violations. A TMDL calculates the maximum amount of a specific 
pollutant that a waterbody can receive and still meet water quality 
standards. It also establishes a pollutant budget or ``diet,'' which 
allocates portions of the overall pollution load to the pollutant's 
various sources. The Chesapeake Bay TMDL published by EPA on December 
29, 2010 establishes load allocations for nitrogen, phosphorus and 
total suspended solids based in part on Pennsylvania's Chesapeake WIP. 
In the TMDL, EPA also established a TMDL accountability system, 
including the development of a Phase II Chesapeake WIP and 2 year 
milestones. Pennsylvania completed its Phase I WIP in December 2010 at 
the major river basin scale (e.g., Susquehanna). The draft Phase II WIP 
is due to EPA on December 15, 2011, and the final is due March 1, 2011.
Pennsylvania Success Stories
    Pennsylvania has a long history of success since it became active 
in Chesapeake Bay restoration activities in 1983. Much of this success 
is due to the support of Pennsylvania's General Assembly and 
partnerships with the agricultural sector. This leadership derives from 
the Commonwealth's set of agricultural stewardship firsts, including:

   The first Bay state to require mandatory farm nutrient 
        management plans;

   The first Bay state to regulate nitrogen and phosphorus in 
        its nutrient management program;

   The first EPA-approved regulatory program for concentrated 
        animal feeding operations;

   The first Bay state to permanently preserve 20 percent (more 
        than 3 million acres) of land in the watershed.

   The first Bay state to meet its goal to plant 3,736 miles of 
        forest buffers by the year 2010. The state has planted a total 
        of 3,894 miles of forest buffers along waterways since 2002; 
        and

   Pennsylvania is home to the largest Conservation Resource 
        Enhancement Program (CREP) in the entire nation. The CREP 
        program delivers more than $50 million in state and Federal 
        assistance and targets key edge-of-stream BMPs to maximize 
        water quality.

Recent History With Respect To the Phase II Water Implementation Plan 
        Process
    You are probably most interested in the most recent events 
regarding the Phase II WIP process as that is what has been the topic 
of most of the discussion and some very recent media attention in both 
Pennsylvania and Virginia. So, let me address that first.
    In EPA's original March 2011 Phase II WIP guide, EPA expected each 
state to sub-divide its load allocations to a more local level in Phase 
II (e.g., county). As Pennsylvania and the Chesapeake watershed 
jurisdictions began to review Chesapeake Bay watershed model outputs at 
county levels, they determined that the model had serious technical 
deficiencies that do not provide full nutrient reduction credit for 
several nonpoint source Best Management Practices (BMPs). Moreover, EPA 
was intent on using the model in the Phase II WIP process as a metric 
to drive huge expenditures and determine compliance where the only 
proper role of any model would be as a prediction tool.
    Pennsylvania aired these technical concerns early on. We directed a 
letter dated May 26, 2011 to Administrator Jackson on this topic. (A 
copy of that letter is attached hereto as Exhibit A). EPA was 
dismissive of the technical concerns outlined. Pennsylvania and other 
states continued to air these technical concerns to EPA at a September 
16, 2011 meeting of State Secretaries and Deputy Secretaries with the 
EPA Region III Regional Administrator. Again, EPA was dismissive saying 
basically to us ``get over it'' or ``get beyond it''. EPA's public 
statements were similar. Indeed the Senior EPA Policy Advisor on the 
Chesapeake Bay dismissed without dealing with the technical points the 
states had been making by quipping in a Virginia newspaper article, 
``let's get on with it.'' (A copy of that article is attached hereto as 
Exhibit B). The issue proved hard for EPA to escape as public media 
attention rose as is evidenced by the Virginia newspaper article just 
mentioned and a front page article of the October 2, 2011 Altoona 
Mirror under the headline: ``Krancer: EPA Is Rushing Bay Cleanup 
Regulations; Pennsylvania Experts Disagree With Agency's''. (A copy of 
the Altoona Mirror Article is attached as Exhibit C).
    I can report, though, that perhaps the persistence and the public 
media attention may have proven worthwhile. Right after the Altoona 
Mirror story ran, we received a letter from the Regional Administrator 
in which EPA, for the first time, recognizes that there are limitations 
to the application of the watershed model at a finer scale, and 
clarified its Phase II WIP guide to allow jurisdictions to submit 
watershed model input decks at the major basin (e.g., Susquehanna) 
scale. The letter also says that the model is one of several points by 
which EPA will measure the state's performance. Also, EPA has modified 
to some degree the nature of what has to be in the Phase II WIP--EPA 
says that the Phase II WIPs don't have to be so specific--we can 
identify ``local area targets'' or actions that local areas can take to 
fulfill their contributions toward meeting Chesapeake goals. Further, 
EPA also said that ``common sense'' will be used to assess progress by 
jurisdictions in developing their Phase II WIPs and achieving milestone 
commitments, and consider other tools and data besides the model.
    Time will tell whether EPA is serious or just placating, especially 
regarding the comment about using ``common sense''. We certainly still 
have disagreement with EPA on the nature of the model and what it 
should or can be used for. However, it does appear that, at least for 
the Phase II WIP process, we may now be able to proceed with that in an 
``agree to disagree'' mode
    Ultimately, the jurisdictions and EPA have the same goal--to remove 
the Chesapeake Bay from the CWA list of impaired waters and to improve 
local water quality. As long as EPA uses a common sense approach, 
Pennsylvania will be continue to be a strong partner at the table.
    Having gotten you up to date, let me now go back a bit in history 
and explain how we got to where we are now which will give an 
opportunity for me to provide more details about the actual process.

Phase I WIP Background
    In Pennsylvania, our Chesapeake watershed stakeholders were 
actively involved in the development of our Phase I WIP and were a 
major reason that we were able to draft the plan successfully. The 
Department of Environmental Protection (DEP) convened a Chesapeake WIP 
Management Team to guide the development of the WIP. Over 125 
individuals participated in the Management Team and its three 
workgroups focusing on agriculture, development and wastewater issues. 
Pennsylvania submitted its draft Phase I WIP to EPA on schedule--
September 1, 2010. DEP continued to work with EPA to refine the WIP 
through the end of December. While EPA praised Pennsylvania in a 
December 29, 2010 letter, ultimately, when EPA issued the Chesapeake 
Bay TMDL, they imposed enhanced oversight and potential actions for 
agriculture and wastewater, and a regulatory ``backstop'' for urban/
suburban stormwater.
    Pennsylvania's Phase I WIP included both nonpoint source and point 
source reduction strategies. The nonpoint source strategy included a 
long list of Best Management Practices (BMPs) submitted to EPA's 
Chesapeake Bay watershed model. The point source component included the 
Point Source Compliance Strategy for wastewater treatment plants 
previously adopted in 2006. Because the point source strategy did not 
change, our Phase I WIP focus was to identify and develop the programs 
that support the implementation of non-point source BMPs to meet 
Pennsylvania's TMDL allocation.
    Pennsylvania's WIP is based on three themes. The first is Milestone 
Implementation & Tracking. EPA uses the Chesapeake Bay watershed model 
to measure state progress--but the watershed model only knows what is 
reported to it. We determined that there are many BMPs being installed 
voluntarily with no government funding that do not get reported to the 
model. DEP supported several pilot projects to get a handle on the 
unreported BMPs. For example, in Bradford County, it was determined 
that 85% of the no-till activities are not cost-shared or reported to 
the watershed model. The WIP includes several new initiatives to 
improve BMP reporting.
    Another key initiative is to promote the ``Million Pound'' project. 
The goal is to achieve a million pounds of nutrient reductions annually 
through grants and other funding sources. Pennsylvania Infrastructure 
Investment Authority (PENNVEST) funds are newly targeted to green 
initiatives and non-point source projects. Pennsylvania's Growing 
Greener grants give special consideration for Chesapeake Bay nutrient 
reductions.
    The second theme of Pennsylvania's WIP is Advanced Technology and 
Nutrient Trading. Pennsylvania has learned that harnessing market 
forces can be an effective way to achieve environmental regulatory 
goals at less expense than traditional command and control regulations. 
For example, in 2008, Fairview Township decided to use credits to meet 
its nutrient reduction obligation with a cost savings of approximately 
75%. The Commonwealth has been leading the way nationally in developing 
its nutrient trading program. The program is one of the first programs 
in the country to have both nonpoint sources and point sources 
participating in a nutrient credit trading program. Pennsylvania's 
program is also designed to be protective of the Chesapeake Bay by 
capping the amount of credits that can be annually traded.
    Pennsylvania has completed over ten nonpoint source to point source 
trades--where farmers go above and beyond their compliance requirements 
to sell credits to wastewater treatment plants. DEP has certified 97 
projects for credit generation. And PENNVEST now has a track record of 
successful auctions to buy and sell credits. PENNVEST completed two 
auctions in 2010 and has two auctions planned for 2011. Auctions will 
continue next year and the years beyond. In addition to the day to day 
operation of the nutrient trading program, DEP is working with EPA 
Region 3 as they complete programmatic reviews of offset and credit 
trading programs across the Chesapeake Bay watershed. DEP worked 
closely with EPA when developing Pennsylvania's nutrient trading 
program, which EPA supported at the time. DEP can understand EPA's 
desire to examine the Bay jurisdictions' programs from a regional 
perspective. But Pennsylvania feels strongly that the Federal agency 
should respect the Bay jurisdictions' programs that are working 
successfully toward the restoration and maintenance of the water 
quality of the Chesapeake Bay.
    Pennsylvania has promoted advanced technology projects by providing 
financing loans from PENNVEST. DEP has been working with the Department 
of Agriculture and a number of companies looking to install various 
technologies such as co-generation on dairy, poultry and hog 
operations. Many of these technologies can produce electricity and 
marketable soil amendments; reduce methane emissions; and generate 
renewable energy, nutrient reduction and carbon credits which can then 
be sold. Projects of this nature can support three priorities in the 
Chesapeake Bay region: maintaining a vibrant farming economy; restoring 
and protecting the water quality of Pennsylvania streams and the 
Chesapeake Bay; and providing crucial economic development benefits to 
rural businesses and communities. Manure-to-energy projects are just 
the first of many promising technologies the Commonwealth supports that 
advance broad based environmental benefits.
    The third theme of Pennsylvania's WIP is enhancing compliance 
efforts for wastewater treatment plants, agriculture and stormwater. 
Pennsylvania's Point Source Strategy developed in December 2006 remains 
in place--and the Nutrient Trading Program provides an option for 
compliance. New funding from EPA will support compliance and inspection 
activities for our CAFO, stormwater and agriculture regulatory 
programs. For agriculture, for instance, each Pennsylvania conservation 
district will be required to undertake 100 farm visits in the first 
year. Over 4,000 farm operations will be notified of Pennsylvania's 
existing environmental requirements.

Phase II WIP
    On August 1, 2011, EPA issued revised TMDL planning targets for the 
Phase II WIPs based on a revised Chesapeake Bay watershed model. While 
the numbers look different from Pennsylvania's 2010 TMDL allocations, 
they require the same level of effort as for the 2010 TMDL allocations. 
To facilitate local implementation of necessary reduction actions to 
meet the allocations, EPA directed the Chesapeake watershed states to 
sub-divide the reductions by local areas in the Phase II WIP. 
Pennsylvania chose to sub-divide loads at the county-level, as the EPA 
Chesapeake Bay watershed model is based in part on county level data. 
As discussed earlier in this testimony, that guide has since been 
clarified to allow jurisdictions to submit watershed model input decks 
at the major basin (e.g., Susquehanna) scale instead of more local 
areas.
    For the Phase II WIP, we need to build on local partnerships--those 
efforts going on in county conservation districts and municipalities 
that work to improve local stream water quality. Lancaster County's 
Clean Water Consortium, Lycoming County's Nutrient Trading Program, 
York County's Integrated Water Resources Plan, and the Conewago Creek 
Watershed Initiative are examples of local people taking local action 
to restore local streams.
    On August 3, DEP convened a Phase II Chesapeake WIP Summit, our 
first major outreach to communicate to local stakeholders on what EPA 
expects for the Phase II WIP. On August 10, EPA held a Chesapeake Bay 
Model Workshop at the Rachel Carson State Office Building, to inform 
stakeholders on the models that are used to build our WIPs and measure 
our progress.
    DEP worked with its WIP Management Team and workgroups to develop 
draft goals at the county level throughout the Chesapeake watershed. We 
took the Draft WIP County Planning Target sheets to eight Regional 
County Workshops, starting October 13 through November 2, to ground 
truth them and receive feedback. Invitees to the workshops included 
county conservation district managers, county planning commission 
directors, and municipalities representing the PA League of Cities and 
Municipalities, PA State Association of Township Commissioners, PA 
State Association of Boroughs, and the PA State Association of Township 
Supervisors. However, anyone was welcome to attend and listen to the 
discussions.
    The county planning targets addressed only those loads that can be 
reduced by Best Management Practices (BMPs). This included both 
regulatory and non-regulatory loads for agriculture, stormwater and 
forest. Wastewater treatment plant point source reductions were not 
included because they were previously addressed by the 2006 Chesapeake 
Bay Compliance Strategy. The county planning targets were for planning 
purposes only, and do not become regulatory allocations at the county 
level. The identified Pollution Reduction Actions represented one 
scenario from the Chesapeake Bay watershed model that meets the 
reduction targets. There are other equally valid combinations of 
actions that could also meet the reduction target. With input from 
counties and municipalities, DEP will then prepare its Draft Phase II 
WIP watershed model input deck at the major basin scale for submission 
to EPA by December 15.
    Similar to the Phase I WIP, EPA will evaluate each state's Phase II 
WIP. Should we meet EPA's expectations, there is opportunity to have 
EPA remove the TMDL ``backstop'' imposed on the urban stormwater 
sector. That backstop provided notice that EPA would consider expanding 
the Municipal Separate Storm Sewer Systems (MS4s) coverage in 
Pennsylvania's Chesapeake watershed should we not make sufficient 
progress in reducing urban stormwater loads. If we do not meet EPA's 
expectations, they could impose additional consequences. We are looking 
for EPA to bring its new ``common sense'' approach to evaluating the 
Phase II WIPs.

Conclusion
    In your letter of invitation, you also asked for information on how 
Pennsylvania's Chesapeake WIP will impact its rural communities. 
Attached to this testimony is a detailed summary of Pennsylvania's 
progress to implement agricultural activities identified in the Phase I 
WIP. These activities include funding for County Conservation District 
technical staff and BMP implementation from several of sources: 
Pennsylvania General Fund, PENNVEST, EPA's Chesapeake Bay Program, and 
USDA Natural Resources and Conservation Service. In addition, the WIP 
also includes a basin-wide component to achieve agricultural regulatory 
compliance. The Federal EPA has certainly focused on the Chesapeake Bay 
as a priority item for attention. In some cases this has resulted in 
unfunded mandates to the states.
    We all share the core desire to keep up the progress on making the 
Bay even cleaner than it is now. While doing so, we do need to be 
mindful of how we are going to pay for this progress and what it is we 
are paying for. We need to be mindful of using available funds in an 
efficient and cost-effective manner so that we get the most ``bang for 
the buck'' that we can and avoid spending a lot of ``bucks'' for very 
little ``bang''. We also believe that it is important that the Federal 
Government ``put its money where its mouth is'' and if it is going to 
prioritize the Chesapeake Bay program, to appropriately also prioritize 
it among the competing voices for the pool of Federal funding that is 
available to bring to the effort.

                               Attachment

PA Chesapeake Bay Watershed Implementation Plan
Agricultural Section_Strategy to Fill Gaps
Update September 2011
Non-Regulatory Efforts
    Chesapeake Bay Implementation Grant Special Projects Funding:

   DEP targeted priority practices (stream bank restoration/
        riparian buffers, fencing, manure storages/barnyard practices, 
        cover crops/no-till, nutrient management/E&S plans) and 
        priority watersheds. DEP awarded 46 projects to conservation 
        districts for a total of $800,492.95. Of the 46 projects, 41 
        were awarded for priority activities including 17 projects for 
        nutrient management/conservation plans, six for fencing and 
        four for cover crops/no-till planting. Of the other five--less 
        than 10% of the funds were awarded--two supported on-going 
        staffing commitments and three were for additional outreach 
        activities. In addition, all but two of these 46 projects were 
        in the targeted watersheds. These two supported (1) a county-
        wide outreach effort in Bradford and (2) on-going staffing 
        commitment in Susquehanna County

    Chesapeake Bay Implementation Grant Technician/Engineer Funding:

   DEP revised the technician contracts for 2011-2012 to 
        include specific tasks to expand the compliance assistance 
        outreach for agriculture. The scope of work in these technician 
        contracts required staff to spend a portion of their time 
        contacting farms in their county to ensure all farm operators 
        are aware of their responsibilities under PA erosion and 
        sedimentation control regulations and the Manure Management 
        Manual.

    Agricultural Conservation Technician Funding:

   PA Department of Agriculture, through the State Conservation 
        Commission, provided ongoing cost-share funding $527,000 in FY 
        2011-12 for Agricultural Conservation Technicians (ACT) in the 
        CB watershed to provide technical assistance to farmers.

    REAP Conservation Tax Credits:

   The State Conservation Commission in FY 2011-12 allocated 
        more than $6 million (out of $10 million available) in REAP 
        state tax credits to farmers for conservation BMPs, no-till 
        planters, no-till drills and low disturbance manure 
        incorporation equipment.

    PENNVEST Non-Point Source Funding:

   On July 20, 2011, PENNVEST approved over $1.9 million for 
        six projects to address agricultural non-point source 
        pollution. All six are in Lancaster County and will reduce 
        nutrient runoff into local streams and the Chesapeake Bay 
        watershed. The specific projects were:

     A $163,213 grant to construct a manure storage 
            facility at a poultry operation in Paradise Township.

     A $573,188 grant to construct a manure storage 
            facility at a farm in Ephrata Township.

     A $176,210 grant to construct a manure storage 
            facility at a farm in Mount Joy Township.

     A $157,534 grant to construct manure litter storage 
            shed at a poultry operation in Strasburg Township.

     A $657,050 grant to construct manure composting 
            facility as well as an infiltration basin at a farm in 
            Drumore Township.

     A $212,056 grant to construct a manure storage 
            facility and make other improvements at a second farm in 
            Strasburg Township.

   On April 20, 2011, PENNVEST approved five projects to 
        address agricultural non-point source pollution. Three of the 
        projects ($1.069 million) were in the Chesapeake Bay watershed 
        in Lancaster and Montour Counties. The specific projects were:

     $425,397 grant to construct various manure-control 
            facilities at a dairy and poultry operation in West 
            Lampeter Township that will reduce nutrient runoff into 
            Pequea Creek in Lancaster County.

     $148,802 grant to construct manure-control facilities 
            at a poultry farm in Strasburg Township, where nutrient 
            runoff during wet weather is contaminating Big Beaver Creek 
            in Lancaster County.

     Montour County Conservation District received a 
            $495,000 grant to install manure and animal control 
            facilities at two livestock farms where there is 
            significant nutrient runoff into Mahoning Creek, Beaver Run 
            and ultimately the Chesapeake Bay.

   On April 1, the PA Association of Conservation Districts 
        hired Paul Herzer as the Non-Point Source Application Developer 
        (AKA ``NPS Circuit Rider'') to assist county conservation 
        districts, watershed groups, environmental groups, 
        municipalities and DEP Regional Offices with the PENNVEST 
        application process. Funding for this position was awarded by 
        DEP to PACD from the EPA Section 319 grant funds.

   PENNVEST announced the second round of nutrient credit 
        trading auctions. These auctions will be held on November 2 and 
        November 9, 2011. The Pennsylvania Infrastructure Investment 
        Authority (PENNVEST), working in conjunction with the 
        Department of Environmental Protection (DEP), will be hosting 
        auctions for the sale and purchase of nutrient credits in the 
        Susquehanna and Potomac watersheds to be conducted this fall. 
        There will be two ``spot'' auctions of verified credits, 
        applicable to the 2011 compliance year (i.e., October 1, 2010-
        September 30, 2011). Both auctions will afford wastewater 
        treatment plants in these two watersheds to purchase credits as 
        a means of meeting their nitrogen and phosphorous discharge 
        limits for the compliance year.

    NRCS Financial Assistance--In Federal FY 2010, the NRCS provided 
more than $37 million in technical and financial assistance to 
Pennsylvania farmers in the CB watershed for the installation of best 
management practices through their CB Watershed Initiative (CBWI) and 
the Environmental Quality Incentive Program (EQIP).
    NRCS Training for Field Staff:

   NRCS, working with Penn State, developed the AG 101: 
        Understanding PA Farm Operations online sessions that explore 
        the many facets of farm types, operations management, 
        economics, social aspects, and environmental considerations. 
        The ``winter burst'' and ``summer burst'' of the series were 
        held in 2011 and looked at what Pennsylvania agricultural 
        producers manage as they grow food, fiber, and fuel. AG 101 was 
        developed to enhance the work of conservation practitioners who 
        are on the front lines supporting producers in choosing, 
        planning, and implementing the best management practices that 
        preserve soil, water, and air quality. AG 101 was jointly 
        developed and sponsored by Penn State Cooperative Extension, 
        SCC and the Pennsylvania Natural Resources Conservation Service 
        in collaboration with PennAg Industries and the Pennsylvania 
        Farm Bureau.

   NRCS, in cooperation with various partners, continues to 
        provide annual training (1 week, intensive classroom and field 
        experience) to approximately 50 entry level agricultural 
        conservation technicians and conservation planners that work 
        with farmers to plan and implement BMPs.

    Legacy Sediment BMP:

   DEP is cooperating with Robert Walter and Dorothy Merritts 
        of Franklin and Marshall College in the development of a new 
        BMP often referred to as Legacy Sediment. The Chesapeake Bay 
        watershed model focuses largely on modern land use, 
        particularly agriculture and construction, as the dominant 
        sources of high suspended sediment and nutrient loads. Research 
        by Walter and Merritts documents, however, that historic 
        sediment and associated nutrients eroded from the stream 
        corridor upstream of breached millponds are also an important 
        component of the total load in modern streams. Results show 
        that stream corridor and streambank erosion is a major 
        contributor to the suspended sediment and particulate--
        phosphorus loads carried by many streams, and that minor, but 
        substantial, nitrogen loads are released as well. DEP's Legacy 
        Sediment Workgroup developed the new Natural Floodplain, 
        Stream, and Riparian Wetland Restoration BMP that addresses 
        aquatic resources impaired by legacy sediment in 2008. Current 
        activity is focused on establishing nutrient and sediment 
        reduction efficiencies for the BMP so it can be included in the 
        Chesapeake Bay watershed model. A demonstration project is 
        underway in the Big Spring Run Basin in Lancaster County. The 
        project involves approximately 5 acres of natural floodplain 
        and riparian wetland restoration and 3,200 feet of natural 
        stream restoration. The BMP implementation is supported by a 
        funding partnership of DEP, Chesapeake Bay Commission, private 
        landowner owner, Suburban Lancaster Sewer Authority, Foundation 
        for Pennsylvania Watersheds, and Pennsylvania Environmental 
        Council.

Regulatory Efforts
    Continue Existing Regulatory Programs:

   DEP, in cooperation with a number of agricultural agencies 
        and organizations expanded outreach to ag community to increase 
        compliance with Chapter 102 and manure management requirements. 
        Chapter 102 regulations which in part regulate all agricultural 
        operations that plow and till, were updated late in 2010. A 
        revised PA Manure Management Manual was updated and recently 
        released for use.

   Prepared ``Am I in Compliance'' brochure with distribution 
        of 20,000 copies since January 2011. Prepared ``Ag E&S Barn 
        sheet'' for use in conservation district 100 site visits.

   Three training sessions held in conjunction with NRCS, State 
        Conservation Commission (SCC) and PACD on February 24, March 2 
        and March 10 for about 200 people. The training was aimed at 
        staff from USDA Natural Resources Conservation Service (NRCS), 
        PA Department of Environmental Protection (DEP), and 
        Conservation Districts who are involved in agricultural erosion 
        and sediment control plans and conservation planning. Speakers 
        from NRCS, SCC and DEP answered the question: what is an 
        Agricultural Erosion & Sedimentation Plan? A detailed review of 
        the Chapter 102.4(a) requirements will be explained. Examples 
        of the requirements for Ag E&S plans are: maps, treatment of 
        animal heavy use areas, near stream cover requirements, and 
        tolerable soil loss conditions for crop fields.

     PA SCC continued its oversight of the PA NM Program 
            (Act 38) that requires that CAFOs and CAOs to development 
            and implement an approved PA NM Plan for their operations. 
            The SCC provided approximately $1.7 million to fund NM 
            technicians in county conservation districts within the CB 
            watershed in FY 2011-12.

     PA Department of Agriculture, in cooperation with the 
            SCC, continued certification programs for Certified NM 
            Specialist (approximately 350 persons), Certified Manure 
            Haulers and Brokers (approximately 925 persons) and 
            Certified Odor Management Specialists (approximately 23 
            persons), providing more than 200 days of classroom and 
            field based training annually to certified specialist in 
            Pennsylvania.

    Evaluate and Modify Regulatory Tools--Chapter 102 Regulations:

   In July 2011, NRCS developed the ``Conservation Planning and 
        Regulatory Compliance Handbook'' for NRCS staff. This guidance 
        referenced Pennsylvania's Chapter 102 regulations and provided 
        tools and guidance for NRCS staff involved in conservation 
        planning that addresses the requirements for Ag E&S. Guidance 
        does not implement Pennsylvania's regulatory program, but 
        provides guidance as to what requirements are found in 
        Pennsylvania and how this interfaces with NRCS conservation 
        planning activities.

    Evaluate and Modify Regulatory Tools--Manure Management Manual:

   In 2011, DEP, in cooperation with SCC, PDA, NRCS and Penn 
        State Cooperative Extension developed revisions to the Manure 
        Management Manual. Final revisions were presented to DEP's 
        Agricultural Advisory Board in June. Manual was released for 
        use in late October as a PA DEP Technical Guidance Document.

    Basin-wide Component to Achieve Agricultural Regulatory Compliance:

   In 2011, DEP continued revise delegation agreements with 
        county conservation districts.

   In 2011, DEP continued development of ``Model Agricultural 
        Compliance Policy.'' A preliminary draft has been developed and 
        given a cursory review by DEP's Bay Ag Water Quality Initiative 
        Workgroup. Revisions are on-going with additional review by 
        county conservation districts and others, in anticipation of 
        presentation at ``All Bay Meeting'' in January 2012. On-target 
        to meet roll-out in July 2012.

   In 2011, DEP revised the conservation district Bay 
        technician contracts for 2011-2012 to include specific tasks to 
        expand outreach for agriculture. The scope of work in these 
        technician contracts required these 42 staff to undertake 100 
        site visits per staff person--or equivalent staff person--and 
        DEP expects over 4,000 site visits by June 2012. Over 200 were 
        conducted by September 2011. In addition, each Bay conservation 
        district was requested to submit a plan that identifies how 
        each district will engage all farms in this regulatory 
        outreach. These plans are required to be submitted in October 
        2011. Significant training of staff via webinar and supplies of 
        outreach material were provided. DEP press release was made and 
        significant positive press coverage was received.

   In 2011, DEP received $2.466 million from EPA via the 
        Chesapeake Bay Regulatory and Accountability Program (CBRAP) 
        grant. DEP used these funds to, among other things, support 
        five new DEP staff positions. In March 2011, four of these 
        staff were hired. (The 5th position is not yet hired, due to 
        DEP difficulty in hiring this one staff position.) One staff 
        position was in Harrisburg and has been engaged in development 
        of the Manure Management Manual and the CAFO General Permit. 
        Two staff positions were hired for the Southcentral Regional 
        Office and have been engaged in compliance inspections. One 
        position was hired in the Northcentral Regional Office and has 
        been engaged in compliance inspections and regulatory outreach 
        activities.

   WIP indicates ``Conservation District Chesapeake Bay staff 
        can address 18,000 farm operations--about half of the farms in 
        the watershed--and inform them about compliance with their 
        regulatory requirements.'' In 2011, DEP expects over 4,000 site 
        visits will be made by these staff. Outreach plans for these 
        conservation districts are expected to be available by December 
        2011 indicating how all 40,000 farm operations will be 
        addressed by 2015.

                               Exhibit A

May 26, 2011

Hon. Lisa Jackson,
Administrator,
U.S. Environmental Protection Agency
Washington, D.C.

    Dear Lisa Jackson:

    Thank you for your letter to Governor Corbett of April 7, 2011, 
stating recognition and support for Pennsylvania's Chesapeake Bay Total 
Maximum Daily Load (TMDL) Watershed Implementation Plan. Pennsylvania 
shares the goal of restoring and protecting the Chesapeake Bay and has 
long recognized our role in the restoration and protection of this 
national asset. The Pennsylvania Department of Environmental Protection 
(PADEP) and I appreciate the acknowledgment from EPA.
    I would like to take this opportunity to reach out to you directly 
to request your assistance in needed additional work between our 
agencies related to urban stormwater management. While we share the 
same Chesapeake Bay clean up goals, Pennsylvania is concerned with 
aspects of the TMDL issued by EPA in December 2010, and the application 
of the Chesapeake Bay Watershed TMDL model to the municipal stormwater 
sector in particular. We do not think EPA's approach to this sector 
will achieve the goals even if the municipalities could implement and 
afford it, which they cannot. The urban stormwater sector is identified 
as contributing only approximately 6% of the problematic load. EPA 
contractors have estimated that it will cost municipalities $5.3 
billion to address the problem. This extraordinary cost is simply not 
reasonable, not cost effective and not likely to result in significant 
needed environmental gains and comes at a time when local governments 
are in significant economic distress.
    You should be aware that Pennsylvania has serious concerns 
regarding the Chesapeake Bay Watershed TMDL model EPA is using. Put 
simply, we do not think the application of the model to Pennsylvania 
MS4 permits is scientifically or technically appropriate. The model 
projects loads based upon very gross inputs. The model does not reflect 
conditions at the local level for purposes of predicting specific local 
load reductions to be included in individual permits, and was not 
developed for such a use. Additionally, there are specific problems 
related to the urban stormwater sector based upon what we know to be 
inaccurate inputs and information related to stormwater management in 
Pennsylvania. For example, mining impacts are currently included in the 
urban stormwater sector of the model. Likewise, according to the U.S. 
Geological Survey (USGS), there can be up to 15% error in the accuracy 
of the monitoring data used to calibrate the model itself. This 
variability at the gross level is magnified as you try to apply it at 
finer and finer levels.
    Pennsylvania has articulated these reservations to EPA for quite 
some time, and has been frustrated with the lack of collaborative 
dialogue on these issues. Our professional staff are the experts on 
Pennsylvania waters, Pennsylvania land uses and regulatory programs. 
PADEP is in the process of collecting the information we believe to be 
critical to making the model results more reflective of on-the-ground 
construction, post construction and MS4 BMP implementation in 
Pennsylvania, and is also working with the National Association of 
Conservation Districts, other states and NRCS to determine how to 
better capture the full spectrum of agriculture BMPs for credit in the 
model. PADEP would welcome the opportunity to work more closely with 
EPA as a partner and resource in improving the accuracy of the model 
results for these sectors.
    Pennsylvania has also been very concerned about EPA Region III's 
request to include specific numeric reductions extrapolated from the 
boundary TMDL in the 218 Pennsylvania Chesapeake Bay MS4 permits. This 
is technically unsupportable and unsustainable. Apart from the concerns 
about the reliability of the model, inclusion of percent reductions 
extrapolated from the boundary TMDL is scientifically problematic 
because the scale of the Chesapeake Bay Watershed TMDL model is basin-
based at a county and larger level and is not readily transferable or 
defensible as applied at the smaller scale, such as townships or 
boroughs which are the vast majority of Pennsylvania small regulated 
MS4s.
    Further, while Pennsylvania appreciates the flexibility and 
collaboration you reference in your April 7, 2011, letter with regard 
to the approach to agriculture, PADEP and our municipality stakeholders 
have been frustrated with EPA's continued failure to acknowledge the 
challenge of Pennsylvania's unique municipal structure--which results 
in Pennsylvania having more regulated Municipal Separate Storm Sewer 
Systems (MS4s) than any other state and \1/6\ of the nation's total 
with nearly 1,000 as of the 2000 Census. PADEP has also been further 
disheartened and frustrated by the lack of support and acknowledgement 
by EPA of Pennsylvania's strong stormwater management program.
    Unfortunately, with regard to the urban stormwater sector, 
Pennsylvania does not agree the TMDL development effort has been 
collaborative. But we do remain hopeful that such collaboration is 
possible. An important consideration we believe EPA needs to recognize 
is Pennsylvania's recently finalized stormwater regulations which 
require post construction stormwater best management practices be 
implemented and maintained when a land development project disturbs one 
or more acres of land--regardless of whether the project is located in 
a regulated MS4 area. Implementation of these regulations on average 
results in significantly less pollutants being discharged to 
Pennsylvania waters and ultimately the Bay than is contemplated in the 
Chesapeake Bay model. We are confident that significant pollutant 
reductions to the Bay will continue to be realized through the ongoing 
implementation of our stormwater management programs.
    Toward that end PADEP would like to engage EPA in a fundamental way 
regarding the Federal MS4 program, as well as the implementation of the 
Chesapeake Bay TMDL in the urban stormwater sector in Pennsylvania.
    Pennsylvania's program is effective in part because it is not 
constrained to the artificial--and unworkable--``point source'' 
regulatory framework. The legal authority for Pennsylvania's strong 
stormwater program is based upon our state anti-degradation program and 
state stormwater management laws and regulations. Pennsylvania's 
program works because it recognizes changes from land development, to 
the volume, rate and quality of overland stormwater flow, are by 
definition different from traditional continuous flow end of pipe point 
source discharges. The variable nature of wet weather driven stormwater 
discharges and the regulation of change in those stormwater flows 
requires a distinct regulatory program that is based upon and supports 
a best management practice approach. The limitations of the traditional 
``point source'' framework that is well suited to end-of-pipe controls 
does not translate effectively to the regulation of pollution 
associated with changes in stormwater associated with land development 
activities.
    We will continue to lead, as we have, not only to restore and 
reclaim the Chesapeake Bay, but to protect and maintain Pennsylvania's 
water resources which are among the most significant assets of the 
Commonwealth.
    I appreciate your letter and would like the opportunity to have 
PADEP staff sit down with Mr. Corbin and provide our perspective on 
what works in Pennsylvania, and how Pennsylvania's program can serve as 
a model for improvements to the national program.
    If you have any questions, please contact Margaret Murphy, 
Assistant Counsel, by e-mail at [Redacted] or by telephone at 
[Redacted].
            Sincerely,

            
            
Hon. Michael L. Krancer,
Secretary.

CC:

U.S. Senator Robert P. Casey, Jr.;
U.S. Senator Patrick J. Toomey, Sr.;
U.S. Representative Robert A. Brady;
U.S. Representative Chaka Fattah;
U.S. Representative George Joseph Kelly, Jr.;
U.S. Representative Jason Altmire;
U.S. Representative Glenn Thompson;
U.S. Representative James Gerlach;
U.S. Representative Patrick Leo Meehan;
U.S. Representative Michael G. Fitzpatrick;
U.S. Representative William Shuster;
U.S. Representative Thomas Anthony Marino;
U.S. Representative Louis J. Barletta;
U.S. Representative Mark S. Critz;
U.S. Representative Allyson Young Schwartz;
U.S. Representative Michael F. Doyle;
U.S. Representative Charles Dent;
U.S. Representative Joseph R. Pitts;
U.S. Representative Thomas Timothy Holden;
U.S. Representative Timothy F. Murphy;
U.S. Representative Todd Russell Platts.

                               Exhibit B

Published on HamptonRoads.com    PilotOnline.com (http://
hamptonroads.com)
Scott Harper, (757) 446-2340, [email protected]
New model for Bay cleanup muddies goals, cities say
    For 2 decades now, the Chesapeake Bay cleanup has been guided 
largely by a computer model. Housed in Maryland, it spits out targets 
and forecasts and helps officials set goals for what should be done to 
restore North America's largest estuary.
    The states involved in the celebrated cleanup, including Virginia, 
have a say in how the model works and help set its guidelines, but its 
operation falls mainly to the U.S. Environmental Protection Agency.
    How the modeling is done, and what data are fed into the computer, 
have been bones of contention for years. Today, they are central to 
pending lawsuits from farmers and developers who argue that an 
aggressive push from the Obama Administration is based partially on 
flawed, incomplete science and should be stopped.
    Now another wrinkle has surfaced.
    Virginia and several other states--including Maryland, Pennsylvania 
and Delaware--are complaining that a newly tweaked version of the 
model, known as 5.3.2, is leading to some weird and incomprehensible 
results for what local governments are expected to accomplish in the 
coming years to dramatically improve water quality by 2025.
    In James City County, for example, data stemming from the previous 
model urged the county near Williamsburg to reduce nitrogen from farms, 
streets, storm drains and development sites by 8 percent, phosphorus by 
11 percent and sediment by 20 percent. The guidance worried local 
officials, unsure how they would pay for environmental improvements and 
controls to hit those targets.
    However, computer runs performed by the state using the new model 
prescribe something completely different: no reductions needed for 
nitrogen, and a 20 percent surplus of phosphorus and a 350 percent 
cushion for sediment.
    In short, on paper the county went from a polluter to one that 
doesn't have to do anything.
    While the James City County discrepancies are extreme--new data 
show that most Virginia localities have to do more, not less, to help 
save the Bay--state and local officials face a quandary: How exactly to 
proceed in the face of changing targets?
    ``What do we say to our localities? `Well, we think that these 
practices we are asking you to implement might help you reach your 
goal, but we really don't know what that goal is and we aren't sure the 
money you spend to implement these practices will make any difference?' 
'' said Doug Domenech, Virginia's secretary of natural resources, Gov. 
Bob McDonnell's top environmental official.
    The EPA, environmentalists and some scientists concede that the 
modeling is imperfect and will continue to be updated and improved. But 
they also say the states are not required to be so precise in their 
calculations, and that no one asked them to break down data county by 
county, pound by pound of pollutants, for what they need to do to help 
the effort.
    The model, they add, is not designed to be so specific and its main 
strength is defining what states must do river by river.
    ``They're getting down into the weeds, and we're telling them they 
don't need to go there,'' said Jeff Corbin, the EPA's senior adviser on 
the Chesapeake Bay. ``Use common sense. Let's get on with it.''
    Carl Hershner, a scientist at the Virginia Institute of Marine 
Science, said model critics are missing the point of the new push to 
get serious about restoring the Bay.
    ``None of this stuff should impede the planning for what everyone 
knows is needed to be done,'' Hershner said. ``We need to better 
control nutrients entering the Bay, and every state, county and city 
has to help do that.''
    The two main nutrients, nitrogen and phosphorus, are good for the 
Bay in proper amounts. But in excess, as today, they spark algae blooms 
that rob oxygen from water, making life difficult for aquatic life. 
Sediment that washes off the land clouds water quality, shallows creeks 
and rivers, and smothers key underwater grasses.
    In settling a lawsuit years ago, the EPA pledged to clean up the 
Bay enough to remove it from a national list of dirty waters. In 
December, the EPA and its partner states agreed to a pollution diet, or 
TMDL, short for Total Maximum Daily Load, to achieve this goal.
    The diet, which the computer model helped to define, called on Bay 
states to reduce nutrients and sediments through various means and to 
implement those improvements by 2025, with 60 percent of them complete 
by 2017. Virginia estimates its part of the deal could cost as much as 
$8 billion.
    Amid economic woes and lean budgets, officials in the McDonnell 
Administration say they have to be precise in how they spend such 
money, and that the computer model or any other tool should help guide 
where to get the biggest bang for the buck.
    If the model is not precise enough to tell localities what they 
need to do without fear of penalty from the EPA, it should be refined 
to do so before moving forward, state environmental officials say.
    ``Dealing with numbers like this is just ridiculous when you're 
trying to put together a plan that the EPA will hold you accountable 
for,'' said Anthony Moore, an assistant secretary of natural resources 
overseeing Bay issues.
    Moore and other senior officials from concerned states met with EPA 
leaders at a ``modeling summit'' last month. Chiefly, the states 
complained that many computer problems stem from calculating the impact 
of farm pollution.
    One of the primary strategies for curbing fertilizer runoff from 
agriculture is implementing nutrient management plans on farms. But in 
many cases, the new model shows that such plans increase nitrogen and 
phosphorus pollution, not reduce it, Moore said.
    In response, the EPA's regional director, Shawn Garvin, sent a 
letter to Virginia and other states that attended the summit. Garvin 
wrote that the EPA will correct its model but that the states should 
continue writing their plans reflecting how local governments will 
contribute to the effort. The plans are due Dec. 15.
    Garvin also stressed that state calculations based on the new model 
do not have to be so specific.
    ``EPA does not expect the jurisdictions to express the `local area 
targets' in
terms . . . such as pounds of pollutant reductions by county,'' he 
wrote.
    Instead, Garvin added, the next round of state plans ``could 
identify `targets' or actions that local and Federal partners would 
take to fulfill their contribution toward meeting the Chesapeake Bay 
TMDL allocations.''
    Virginia officials, while disappointed, said they will press on, 
though they worry local governments may balk at committing to pollution 
cuts amid shifting targets.
    John Carlock, an environmental specialist with the Hampton Roads 
Planning District Commission, which represents local governments across 
the region, described the changing models as ``extremely frustrating 
for everyone.''
    The commission had serious problems with the previous model and 
threatened to challenge its recommendations in court.
    ``The states and the EPA are coming to the conclusion that the 
model works pretty well at the state level, OK at the river basin 
level, but not so good at the local level,'' Carlock said. ``We 
absolutely need more consistency.''
    Source URL (retrieved on 10/28/2011--14:24): http://
hamptonroads.com/2011/10/new-model-bay-cleanup-muddies-goals-cities-
say.

                               Exhibit C

The Altoona Mirror
Krancer: EPA is rushing bay cleanup regulations
Pennsylvania experts disagree with agency's
October 2, 2011
By William Kibler ([email protected])

    State Department of Environmental Protection Secretary Michael 
Krancer is in a rush to develop Marcellus Shale gas in Pennsylvania, 
despite environmental concerns, according to local environmentalist 
Stan Kotala.
    But Krancer wants to slow what he thinks is a Federal rush to put 
regulations in place to clean up Chesapeake Bay.
    ``We do not see eye-to-eye about the scientific validity of the 
models used to drive all these costly decisions,'' Krancer said of his 
department and the Federal Environmental Protection Agency.
    The model has ``serious flaws,'' he said, and Pennsylvania's 
technical experts disagree with EPA's.
    The EPA has ``turned a deaf ear'' to those misgivings, and the 
regulatory process is ``moving quickly,'' despite the misgivings, he 
said.
    ``We want to get the Bay clean,'' he said. ``But we don't want to 
rush to judgment''--given the big investments, he said.
    He doesn't have as much of a problem with Bay regulations already 
in place, but he doesn't have much confidence in regulations that may 
be in the works.
    It would be a ``very embarrassing situation'' if the state and 
communities within it spend a collective billion dollars only to learn 
a few years later that the regulations had missed their target, he 
said.
    ``We should be driven by sound science, not litigation deadlines,'' 
he said.
    The EPA disputes Krancer's interpretation. In a statement released 
by the EPA Mid-Atlantic Region office, an official said, ``EPA's focus, 
and our role, is to hold states accountable for the commitments they 
have made. Despite the comments made by Secretary Krancer, we are sure 
they plan to live up to those commitments.''
    States, including Pennsylvania, have developed implementation plans 
with a series of individual steps that will protect the Bay.
    The EPA determines how much of various pollutants the Bay can 
handle from the rivers that drain the states in the watershed, then 
allocates total maximum daily loads for those pollutants for each 
state.
    The agency believes things will work out if the state just follows 
the program.
    Kotala said he generally thinks the EPA's plan to protect the 
Chesapeake has been appropriate.
    Pennsylvania itself also has taken ``some fantastic steps,'' he 
said.
    Most notably is state Rep. Jerry Stern's Resource Enhancement and 
Protection Program, which helps farmers implement best-management 
practices to avoid stream pollution, Kotala said.
    Unfortunately, the program has endured significant cuts, he said.

    The Chairman. All right. Thanks, Mr. Secretary.
    We will have testimony from all the witnesses and then we 
will open up for some questioning.
    Chairman Brubaker, good to see you again. Thanks for coming 
down to testify and the floor is all yours.

 STATEMENT OF HON. MICHAEL BRUBAKER, CHAIRMAN, CHESAPEAKE BAY 
                      COMMISSION; SENATOR,
          COMMONWEALTH OF PENNSYLVANIA, ANNAPOLIS, MD

    Mr. Brubaker. Well, thank you, Mr. Chairman.
    Good morning, Chairman Thompson, Ranking Member Holden, and 
Chairman Goodlatte. And I want to say it is very nice to see 
you.
    My name is Mike Brubaker. I am an agronomist--that is a 
plant and soil scientist--and I have practiced for 25 years and 
have written many nutrient management plans. But after serving 
as CEO of multiple private sector agricultural consulting firms 
that operated frankly in each of your states, I now serve as a 
Pennsylvania State Senator representing the 36th Senatorial 
Districts, which covers parts of Lancaster and Chester 
Counties. I am also honored to serve this year as Chairman of 
the Chesapeake Bay Commission, which is a tri-state legislative 
commission representing the General Assemblies of Pennsylvania, 
Maryland, and Virginia on matters of Bay-wide concerns. The 
Commission is now in its 31st year and predates the Bay 
program, of which we are a member.
    Over the years, the Commission has witnessed the evolution 
of Bay restoration efforts from the first gathering of a few 
Congressmen and state legislators to the current effort which 
is dominated by the TMDL. The TMDL, while ambitious, is 
ultimately about clean water. So if clean water is important, 
and I believe that it is, then the question is not whether we 
should move forward or not but how can we best move forward to 
support implementation in a time of challenging budgets and a 
struggling economy and how can we implement it fairly? And I 
have three responses to that statement.
    One is numeric goals, two is partnerships, and three is 
innovation. On numeric goals, we have the numbers on the TMDL 
but then our states, our municipalities, and our farmers should 
be given a certain amount of flexibility in how we reach those 
numbers. The WIP process can allow for that flexibility both in 
our initial decision-making and our ability to adapt as new 
information becomes available.
    Second, we need to strengthen our partnerships across all 
of government. In fact, I would argue it is even more important 
now to do it than ever before. Under the Phase II WIPs, the 
important role of local partners is being acknowledged and 
enhanced. After all, at the local level is where implementation 
ultimately occurs. And Congressman Goodlatte has been focusing 
on that.
    However, this should not mean that the buck merely is being 
passed down the chain. Each level and branch of government has 
an important role to play in support of the common goal. Both 
states and the Federal Governments can support local efforts 
through financial incentives and technical assistance that 
allow for flexibility. At the Federal level in particular, USDA 
conservation programs including technical assistance remain the 
single biggest source of support for implementation of nonpoint 
source best management practices. Programs offered nationwide 
such as EQIP and the Regional Chesapeake Bay Watershed 
Initiative Program have been a critical source of support for 
our farmers.
    Congressman Holden and Congressman Goodlatte and other 
Members of this House Agriculture Subcommittee were 
instrumental in the establishment of the CBWI, which has 
allowed agricultural communities to make some of the most 
significant progress of any sector in the watershed. That kind 
of progress can only continue with your support.
    It is a combination of cost-sharing and technical 
assistance that will lead us to lasting success. Federal cost-
share dollars are leveraged through word-of-mouth and changing 
acceptance of what constitutes normal practices within the 
agricultural community itself, the kind of system change that 
comes through active participation of the local technical 
assistance providers.
    Third, innovation--as a state legislator, I understand the 
current budget situation that our states and the Federal 
Government are facing. I know that I cannot limit my remarks to 
a mere request for funding dollars. Instead, I want to 
acknowledge the important role of innovation--both innovative 
technologies and innovative funding programs--in making our 
limited dollars work more effectively. Innovation has provided 
some of the greatest strides in nutrient and sediment 
reductions to date. Example: phosphate-free detergents; 
phytase, a feed additive for poultry; and no-till are all 
examples of gains that have been made inside this watershed 
through innovation.
    Now, emerging technologies promise future gains. Precision 
agriculture, GPS technologies, and manure-to-energy 
technologies are just a few examples. These practices produce 
benefits for the environment and for the farmers' bottom line, 
benefits that could help redefine sustainable agriculture. But 
we currently lack the technical assistance and the verification 
mechanisms needed to get on-the-ground practices tracked 
accurately. Without them, we have a lost opportunity.
    When it comes to funding, we can be innovative by moving 
away from a single-focused program and instead give priorities 
to projects that achieve multiple goals such as manure-to-
energy.
    I see my time has expired, so I look forward to your 
question and answers later on.
    [The prepared statement of Mr. Brubaker follows:]

 Prepared Statement of Hon. Michael Brubaker, Chairman, Chesapeake Bay 
    Commission; Senator, Commonwealth of Pennsylvania, Annapolis, MD

    Good morning, Chairman Thompson, Ranking Member Holden, and Members 
of the Subcommittee. Thank you for the opportunity to present my 
testimony before you today.
    My name is Mike Brubaker. I am an agronomist by training, and after 
serving as CEO of private agricultural consulting firms, I now serve as 
a Pennsylvania State Senator, representing the 36th Senatorial District 
covering parts of Chester and Lancaster counties. I am also honored to 
serve this year as Chairman of the Chesapeake Bay Commission, a tri-
state legislative commission representing the General Assemblies of 
Pennsylvania, Maryland and Virginia, on matters of Bay-wide concern. 
Individually, the members of the Commission represent distinct areas of 
the watershed and bring an intimate knowledge of the local residents 
and their social, economic and environmental challenges. Collectively, 
the 21 members share the perspective of the full watershed and provide 
the least parochial and most comprehensive outlook among the leaders of 
the Bay Program.
    The Commission is now in its 31st year; it is important to note 
that its establishment pre-dates that of the Chesapeake Bay Program, of 
which we are a member. This history demonstrates the commitment that 
state government and state legislators, in particular, have to the 
restoration of this National Treasure.
    Our members are not term-limited, and we have a mix of new members 
as well as members who have served for more than 2 decades. 
Consequently, the Commission has witnessed first-hand the evolution of 
the Bay restoration effort, from the first gathering of a few concerned 
state legislators, to the current effort which is heavily influenced by 
an ambitious Total Maximum Daily Load (TMDL).
    I have been asked by this Subcommittee to review the implementation 
of Phase II of the Chesapeake Bay TMDL Watershed Implementation Plans 
and its impact on rural communities. That impact will be felt by all 
sectors, and we need to achieve reductions from all sectors, if our 
water quality goals are to be met. However, because the jurisdiction of 
this Subcommittee relates to agriculture, I have chosen to focus my 
remarks primarily on agricultural implementation.
    To begin with, while ambitious, our water quality goals, and the 
level of activity needed to meet them, are necessary if we are to 
achieve clean water in the Chesapeake Bay and the rivers and streams 
that feed it. Clean rivers and streams as well as a clean Chesapeake 
Bay are not only important environmental goals, but also important 
economic goals. Whether it be fly fishing in the cool streams of 
Pennsylvania or cruising down the Bay on a summer evening, clean rivers 
and a clean Chesapeake supports critical economic, recreational, 
environmental, and aesthetic elements of our lives.
    The question is: how can we best support and promote clean water in 
a time of challenging budgets and a struggling economy? In answer, I 
offer four recommendations:

    1. Innovation

    Innovation is needed not only in the technology and practices used 
        to achieve nutrient and sediment reductions, but also in the 
        ways that we fund the implementation of those practices.

    To date, innovation has provided some of the greatest strides in 
        nutrient and sediment reduction to date. The phosphate 
        detergent bans that replaced the phosphorus in home laundry and 
        dishwashing detergents with a less-polluting surfactant; and 
        ``phytase,'' a feed additive for poultry which reduced both the 
        phosphorus in the manure and the cost of feed to the farmers 
        are both examples of gains made through innovation.

    Emerging technologies continue to offer new promise. Farmers are 
        increasingly implementing precision agriculture techniques, 
        which improve the nutrient efficiency of both livestock growth 
        and cropping systems. These practices produce benefits for both 
        the environment and the farmer's bottom line--benefits that 
        could help to redefine the sustainability of agriculture. For 
        example, by combining farmer judgment with GPS technology, 
        operators can now avoid double or even triple seeding when the 
        tractors are turning around. The same is true for fertilizer 
        and pesticide application with the result being a 5-32% savings 
        in the fields. But we currently lack the technical assistance 
        needed to show individual farmers how these and other 
        technologies can be applied on their own farm and thus achieve 
        widespread adoption. Furthermore, we lack a clearly verifiable 
        and transparent mechanism to accurately track implementation of 
        these practices that will allow our farmers to get credit for 
        their improved environmental performance.

    On the horizon are advanced manure-to-energy systems that will 
        allow for more efficient recycling of nutrients, thus 
        mitigating the nutrient imbalances that currently exist in the 
        Chesapeake watershed. These systems have the additional benefit 
        of providing a reliable, domestic source of renewable energy. 
        Future technologies can be supported through policies that 
        generally support entrepreneurship, as well as a review process 
        that can quantify credit for nutrient and sediment reductions 
        based on sound science and verification.

    In times of thin budgets, we should also look for innovative 
        methods of funding. Instead of programs that focus on one goal, 
        funding priority should be given to projects that aim to 
        achieve multiple goals, such as manure to energy projects which 
        can provide energy independence and water quality benefits 
        while strengthening agricultural sustainability.

    Nutrient trading is another example of an innovative funding 
        strategy. Instead of focusing on specific practices or 
        technologies, trading allows the market to reward the most 
        cost-effective strategies. However, as mentioned above, an 
        effective market can only be achieved when the credits can be 
        quantified through a review process based on sound science and 
        verified implementation.

    2. Clear, predictable goals based on performance, not prescription

    The existing Watershed Implementation Plan (WIP) process 
        established under the Chesapeake Bay TMDL allows states to 
        develop clear actions for attaining necessary pollution 
        reduction goals. It also allows the state to prioritize these 
        specific actions. This is a sound approach, and one that should 
        also extend to implementation at the municipal and farm level. 
        While there should be certain basic standards to be met for 
        compliance, the actual practices required to meet those 
        standards will vary from town to town and farm to farm. Local 
        choice is the key.

    Similarly, farmers who voluntarily step forward and ``do the right 
        thing,'' and then verify the implementation of those practices 
        to achieve necessary WIP pollution reductions, should receive a 
        level of certainty or predictability, for a time certain, that 
        they will not be subject to new or more rigorous standards if 
        the Federal Government changes its mind about what is the 
        expectation for compliance under the WIP. While our knowledge 
        and understanding of the Bay will change over time, resulting 
        pollution reduction demands should be deliberative and 
        predictable to those already acting in a responsible manner.

    A process is currently underway among our state governments to 
        define what a certainty program might look like for the region. 
        While there may be a place for Federal action on this matter, 
        we ask that both Congress and EPA consider the outcome of this 
        state-led effort before finalizing any action.

    3. Technical Assistance

    The key to the success of all implementation is the presence of 
        knowledgeable people--boots on the ground--who make it happen. 
        Local USDA and conservation district staff, and other technical 
        service providers, deliver locally-relevant and science-based 
        information to farmers and other landowners. Regardless of 
        cost-share assistance, the presence of trusted local partners 
        is imperative to success.

    While technical assistance funding associated with cost-share 
        through programs such as EQIP and CBWI is important, 
        traditional planning support through the Conservation Technical 
        Assistance budget, and targeted supplemental support such as 
        that provided through the SWAT (strategic watershed action 
        teams) is also critical. Historically, technical assistance 
        funding has not significantly increased, despite an increasing 
        need (see Figure 1).

    Additionally, efforts should be made to assure that technical 
        assistance is available throughout the life of a cost-share 
        contract. Although practice contracts can last 3-5 years, 
        technical assistance is funded year-to-year, leaving a project 
        vulnerable to a lack of planning or engineering to see it 
        through.

    4. A strong partnership across all levels of government

    The current WIP process, which provides a clear Federal standard 
        and allows for state flexibility in implementation, is now 
        moving to a new phase where the important role of local 
        partners is being acknowledged and enhanced. However, this 
        process should not result in the responsibility merely being 
        passed down the chain. Each level and branch of government has 
        an important role to play in support of the common goal.

    At the local level, planning, coordination and implementation will 
        result in the lasting change we desire, but people are key to 
        making it happen. Both state and Federal Governments can 
        support local efforts through financial incentives, technical 
        assistance and providing flexibility. This support can take the 
        form of direct funding or program assistance, or eligibility 
        for enhanced support that could be dependent on the 
        implementation of ordinances or other actions.

    At the state level, we have the responsibility to directly engage 
        local governments and other partners to be clear about what 
        must be accomplished. As we explore and evaluate the many ways 
        we can support local efforts, we must consider flexibility that 
        enables cost-efficiency. This approach should be applied 
        broadly to include actions such as the authorization of 
        stormwater authorities, the eligibility criteria for state 
        funding, the establishment of clear statewide standards for 
        pollution reduction, and the development of robust trading 
        programs. The state's role is critical for coordinating our 
        funding programs to leverage their value and achieve multiple 
        benefits.

    At the Federal level, USDA conservation programs, including 
        technical assistance, remain the single biggest source of 
        support for implementation of non-point source best management 
        practices (BMPs). Nationwide programs such as EQIP 
        (Environmental Quality Incentives Program) and the regional 
        Chesapeake Bay Watershed Initiative (CBWI) have been a critical 
        source of support for our farmers.

    Created in the last farm bill, through the bipartisan leadership of 
the Congress, including key Members of this Subcommittee, CBWI has 
uniquely demonstrated the success of targeted conservation. Not only 
does CBWI target Federal money to a region with a significant need for 
additional conservation, CBWI allows that money to be further targeted 
to the sub-watersheds and specific BMPs that will achieve the most 
cost-effective reductions. It is the combination of Technical 
Assistance with cost-share dollars that provides the magic.
    Let me take a minute to illustrate just how important this targeted 
approach has been to the agricultural progress made thus far. The 
agricultural community has contributed handsomely to achievement of our 
water quality goals, with the sector more than half way to the goal 
line, thanks in large part to the funding provided via EQIP and CBWI.
    In the USDA Conservation Effects Assessment Project (CEAP) report 
for Chesapeake Bay, the agency concludes that 810,000 acres of farmland 
have a high level of need for conservation practices, while a moderate 
level of need exists on approximately 2.6 million acres. All totaled, 
to make our water quality goal, NRCS he s committed to applying 4 
million acres of new conservation by 2025. Translated, this will mean 
that NRCS must apply conservation practices on a minimum of 270,000 
acres each year from 2010-2025. Since 2009, CBWI funds have been used 
to develop contracts for treating approximately 510,000 acres of 
working lands and account for 74% of NRCS's annual ``acre goal'' for 
2010 and 2011. EQIP and other conservation support programs round out 
the difference and provide the foundation for meeting state 
implementation goals.
    If CBWI funding were to be continued in the 2012 Farm Bill at an 
annual rate of $50 million baseline, and carried forward from 2013-
2025, NRCS could fund approximately 16,250 more contracts to treat 
about 2.34 million additional acres in priority watersheds. Other 
financial assistance funds provided via the formula allocations of such 
programs as EQIP are also spent in priority watersheds. However, CBWI 
forms the core of the agency's financial assistance in these areas.
    These dollars are further leveraged through word of mouth and 
changing definitions of normal practices within the agricultural 
community itself. Only a decade ago, farmers practicing no-till were 
the exception. Today, after targeted outreach efforts about this 
practice coupled with cost-share assistance, a majority of our crop 
acres are no-tilled. And, most of these acres have been converted to 
no-till without direct cost-share.
    You cannot harvest a crop without first planting the seed. Cost-
share dollars provide the seed, technical assistance and outreach 
provides a robust soil in which that seed can grow. With the right 
combination, we can reap the benefits of improved water quality.
    As stated earlier, promoting innovation, coordination of energy and 
conservation programs, as well as acknowledgement of state-specific 
programs of regulatory certainty, are other ways that the Federal 
Government, and this Subcommittee in particular, can be of assistance 
to our farmers and local partners in their conservation efforts.
    Thank you again for the opportunity to testify before you today. I 
am happy to answer any questions you may have.

Figure 1
USDA Conservation Funding 1983-2010


        Source: ERS analysis of USDA budget summary data.
        Produced by Penn State University College of Agricultural 
        Sciences.

    The Chairman. Thank you, Chairman.
    It is a pleasure to introduce Mr. Shaffer.

STATEMENT OF CARL SHAFFER, PRESIDENT, PENNSYLVANIA FARM BUREAU 
                  FEDERATION; MEMBER, BOARD OF
   DIRECTORS, AMERICAN FARM BUREAU FEDERATION, CAMP HILL, PA

    Mr. Shaffer. Thank you, Chairman Thompson, Ranking Member 
Holden. I really appreciate the opportunity to testify on 
behalf of the Pennsylvania Farm Bureau and the American Farm 
Bureau Federation.
    Pennsylvania's Department of Environmental Protection is 
working with more than 150 partners in developing the Watershed 
Implementation Plan. This is the process the Congress intended 
under the Clean Water Act. Unfortunately, in our view, EPA is 
micromanaging states and usurping their authority. An example 
of this can be seen in EPA's disapproval of Pennsylvania's 
first Water Implementation Plan. Not only did EPA reject our 
first plan but they were less than helpful when responding to 
questions about their expectations of states. Moreover, the 
timeline for which the states were given to develop the plan 
was inadequate, and states were expected to draft plans without 
knowing the required reductions.
    The process of developing Phase II of the WIP is taking a 
similar track. Pennsylvania's Department of Environmental 
Protection is working to reach out to county and local 
governments in the 43 counties within the Bay watershed to 
obtain the necessary data and insight. This activity takes time 
to get it right. Like the development of the TMDL, the 
submission of the Phase I WIP, the EPA is hurrying the process 
while offering little guidance of any value.
    What is most disturbing is the EPA is still telling state 
and now local governments to develop a plan based on poor and 
inadequate data. In September, Pennsylvania pointed out that 
EPA's model continues to assume inaccurate manure application 
rates. Specifically, the Commonwealth wrote, ``within EPA's 
model about 50 percent of the cropland and 90 percent of all 
row crops receive manure.'' Well, in USDA's National 
Agricultural Statistics Service reports, only 24 percent of the 
total harvested cropland receives manure.
    Despite this knowledge of real and valid data, EPA 
continues to threaten retaliatory action against states if they 
do not meet the unsupported and ever-changing goals. As 
taxpayers, Farm Bureau members are concerned that millions of 
dollars may be spent to chase paper compliance with a model 
that uses faulty assumptions rather than valid and readily 
available data. EPA's modeling has not given taxpayers in the 
Bay watershed assurance that the model will get us close to the 
required reductions.
    If millions and millions of dollars are spent, the 
practices are implemented, and reality proves the modeling 
projections are wrong, what then? Will farmers and other 
businesses and communities be expected to spend even more? 
State agencies also share these concerns. Pennsylvania's 
previous Administration wrote, ``in general, Pennsylvania's 
concern that EPA's approach to the Draft Chesapeake Bay TMDL is 
neither practical, equitable, nor cost-effective and could 
reverse progress in meeting our water quality goals.'' Last 
month, Virginia wrote to EPA saying, ``the current watershed 
model is undermining the credibility of our collective 
efforts.''
    As I stated just 7 months ago, farmers are seriously 
concerned about their ability to continue to operate their 
farms in the Chesapeake Bay watershed. One reason is that EPA's 
TMDL establishes a binding allocation and timelines regardless 
of cost. Several Bay states estimate that implementation will 
cost billions of dollars. We believe the TMDL threatens the 
economic health of businesses, individuals, and communities 
throughout the Bay watershed.
    Finally, I would be remiss if I did not mention the 
positive outcomes realized and real water quality improvements 
that have occurred due to farm bill conservation programs. Many 
farm bill conservation programs have helped agricultural 
producers implement conservation measures to comply with 
regulatory mandates by EPA.
    I would really like to thank the Committee for convening 
this hearing and I would be pleased to respond to any 
questions. Thank you.
    [The prepared statement of Mr. Shaffer follows:]

Prepared Statement of Carl Shaffer, President, Pennsylvania Farm Bureau 
      Federation; Member, Board of Directors, American Farm Bureau
                       Federation, Camp Hill, PA

     Thank you, Chairman Thompson and Ranking Member Holden. I 
appreciate the opportunity to appear before you today and to provide 
comments on behalf of the farm and rural family members of Farm Bureau. 
My name is Carl Shaffer, and I have the privilege of serving on the 
Board of Directors of the American Farm Bureau Federation and as 
President of the Pennsylvania Farm Bureau. Farm Bureau represents farms 
of all sizes, spanning virtually all commodities grown and sold in our 
great nation. I am pleased to offer this testimony, on behalf of the 
Pennsylvania Farm Bureau, the American Farm Bureau Federation and its 
more than 6.2 million member families.
    I own and operate a farm in Columbia County, where I raise green 
beans for processing, corn and wheat. All the land I farm is in the 
Chesapeake Bay Watershed, and most of the land is within sight of the 
Susquehanna River. As we speak, at least two agencies of Pennsylvania's 
state government--the Department of Environmental Protection (DEP) and 
Department of Agriculture--are working to develop Phase II of the 
Watershed Implementation Plan (WIP) for the Chesapeake Bay Watershed. 
Pennsylvania Farm Bureau has been involved in the WIP process since it 
first began almost 2 years ago, and we sit on the WIP Management Team, 
a group of industry, governmental and environmental groups working with 
DEP officials provide advice and insight on objectives and actions the 
Commonwealth should pursue to reduce pollution in the Chesapeake Bay 
Watershed in a manner that is environmentally effective and 
economically feasible.
    The planning process being implemented by our state DEP--working 
with more than 150 partners and state law--is one that, we believe, 
Congress intended to be implemented under the 1972 Clean Water Act in 
effectively managing pollution of waterways and responding to more 
serious water pollution problems. Unfortunately, in our view, recent 
regulatory actions by the Environmental Protection Agency (EPA) to 
micromanage and dictate environmental performance in the Chesapeake Bay 
Watershed have needlessly and unlawfully usurped the responsibilities 
that the Act intended to be reserved and addressed by the states. An 
example of this can be seen in EPA's review and disapproval of 
Pennsylvania's first WIP. Not only did EPA reject Pennsylvania's first 
plan, but throughout that process, state agencies and the affected 
industries would repeatedly ask EPA officials if a certain approach 
would be sufficient in meeting the goals and objectives of the Federal 
agency. Those questions were most often met with responses seriously 
lacking helpful guidance. Moreover, the timeline for which 
Pennsylvania, and other states for that matter, was given for 
development of the plan was woefully inadequate, and states were 
expected to draft plans without knowing what their required nutrient 
and sediment reductions would be.
    The process of developing Phase II of the WIP is taking a similar 
track. Pennsylvania's DEP is working diligently to reach out to county 
and local governments in the 43 counties of Pennsylvania within the Bay 
Watershed to obtain the necessary data and insight on workable 
solutions to reduce nutrient and sediment runoff at the local level--an 
objective that EPA is demanding in the Phase II segment of Watershed 
Plans. Despite the deadlines and expectations of EPA, this action is 
taking a significant amount of time in order to get it right. Like the 
development of the TMDL and the submission of the Phase I WIPs, EPA is 
driving a hurried process on the part of the states while offering 
little guidance of value. What's most disturbing is that EPA is still 
asking state, and now local, governments to develop a plan based on 
poor and inadequate data.
    The timeline that Pennsylvania is expected to meet, along with the 
other Bay states, is quite unreasonably ambitious. The Draft Phase II 
WIP must be submitted to EPA by Dec. 15, 2011 and the final plan is 
then due by March 30, 2012.
    The demands that EPA is putting on Bay states in Phase II is 
further crippling states' ability to devise a program that will 
encourage meaningful and effective long-term benefits, already hampered 
by the demands that EPA has already placed so far through EPA's 
excessive TMDL regulation. Let me spend a moment to highlight some of 
the problems with EPAs' total maximum daily load (TMDL). Under EPA's 
Chesapeake Bay TMDL, all the pollutant loadings to the Bay and the 
reductions in those loadings take place in ``model world.'' The model 
world appears to have no basis in reality and has very little to do 
with the real conservation efforts of farmers. Please note the attached 
timeline * because it enumerates the concerns with EPA's models raised 
by scientists, states and other stakeholders. In the short time that I 
have, I want to focus on the lack of scientific realities specific to 
Pennsylvania agriculture.
---------------------------------------------------------------------------
    * The document referred to and other submitted documents are 
retained in Committee file.
---------------------------------------------------------------------------
    Nutrient management provides a good example. EPA's TMDL says that 
regulated agricultural operations in the Pennsylvania part of the 
watershed for the Susquehanna River can deliver no more than 761,488.58 
pounds of nitrogen, 18,589.44 pounds of phosphorus, and 2,688,715.58 
pounds of sediment to the Bay. These numbers apply to farms in 
Pennsylvania, even though the Susquehanna River itself is meeting 
Pennsylvania water quality standards for nutrients.
    One way EPA seeks to force reductions in nutrient and sediment 
loads is by increasing the rate of adoption of best management 
practices (BMPs). For agriculture, EPA assumes that 47.2 percent of 
farms have already adopted nutrient management practices. In its TMDL, 
EPA requires 85 percent of farms to adopt ``enhanced nutrient 
management practices.''
    EPA's requirement makes no sense because all Pennsylvania 
agriculture operations that generate manure are already subject to 
nutrient management requirements. However, EPA's Chesapeake Bay models 
do not credit non-cost-shared nutrient management practices, so they 
misrepresent the on-the-ground reality of nutrient management on 
Pennsylvania farms. This flaw was pointed out by numerous stakeholders. 
For example, in its draft Watershed Implementation Plan, Pennsylvania 
stated:

        A significant number of agricultural and other best management 
        practices that have been implemented in Pennsylvania have not 
        been `tracked' and entered into the Chesapeake Bay Model. A 
        significant level of interest in this deficiency was expressed 
        by Pennsylvania's Agricultural Watershed Implementation Plan 
        workgroup. Pennsylvania pilot project efforts in Lancaster and 
        Bradford counties, as well as preliminary evaluation of data 
        from NASS indicates that as much as 84 percent of some 
        implemented BMPs have not been entered into the Bay model, 
        resulting in potentially significant nutrient and sediment 
        reductions not being accounted for in the reductions 
        attributable to Pennsylvania.

    In another example, EPA's model assumes that only 57,659 tons of 
manure are transported from Pennsylvania to locations outside of the 
Chesapeake Bay Watershed. However, Pennsylvania told EPA in September 
2010 that all Chesapeake drainage county conservation districts in 
Pennsylvania report the export of manure from the county, and 227,527 
tons left the Chesapeake Bay Watershed.
    EPA's model also assumes that at least 15 percent of all manure at 
an animal feeding operation production area is simply ``lost'' and ends 
up in the waterways. Even though EPA was told that this assumption was 
ludicrous, it made no changes.
    EPA did not correct these discrepancies between its model and 
reality and finalized the Chesapeake Bay TMDL in December 2010, knowing 
full well that it had not properly accounted for agricultural BMPs and 
was misrepresenting manure management in Pennsylvania and other 
jurisdictions. EPA cited an out-of-court settlement agreement as its 
excuse for rushing to complete the TMDL, even though it had received 
requests to extend the deadline, including requests from Reps. 
Goodlatte and Holden of this Subcommittee.
    Instead, EPA promised to make some changes to land use and nutrient 
management assumptions in the Chesapeake Bay Model in 2011, in time for 
the revised model to be used for the Phase II Watershed Implementation 
Plans. However, in the new models (Phase 5.3.2) EPA only changed the 
number of acres of impervious surface and some nutrient management 
assumptions. It did not address the lack of credit for non-cost-shared 
BMPs. It did not address the fact that a single piece of land can 
utilize multiple BMPs. It did not correctly apply the recommendations 
of the Agricultural Work Group regarding nutrient management. And, it 
did not address the 15 percent manure loss assumption that is built 
into the model.
    As a result, EPA made its model worse, not better. EPA again rushed 
to meet the arbitrary deadline it established for state submission of 
Phase II Watershed Implementation Plans and has again developed a model 
that does not reflect reality.
    When the Chesapeake Bay Watershed states began using EPA's revised 
model to try to develop their Phase II Watershed Implementation Plans, 
they began to get inconsistent results. For example, when Virginia 
tried to use EPA's model to determine how much Charles City County 
needed to reduce sediment, it found that, while the old model told them 
that Charles City County needed to reduce sediment by 48 percent, the 
new model says that Charles City County could increase sediment by 406 
percent. Obviously, states and every community or business in the 
Watershed that has been assigned an allocation and a responsibility 
under EPA's TMDL is concerned. EPA's refusal to take the time to 
improve its models, or to reduce its reliance on models, is undermining 
the public's confidence. Worse, EPA's Federal TMDL could cause people 
to spend scarce resources on conservation measures that are directed to 
the wrong sources or the wrong areas.
    A news article reporting the previously referenced inconsistencies 
in Virginia quoted an EPA official dismissing the concerns of local and 
state governments on modeling data saying, ``Use common sense. Let's 
get on with it.'' Another EPA official is quoted as saying, ``None of 
this stuff should impede the planning for what everyone knows is needed 
to be done.'' Unfortunately, common sense tells us as farmers that 
ever-shrinking public dollars, and hard earned private capital, must be 
applied in a manner to achieve actual and proven water quality 
improvements, not compliance with a model based on assumptions that 
puts out inconsistent prescriptions for water health.
    As taxpayers, Farm Bureau members across the nation are concerned 
that millions of dollars can be potentially spent to chase paper 
compliance with a model that uses faulty assumptions rather than valid 
and readily available data, and a computer model that shows 
inconsistencies, as displayed in the Charles City County instance. 
EPA's questionable modeling has not given taxpayers in the Chesapeake 
Bay Watershed reasonable assurance that the practices the model is 
directing the states to implement and the millions of dollars the 
states will need to spend to implement these practices will get it even 
close to the reduction goals EPA is demanding states to meet. If the 
millions are spent, the practices are implemented, and reality proves 
the modeling projections are wrong, then what? Will farmers, other 
businesses and communities be expected to spend even more monies and 
resources to pursue other practices and programs directed through a 
modified model?
    As farmers, business-owners and economic engines of the nation's 
economy, Farm Bureau members are worried that the private investments 
they are making to improve water quality, based on the flawed model, 
will be for naught and will not be credited to them as individuals, or 
to the agricultural industry, in the same model.
    On Nov. 8, 2010, Pennsylvania's DEP and Department of Agriculture, 
under the previous Administration of then-Governor Ed Rendell, wrote to 
EPA stating:

        In general, Pennsylvania is concerned that EPA's approach to 
        the Draft Chesapeake Bay TMDL is neither practical, equitable, 
        nor cost-effective and could reverse progress in meeting our 
        water quality goals.

    In a meeting with EPA on Sept. 16, 2011, the Watershed 
jurisdictions rebelled against using EPA's model. As noted by the 
Commonwealth of Virginia in a Sept. 28, 2011 letter to EPA summarizing 
that meeting: ``the current Watershed Model is undermining the 
credibility of our collective efforts.''
    In the Sept. 16, 2011 meeting, concerns were raised by 
Pennsylvania, Maryland and Virginia. For example, Pennsylvania pointed 
out that EPA's model continues to assume inaccurate manure application 
rates. According to Pennsylvania:

        Within EPA's model about 50 percent of crop land and 90 percent 
        of all row crops receive manure. USDA's National Agricultural 
        Statistics reports that 24 percent of total harvested cropland 
        receives manure.

    EPA's response to the states' concerns has not been entirely 
satisfactory. In a letter dated Oct. 5, 2011, EPA finally admitted that 
its models could not support allocations below the scale of a major 
river basin. However, EPA is still demanding Phase II Implementation 
Plans from states that include a narrative of how the states are to 
meet those river basin-wide allocations. Also, EPA's letter says 
nothing about the validity of the thousands of allocations that are 
already in the Final TMDL. Finally, in a question-and-answer document 
issued on Oct. 17, 2011, EPA repeated its threats to take retaliatory 
action against states if they do not meet EPA's ever-changing 
expectations.
    On Oct. 17, 2011, EPA also released a plan for responding to the 
modeling concerns raised by the states. Unfortunately, each concern 
that involved a change to the model was pushed back to 2017. The only 
fix EPA is willing to make before 2017 is the recognition of additional 
BMPs. In response to concerns about wildly varying loadings resulting 
from the new model, EPA suggests that states focus their communication 
on implementation goals rather than pounds per acre reductions. That 
advice is difficult to follow when the TMDL specifies specific pounds 
of reductions for over 488 individual sources and communities with 
large storm sewer systems as well as aggregate (by river basin) pounds 
of reduction to be met by all the animal feeding operations, all the 
row crop agriculture, all septic systems and smaller municipal storm 
sewer systems in each river basin.
    Even though the TMDL currently has aggregate pollutant loadings for 
agriculture on a river basin basis, EPA plans to develop a ``certainty 
framework'' that would track a farm's progress towards meeting the 
modeled reductions needed to meet a modeled result on a farm-by-farm 
basis. As noted above, EPA's models are not accurate at the county 
scale, much less the farm scale, and the Federal TMDL should not impose 
specific reductions on specific farms or areas of land.
    Pennsylvania's Secretary for Environmental Protection, Michael 
Krancer, who is also providing testimony today, has the unforgiving 
task of trying to weave the effective environmental programs and 
regulatory measures already being done in Pennsylvania into EPA's 
unrealistic and deeply flawed requirements. Pennsylvania Farm Bureau 
appreciates the opportunities we have been given to participate in 
state processes for planning and development of programs that have 
proven, not theoretically, benefits to local watersheds
    Pennsylvania's farm families strongly agree with the approach set 
forth by the Clean Water Act that gives state agencies the lead in 
working with non-point sources. To that end, let me provide some 
examples on how Pennsylvania's agricultural community and our state's 
environmental regulatory agency, have taken significant steps in 
working cooperatively to improve our water quality. This positive 
effort has provided measurable benefits to the citizens of the 
Commonwealth who live near or use waterways downstream.
    In Pennsylvania, water quality improvements have been made as a 
result of the following state regulations and initiatives (as well as 
others, not specifically mentioned below):

   Pennsylvania Erosion and Sediment Control Regulations

    All farms must implement BMPs to control erosion and sedimentation 
        for all disturbed lands, including plowing and tilling 
        activities. Written erosion and sedimentation (E&S) control 
        plans must be kept on site for all plowing and tilling 
        activities that disturb 5,000 square feet or more. Plans must 
        contain plan maps, soils maps, waters of the Commonwealth, 
        drainage patterns, BMPs, descriptions of tillage systems used 
        and schedules.

   Mandated State Standards for Storage and Land Application of 
        Manure

    Every animal farmer, regardless of the farm's size or animal 
        concentration, must operate his or her farm and manage animal 
        manure in a manner that is consistent with the practices and 
        standards identified in DEP's ``Manure Management Manual for 
        Environmental Protection.'' Any practice that substantially 
        deviates from the manual's practices must obtain specific 
        approval or permit from DEP. Every farmer who generates manure 
        or receives manure for land application is required by state 
        law to develop and implement written manure management plans 
        that demonstrate the use of management practices that control 
        nutrient runoff from farms.

   Pennsylvania Clean Streams Law

    This statute prohibits discharges of animal waste into streams. The 
        degree of penalties to be assessed are based on the willfulness 
        of the violation, the damage or injury that occurs to the 
        waters or natural resources of the Commonwealth, the costs for 
        correcting or mitigating the damages, and other relevant 
        factors. Substantial penalties are often assessed on violations 
        that result in fish kills or other serious injury to aquatic 
        life.

   Pennsylvania's Nutrient and Odor Management Act

    This law prohibits Concentrated Animal Feeding Operations (CAFOs), 
        Concentrated Animal Operations (CAOs) and any operation 
        receiving animal manure from a CAFO or CAO from mechanically 
        land applying the manure within 100-feet of a perennial or 
        intermittent stream with a defined bed or bank, a lake, or a 
        pond. Exceptions exist where a qualified 35-foot vegetated 
        buffer is established along the water bodies. Recent statutory 
        and regulatory changes to the Act also require the development 
        and implementation of nutrient plans approved by regulatory 
        agencies to minimize runoff of nitrogen and phosphorus into 
        waters of the Commonwealth, and require owners of land 
        receiving manure generated from a CAFO or CAO farm to 
        demonstrate through nutrient balance calculations that 
        nutrients from the manure will not exceed the nutrient needs of 
        plants and vegetation to be grown on the land.

   Pennsylvania Concentrated Animal Feeding Operation (CAFO) 
        Program

    The program requires either National Pollutant Discharge 
        Elimination System (NPDES) general or individual permits for 
        animal operations with over 1,000 Animal Equivalent Units 
        (AEUs) and CAOs with over 300 AEUs. Pennsylvania's CAFO 
        permitting program has been expanded to include: poultry 
        operations that use dry manure handling systems and are CAOs 
        with more than 300 AEUs or that have 1,000 or more AEUs; horse 
        operations that are CAOs with more than 300 AEUs or that have 
        1,000 or more AEUs; or any animal operation defined as a large 
        CAFO under the Federal CAFO Regulations. The scope of farms 
        required under state law to obtain NPDES permits is broader 
        than the scope of farms required to obtain NPDES permits under 
        Federal law.

   Best Management Practices Manual for Pennsylvania Livestock 
        and Poultry Operations

    This manual was developed to outline BMPs which can assist 
        livestock and poultry operations in their effort to protect 
        local and regional natural resources, and to allow them to 
        successfully integrate into the neighboring community. Some of 
        the BMPs described are mandatory due to current regulations; 
        other voluntary efforts are suggested to assist producers in 
        addressing specific concerns.

   Pennsylvania Fish and Boat Code

    State law prohibits the placement or allowance of any substance 
        harmful to fish into streams. In addition to imposition of 
        fines, a person who places or allows a substance into a stream 
        is required to pay damages for fish that are killed or injured 
        as a result of the substance being introduced into the stream. 
        Penalties and damages are in addition to any penalties that may 
        be assessed under the Clean Streams Law.

   Pennsylvania Stream Protection Program

    This program allows streams to upgrade to High Quality (HQ) or 
        Exceptional Value (EV) protection status. The program regulates 
        activities and discharges adjacent to upgraded streams.

   Pennsylvania Dam Safety and Encroachment Act

    Permits are required for activities located in, along or across 
        streams or wetlands. Pennsylvania's wetland protection 
        regulations exceed Federal requirements.

   Pennsylvania Flood Plain Management Act

    The construction of manure storage facilities in a flood plain must 
        meet upgraded construction standards.

    Stream health and aquatic rebirth in the Keystone State are 
improving each year. An example of this occurred at a recent 
Pennsylvania Fish and Boat Commission meeting on April 11-12, 2011 
where nearly 100 streams--in 32 different counties--were presented to 
the commission for adoption as ``Wild Trout Streams.'' The Pennsylvania 
Fish Commission defines such a stream as ``a remote, natural and 
unspoiled environment where man's disruptive activities are 
minimized.'' Wild trout are an excellent indicator of water quality and 
stream health. These upgrades in stream classifications were made 
possible by the ongoing and collaborative efforts of farmers, 
landowners and state and local regulators applying local and 
individualized solutions to water quality concerns.
    Pennsylvania also has an effective nutrient management program in 
place. Pennsylvania's Nutrient and Odor Management Act provides the 
opportunity for animal farms whose animal numbers and concentrations 
are below those of a regulated CAO or CAFO to voluntarily act in 
developing and implementing reviewed and approved nutrient management 
plans in the same manner as regulated CAOs or CAFOs. Those who do so 
are given modest protections from enforcement penalties. Each year, the 
Commonwealth sees an increase in volunteer nutrient management 
planning--in the early 1990s fewer than 2,000 acres were enrolled in 
Pennsylvania's nutrient management program; today this program covers 
1.3 million acres. Several years ago, Pennsylvania's DEP estimated that 
approximately half of the total manure being generated by the 
Commonwealth is now being managed under approved nutrient management 
plans of regulated and volunteer farms. This demonstrates farmers' 
desires to be good stewards of the land and to protect our natural 
resources for future generations. Furthermore, Pennsylvania was the 
first state in the Union to implement mandatory requirements for 
nutrient management plans for CAOs and CAFOs, a practice that was in 
place long before the current scrutiny on the Chesapeake Bay TMDL.
    Additionally, Pennsylvania's State Conservation Commission 
implements the Dirt and Gravel Road Program. This program is an 
innovative effort to fund environmentally sound maintenance of unpaved 
roads that have been identified as sources of erosion and sediment 
pollution. The program is based on the principle that informed and 
empowered local effort is the most effective way to stop pollution. The 
Dirt and Gravel Road program has inspected 16,500 miles of public 
unpaved road, and has set up 16,600 ``worksites'' where road runoff 
negatively impacts a stream are mapped and assessed. This program has 
stabilized more than one quarter of a million square feet of streams 
near 640 miles of rural roads since 1997. These state and local efforts 
are significantly reducing sediment discharge. Expansion of Federal 
jurisdiction over these small streams would only complicate an already 
successful program.
    Although Farm Bureau and state officials try to work cooperatively 
in developing effective and feasible regulatory initiatives to improve 
water quality, we can and do have material disagreements over 
regulatory measures the Commonwealth ultimately decided to impose. A 
very recent example is the aforementioned revision of the ``Manure 
Management Manual,'' which will likely be finalized by DEP very soon. 
DEP rejected a number of concerns and recommendations offered by 
Pennsylvania Farm Bureau that we believed would place significant and 
unworkable requirements on smaller animal farm operations without 
providing any meaningful enhancement of water quality. While 
disappointing, DEP's response illustrates the larger picture--that 
Pennsylvania's regulatory agencies are not unduly influenced by 
industry and in fact, do make their own independent judgments. In 
discussions with other state Farm Bureaus, we believe that other states 
apply the same independence in judgment as applied by DEP in regulatory 
management of water quality.
    We believe any contention that state agencies are incapable of 
effectively regulating and improving water quality are quickly 
dismissed when a Federal regulator applies common sense to the 
assessment of Pennsylvania's accomplishments. Surely other states in 
the Bay Watershed, and nationally, have similar improvements in water 
quality that have little to do with Federal edicts. EPA has made it 
quite clear that their current focus on the in the Chesapeake Bay 
Watershed is a model for other watersheds across the nation. While we 
believe their actions go beyond their authority under the law and have 
filed a complaint in Federal court, farmers will continue the work of 
stewarding our natural resources, improving water quality and feeding 
America.
    As I stated just 7 months ago, farmers are seriously concerned 
about their ability to continue to operate their farms in the 
Chesapeake Bay Watershed. This is because of the continuous onslaught 
of regulations, guidance and other requirements being issued by the 
EPA. EPA's focus on agriculture and its over-reaching restrictions are 
particularly troublesome because agriculture has worked successfully 
with the U.S. Department of Agriculture (USDA) to reduce its 
environmental impact on the Bay.
    EPA's TMDL wrongly establishes binding allocations and timelines 
regardless of cost. Clean Water Act and EPA regulations specifically 
allow states to consider economic consequences and to modify water 
quality goals when necessary to avoid substantial economic and social 
disruption. EPA asserts that the TMDL will restore jobs and help the 
Bay economy, but it has not provided any data to support these claims. 
The Bay states, however, estimate that implementation will cost 
billions of dollars (e.g., $7 billion for Virginia, $3 billion to $6 
billion for New York). Farm Bureau believes the TMDL threatens the 
economic health of businesses, individuals and communities throughout 
the Chesapeake Bay Watershed.
    Finally, I would be remiss if I did not mention the positive 
outcomes realized, and real water quality improvements that have 
occurred due to farm bill conservation programs, including the 
Environmental Quality Incentive Program (EQIP), the Conservation 
Reserve Program (CRP)--or its state counterpart, the Conservation 
Reserve Enhancement Program (CREP), the Emergency Conservation Program 
(ECP), the Farm and Ranchland Protection Program (FRPP), the Chesapeake 
Bay Watershed Initiative (CBWI) and others. Many of the farm bill 
conservation ``working lands'' programs, including those referenced, 
help agricultural producers implement conservation measures to comply 
with regulatory mandates by EPA.
    I would like to thank the Committee for convening this hearing and 
for all your hard work on behalf of agriculture across the country. I 
will be pleased to respond to questions.

    The Chairman. Thank you, Mr. Shaffer. And I now yield to 
Mr. Goodlatte for purposes of the introduction of our final 
witness on this panel.
    Mr. Goodlatte. Well, Mr. Chairman, thank you for that 
honor.
    I am very pleased that we have with us Turner Perrow, a 
member of Lynchburg City Council who comes to us not only with 
experience of the impact of this issue on local government, but 
also with a civil engineering degree from Virginia Military 
Institute. And having worked as a consultant engineer designing 
overflow and other infrastructure projects while working 
closely with the City of Lynchburg, he has a professional 
engineering designation, so I think he can speak to this issue 
from a couple of vantage points. In 2008, he was elected to 
represent the city's 4th Ward and I am delighted that he has 
come up here to be with us today.
    Turner, welcome.

       STATEMENT OF HON. EDGAR J.T. PERROW, Jr., WARD IV
            REPRESENTATIVE, LYNCHBURG CITY COUNCIL,
                         LYNCHBURG, VA

    Mr. Perrow. Thank you, Congressman. Good morning, Mr. 
Chairman, Members of the Committee. I am very concerned about 
what our locality and others are being compelled to do. It is 
estimated that the cost to Virginia communities alone is over 
$7 billion. The schedule for the implementation of these new 
Chesapeake Bay Total Maximum Daily Load final report 
regulations is arbitrary; no other TMDLs that we are aware of 
have a fixed schedule or are required to have a fixed schedule 
by the Clean Water Act. Instead of establishing a realistic 
schedule based on the ability to implement, the schedule is 
being driven purely by the EPA's voluntary settlement of a 
lawsuit with the Chesapeake Bay Foundation and others.
    As a member of Virginia's Phase II Watershed Implementation 
Plan Stakeholders' Advisory Group, I was told that the model--
the theoretical mathematical program used to predict pollutant 
loading--is seriously flawed. On a macro scale, it is thought 
to be fairly accurate in its ability to establish the overall 
loading reductions needed for the Bay to meet Water Quality 
Standards. However, on a smaller scale there are significant 
and validated concerns.
    In the recent 5.3.2 model release, Lynchburg's load 
reduction goals have significantly increased compared to the 
prior model version, while another community just downstream in 
the same river basin is shown to be able to increase its 
sediment loadings by 350 percent. This obviously does not make 
sense, which calls into question the overall validity of the 
model and creates significant challenges for local governments 
to be able to plan and defend investments needed to clean up 
the Bay.
    In October, the EPA basically acknowledged in 
correspondence with the Bay states that the model does not work 
at a local scale. We are also pleased that the EPA has recently 
issued a memorandum offering flexibility for localities 
nationwide to prioritize various Clean Water Act actions, 
although it is difficult to see how this flexibility would 
apply in the Chesapeake Bay watershed states given the 
magnitude and schedule of EPA Chesapeake Bay's TMDL 
requirements.
    In the City of Lynchburg, the additional cost to be 
incurred due to the Bay TMDL Report potentially includes a $70 
million wastewater treatment plant upgrade and an estimated 
$110 million capital investment in stormwater infrastructure. 
Annually reoccurring costs of $12 million are to be expected. 
This is a four percent increase of our city's expenses, 
approximately $140 annually per household. We are approximately 
a 72,000-person city.
    Since Fiscal Year 2010, we have cut our budget by 11 
percent and expect another two percent cut this year. Our 
revenues have held steady, but our mandated fixed costs 
continue to rise. As a result of this great recession, our 
local government has trimmed all the fat we can find in our 
budget, but this year, we are going to cut deeper. The added 
cost of the Bay TMDL Program cannot be sustained in our budget.
    The end result is that Lynchburg and other localities are 
being forced to impose upon our citizens and our businesses a 
stormwater fee to meet these demands. Should the $70 million 
wastewater treatment plant upgrade be necessary, we will have 
to increase our sewer rates which are already among the highest 
in the state. This will hit our water dependent manufacturers 
hard, as will the proposed stormwater fees which correlate to 
manufacturer's significant impervious area. This will encourage 
sprawl in areas where a fee has not been imposed and where 
sewer rates are lower. Business will be incented to move 
further into counties, and tax bases will be lost in population 
centers. This will have an overall negative impact to water 
quality.
    If this program is the model for the EPA's future 
regulations of TMDLs across the county, we will witness the 
hardships I described spread to the entire country. What 
happens when the Mississippi River or the San Francisco Bay are 
subjected to these standards? In effect, the settlement between 
the Chesapeake Bay Foundation and the EPA is dictating the 
future TMDL regulations across our country.
    Regulatory agencies need to consider the funding 
implications of their regulations on municipalities and not 
continue to just assume that the cities or states can get their 
funds for whatever they deem to regulate. A citizen of 
Lynchburg recently sent me an e-mail that said, ``I did not ask 
for the changes, nor did I get to vote on acceptance of the 
stormwater changes placed on the City of Lynchburg. I 
understand that there could be penalties for noncompliance with 
the new stormwater regulations; nonetheless, I do not want to 
increase my payments from my fixed income to my city to comply 
with regulations that I didn't have the opportunity to vote 
on.''
    As our elected representatives, I respectfully urge you to 
consider the imposed hardships that these regulations place on 
our constituents and debate the policy based on its costs and 
benefits.
    In summary, I am a strong supporter of a healthy Bay. The 
Chesapeake Bay and the James River on which I grew up are part 
my heritage as a Virginian. The Bay is both a natural and 
strategic asset of our country. Cleaning up the Bay is the 
correct action to take; however, the science must be proven, 
the timeframe realistic, and it cannot be such a sudden 
financial impact to our citizens and our businesses.
    Thank you, Mr. Chairman. I will await any questions you may 
have.
    [The prepared statement of Mr. Perrow follows:]

Prepared Statement Hon. Edgar J.T. Perrow, Jr., Ward IV Representative, 
                 Lynchburg City Council, Lynchburg, VA

    Good morning Mr. Chairman and Members of the Committee,

    My name is Turner Perrow, and I am a member of Lynchburg City 
Council. In addition to being on council, I am a licensed professional 
engineer in the Commonwealth of Virginia. Therefore, I understand both 
the engineering and the fiscal impacts of the Chesapeake Bay Total 
Maximum Daily Load (TMDL) Final Report developed by the EPA.
    I am very concerned about what our locality, and others, are being 
compelled to do. It is estimated that the cost to Virginia communities 
alone is over $10 billion. The schedule for the implementation of these 
new TMDL regulations is arbitrary; no other TMDLs that we are aware of 
have a fixed schedule, or are required to have a fixed schedule by the 
Clean Water Act. Instead of establishing a realistic schedule based on 
the ability to implement, the schedule is being driven purely by the 
EPA's voluntary settlement of a lawsuit with the Chesapeake Bay 
Foundation and others.
    As a member of Virginia's Phase II Watershed Implementation Plan 
Stakeholder's Advisory Group, we were told that the model, the 
theoretical mathematical program used to predict pollutant loading, is 
seriously flawed. On a macro scale, it is thought to be fairly accurate 
in its ability to establish the overall loading reductions needed for 
the Bay to meet Water Quality Standards. However, on a smaller scale 
there are significant and validated concerns. In the recent 5.3.2 model 
release, Lynchburg's load reduction goals have significantly increased 
compared to the prior model version, while another community downstream 
in the same river basin is shown to be able to increase its sediment 
loadings by 350%. This obviously does not make sense, which calls into 
question the overall validity of the model and creates significant 
challenges for local governments to be able to plan and defend 
investments needed to clean up the Bay. In October, the EPA basically 
acknowledged in correspondence with the Bay states that the model does 
not work at local scale. We are also pleased that EPA has recently 
issued a memorandum offering flexibility for localities nationwide to 
prioritize various Clean Water Act actions, although it is difficult to 
see how this flexibility would apply in the Chesapeake Bay watershed 
states given the magnitude and schedule of EPA's Chesapeake Bay TMDL 
requirements.
    The additional cost to be incurred due to the Bay TMDL Report 
potentially includes a $70M wastewater treatment plant upgrade and an 
estimated $110M capital investment in stormwater infrastructure. 
Annually reoccurring costs of $12M are to be expected--a 4% increase of 
our City's expenses, approximately $140 annually per household. Since 
FY 2010, we have cut our budget by 11% and expect another 2% cut this 
year. Our revenues have held steady, but our mandated fixed cost 
continue to rise. As a result of this great recession our local 
government has trimmed all the fat we can find in our budget, but this 
year, we'll cut deeper. The added cost of the Bay TMDL Program cannot 
be sustained in our budget.
    The end result is that Lynchburg and other localities are being 
forced to impose upon our citizens and our businesses a stormwater fee 
to meet these demands. Should the $70M WWTP upgrade be necessary we 
will have to increase our sewer rates which are already among the 
highest in the state. This will hit our water dependent manufacturers 
hard, as will the proposed storm water fees which correlate to 
manufacturer's significant impervious area. This will encourage sprawl 
to areas where a fee has not been imposed and where sewer rates are 
lower. Business will be incented to move farther into counties, and tax 
basis will be lost in population centers. This will have an overall 
negative impact to water quality.
    If this program is the model for the EPA's future regulations of 
TMDLs across the county, we will witness the hardships I described 
spread to the entire country. What happens when the Mississippi River 
or the San Francisco Bay are subjected to these standards? In effect, 
the settlement between the Chesapeake Bay Foundation and EPA is 
dictating the future TMDL regulations across our country. Regulatory 
agencies need to consider the funding implications of their regulations 
on municipalities and not just assume that the cities or states can get 
the funds for whatever they deem to regulate. A citizen of Lynchburg 
recently sent me an e-mail that said, ``I didn't ask for the changes 
nor did I get to vote on acceptance of the storm water changes placed 
on the City of Lynchburg. I understand that there could be penalties 
for non-compliance with the new storm water regulations; nonetheless, I 
don't want to increase my payments from my fixed income to the City to 
comply with regulations that I didn't have the opportunity to vote 
on.'' As our elected representatives, I respectfully urge you to 
consider the imposed hardships that these regulations place on our 
constituents and debate the policy based on its costs and benefits.
    In summary, I am a strong supporter of a healthy Bay. The 
Chesapeake Bay and the James River, on which I grew up, are part my 
heritage as a Virginian. The Bay is both a natural and strategic asset 
of our country. Cleaning up the Bay is the correct action to take, 
however, the science must be proven, the timeframe realistic, and it 
cannot be such a sudden financial impact to our citizens and our 
businesses.
    Thank you.

    The Chairman. Thank you, Councilman. I appreciate all the 
testimony of all the witnesses on the second panel.
    I want to start out my first questions for Secretary 
Krancer. Secretary Krancer, are you aware of what the potential 
cost of implementing the TMDL will be on Pennsylvania?
    Mr. Krancer. I can't give you an exact number--billions. I 
think I heard Virginia was $7 billion. Regretfully, as pointed 
out earlier, there has been no cost-benefit analysis and even 
if there is one from EPA, which is supposed to come out when? I 
think I heard next year after the WIPs are submitted, which is 
again cart before the horse. We would like to look at the cost-
benefit analysis that EPA does produce. I have seen substantial 
debate about similar cost-benefit analyses that EPA has 
produced with respect to its air regulations.
    The Chairman. And I am assuming in a good year, billions of 
dollars would be fairly crushing on the state budget. And 
living in the Keystone State, I think Pennsylvania is like most 
states today, difficult economic times.
    Mr. Krancer. No question about it. Our governor, Governor 
Corbett, just closed a $4.2 billion budget deficit that was 
left for him in his first year. So correct, the economy is not 
where we would like it to be, although in Pennsylvania with the 
help of our newly discovered gas industry, we are going to be 
doing better, but we need to do much better obviously.
    The Chairman. Thank you.
    Chairman Brubaker, first of all, in your testimony you had 
identified I thought some--I had them marked here but I am not 
finding it right now--four different aspects, innovation and 
the other three, which I thought really were spot on in terms 
of looking at addressing this. I wanted to address one of 
those. And you had mentioned in your testimony as well about 
the importance of numerical goals and my question is: given 
some of the testimony we have heard and the discrepancy of some 
specific communities in terms of variance with the current TMDL 
model impacting those local communities, are you confident 
given these reported discrepancies that the numerical goals, 
the TMDLs that the EPA is putting out there at this point in 
time are 100 percent accurate?
    Mr. Brubaker. I can't speak to the level of accuracy. I 
certainly, as the last witness concluded his testimony, am a 
believer as I believe that we all want a clean Bay. The 
question is, how do we best get there? And those points that 
you referred to, first was promoting innovation, second was 
coordinating energy and conservation programs, third was 
supporting both cost-share and technical assistance, and fourth 
is acknowledging states' specific programs and regulatory 
issues.
    So I do have concerns about how we are going to find the 
dollars necessary. I believe some of the achievements that we 
can make in the future are very much focused on innovation, so 
we need to signal to the research and development communities 
of this nation and the world that we are serious about bringing 
new innovation into the Chesapeake Bay to help us reduce the 
nitrogen and phosphorous and sediment.
    The Chairman. And I do think all those things are 
important, but I mean I can't help--I came out of healthcare 
for 28 years. You don't jump to surgery before you have an 
accurate diagnosis, and the TMDL model has some real accuracy 
issues on a local level. I think that is just step one--or it 
is not step one because we have been doing this for 30 years. 
It is the next step. Let us make sure that model is accurate.
    Mr. Shaffer, the EPA is facing some serious credibility 
issues with inconsistencies in their modeling and decisions 
continue using assumptions when readily available data exist. 
What are your thoughts on ways that we could rebuild their 
credibility in this process? Because in the end we do want a 
clean Bay. There is no one in here that doesn't want a cleaner 
Bay.
    Mr. Shaffer. I think all of agriculture, especially across 
Pennsylvania where I can speak for it, has proven that time and 
time again that they want clean water going down to the Bay. 
They want clean water for their families. And they have proven 
that by all that we have accomplished voluntarily. And I want 
to repeat that--voluntarily without any EPA mandates. What we 
have accomplished so far and what we will continue to do, 
farmers are great stewards of their land and they really have a 
great pride in the job they are doing with conservation 
practices. I think what is very important, how we are able to 
accomplish this and one of the things the Senator just said, as 
technology develops, we adopt it, we utilize it, we are able to 
put it on the farm, put it on the ground to improve. And that 
is the way we have this curve going in the right direction and 
we will continue to do so.
    The Chairman. Thank you. And my final question this round, 
Mr. Perrow, you touched on the fact that EPA suggested that 
this model and regulations of TMDLs would hopefully be used 
across the country. I think that is an accurate portrayal. I 
think this is why it should be important to every Member of 
Congress. This is coming to a watershed near you in the future 
and really the Chesapeake Bay is being used as a pilot. Do you 
think that these standards are even attainable at this point?
    Mr. Perrow. Thank you, Mr. Chairman.
    The standards are attainable over time but the schedule 
that is set, we can't meet the schedule. Earlier, as the 
Administrator discussed, the EPA was trying to fine tune the 
model. However, they are going to wait another year for that 
and it won't be until 2017 until they revise it. Meanwhile, at 
the local level, we have to implement these changes right away. 
So we are making decisions, City Council, to set up a 
stormwater utility and to implement these programs and fees 
right now. So we can't wait for this.
    Yes, it is attainable with time and with practical, proven 
results, but not on the schedule that has been set.
    The Chairman. So I mean my perception--and I want to see if 
you agree with this--TMDLs where they serve as a vision and a 
roadmap seem like they are pretty positive. They take us in the 
right direction. But I don't think that is what my impression 
what the EPA is doing with this. It is more being used as 
punitive regulations at this point.
    Despite the fact that I know the Administrator didn't call 
them a regulation, I know one when I see one. Maybe it is not 
termed that but----
    Mr. Perrow. Yes, sir, I agree with your assessment. 
Initially, the schedule is developed by what were the goals to 
meet the Chesapeake Bay cleanup, just the goals to what 
localities and the watershed was supposed to do. However, in 
the settlement, it is my understanding that those goals became 
the hard deadline. And whereas we are striving to meet those 
goals, we are worried about actions being taken by the EPA such 
as not renewing our wastewater treatment plant discharge permit 
or MS4 permit, which come up for renewal here shortly. So that 
is the mechanism by which they can enforce implementing these 
arbitrary goals immediately, and that is what we are very 
concerned about.
    The Chairman. Thank you.
    And I now recognize the Ranking Member for questioning.
    Mr. Holden. Thank you, Mr. Chairman.
    I apologize to you and to our witnesses. Ranking Member 
Peterson called a meeting of the Minority Members so I had to 
attend that and that is why I am by myself on this side.
    But getting back to the onsite farm inspections. Secretary 
Krancer and Mr. Shaffer, do you believe that the EPA has 
authority under the Clean Water Act, Section 308?
    Mr. Krancer. Well, Representative, I promised I would stop 
practicing law after I got to this position in which now I have 
lawyers, although it is a promise I break virtually daily if 
not repeatedly during the day. They seem to think they have 
that authority. Quite honestly, they seem to think recently 
since I have been in office that they have a lot of authority 
to do a lot of things. We are not sure in Pennsylvania where 
that stops yet but we are working on it.
    Mr. Holden. Mr. Shaffer, do you care to comment?
    Mr. Shaffer. It is our read on the Clean Water Act they 
absolutely do not have the authority to come on farms for 
enforcement actions, and we have several high-level comments on 
that that we feel we are absolutely right on that.
    One of the most concerning things is in talking to the 
Pennsylvania Department of Agriculture, EPA has requested for 
GPS coordinates for every dairy farm in the Chesapeake Bay 
watershed. Now, I am sure they don't want to add those people 
to their Christmas card list, and so they have a plan of 
enforcement, and they are just going to keep pulling forward 
until they are stopped.
    Mr. Holden. Secretary Krancer, you and the Administrator 
had different observations of the relationship between the 
Commonwealth and EPA as we move forward in this process, and 
you referenced an October letter and he said we will have to 
wait and see. Can you elaborate on the October letter, what was 
expressed?
    Mr. Krancer. Right, the October 5 letter--and that was a 
topic of some of Administrator Garvin's testimony--talked about 
how the EPA now, somewhat suddenly, views the model--at least 
what they are saying they view the model. They are not viewing 
it anymore as local as they had before. And quite honestly, it 
had been months--I think I mentioned this--that we had been 
trying to pound on EPA, get the message to EPA. We went to the 
public, to the press both here and--or I should say in 
Pennsylvania and in Virginia, and virtually within a week after 
the media attention--because I guess you can't hide forever--
and I would also add the Congressional oversight. I think the 
Congressional oversight, the questions you all have been asking 
for months, the questions we have been asking for months, as I 
said in my testimony, that persistence, that public attention 
might be worthwhile, but I am cautiously optimistic on that.
    As I say in my testimony, I am going to wait and see. We 
are all going to have to wait and see whether EPA is merely 
placating or whether they are serious or whether they are just 
trying to do what we used to call in the ACC basketball area 
some four corners.
    Mr. Holden. Thank you, Mr. Secretary.
    Mr. Shaffer, I know you have to be careful how much you can 
say about the litigation, but could you tell us as much as you 
possibly can? You know, what drove you to go that far? That is 
a pretty extreme step that is going to cost your organization a 
lot of money. Can you tell us as much as you can?
    Mr. Shaffer. Let me first just say, Congressman, one reason 
why we did do it that is not valid. We didn't do it to shirk 
any responsibility of being good stewards of the land. So let 
me make that very clear. We are going to continue working to 
clean up the waters of Pennsylvania.
    The reason we felt we had no other choice is because we 
feel EPA is just basically violating the Clean Water Act, that 
they don't have the authority to do what they are doing, and 
unfortunately, this is the only way of dealing with it. And we 
feel very strongly about it and where we are at right now, we 
are on a timeline. We have entered a motion to complete the 
record, and in doing so, we feel we don't have all the 
information and documents we need from EPA to move forward. So 
there is a delay in the summary judgment briefing right now 
until that decision is made on our motion to complete the 
record.
    But that is where we are at right now, but like I said, I 
want to once again reiterate it has nothing to do with our 
responsibility as good stewards of the land. We are going to 
continue to do that; we are going to continue to make the 
strides we have made and move forward in the future. But we 
feel that the violation of the Clean Water Act has major 
ramifications for all of us down the road.
    Mr. Holden. Thank you, Mr. Chairman.
    The Chairman. I thank the gentleman. Now, I recognize Mr. 
Goodlatte for questioning.
    Mr. Goodlatte. Well, thank you.
    And Mr. Shaffer, let me just add to what you just said in 
response to Congressman Holden. We agree with your position. In 
fact, the House of Representatives has voted to cut off the 
funding not for programs that help farmers comply with existing 
regulations, that keep cattle out of streams and so on, but 
simply to cut off the funding for the implementation of this--
as Secretary Krancer has called it--cart-before-the-horse 
effort on the part of the EPA. Unfortunately, so far the Senate 
hasn't gone along with our efforts, but we will continue to try 
to support your efforts in that regard.
    Councilman Perrow, again, welcome. I am very familiar with 
the situation in the City of Lynchburg and have, when possible, 
attempted to help the city comply with the combined sewer 
overflow problem that you have had. And for the past 17 years, 
the city has been making significant upgrades to its storm and 
wastewater system. In total, this investment will probably 
reach a half a billion dollars for a city of 75,000 people. In 
addition to this, you now have to make another $150 million, 
possibly more, upgrade mandated by the TMDL. Can you explain to 
the Committee what this means at a local level? As a 
councilmember, what kind of priorities are you having to 
balance for these costs? Unlike the Congress where we don't 
have a balanced budget amendment to the United States 
Constitution--which by the way both these gentlemen support--
the City of Lynchburg, like virtually every other city in the 
country, has to balance its budget. So what are you looking at 
when you are faced with $150 million add-on to what you are 
already spending here?
    Mr. Perrow. Thank you, Congressman. Our annual budget is 
$306 million and so just as an example, we are looking at a $12 
million reoccurring cost for stormwater alone. Our public bus 
service costs $7 million. That is nearly double what our public 
bus service costs.
    As I pointed out earlier, we already have some of the 
highest sewer rates in the state. The CSO program is driven out 
of sewer fees under a consent order. We have to balance the 
household median income with the sewer rates and set our sewer 
rates that way and drive the program to completion. What has 
startled me in working on this program initially, this CSO 
program was initially budgeted to be a $200 million program, 
and now we are 75 percent finished with it and it is still a 
$200 million program and the total cost, as the Congressman 
said, are expected to be half a billion. I see the exact same 
problem potentially arising out of these stormwater 
infrastructure that would have to go in place as part of the 
TMDL report.
    Now, another item in--excuse me if I am getting too 
technical--it makes me scratch my head because maybe we, 
instead of separating the sewers like we were directed to do 
several years ago, we should have all left and combined and 
treated the whole thing. It is very frustrating to me from a 
local standpoint that it almost seems like we are going back 
and having to rework a system that we thought we had fixed due 
to the changing regulations. This is a significant impact to 
our business and to our taxpayers in the City of Lynchburg. We 
are getting a significant amount of pushback from our 
constituents who just don't understand exactly why they need to 
pay these increased fees and what good the fees are doing. So 
it is very troubling for our city, sir.
    Mr. Goodlatte. Thank you. In fact, because of those fees 
that you are already mandated to gather and because of the 
prospect of what you are facing here, you say that this has 
particularly hurt some businesses. Is the city concerned about 
the ability to attract new businesses to the city when some of 
the localities near Lynchburg may not be in the Bay watershed 
and don't have to live under the mandates of the TMDL?
    Mr. Perrow. Yes, Congressman. As you are aware, Lynchburg 
is an independent city, which makes us in the Commonwealth of 
Virginia a little bit different. But we have to impose these 
regulations based on the density of the City of Lynchburg, yet 
a potential business could move a foot over the property line 
and not be subjected to the same regulations that we are. We 
are concerned about this because our primary driver in our 
budget is on real estate taxes. And if more businesses or more 
residents attempt to escape the fees and move outside the 
city's limits, we are going to lose tax base. And if we lose 
tax base, we lose the ability to offer the services that we 
normally provide to our constituents and we become a failing 
city. And that is something we cannot allow to happen. So yes, 
sir, we are very concerned about the impact to our businesses 
and the ability to attract and recruit new businesses to the 
area.
    Mr. Goodlatte. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. I thank the gentleman.
    Just to follow up with a few more questions.
    Secretarty Krancer, I have heard in testimony, both written 
and verbal, identifying the need for more technical assistance. 
In fact, a term I use frequently and I read it somewhere within 
the testimony--I don't know who to give a credit to; I will 
have to go back and look--but I was pleased to see that term in 
your boots on the ground. And I wanted to see in your testimony 
you address what DEP has done to provide training to many 
different target audiences, to have qualified technical 
assistance out there to help folks to deal with these issues. 
Can you expand on that a little bit of what DEP is doing?
    Mr. Krancer. Well, sure. We work in partnership with our 
Department of Agriculture and, quite honestly, our stakeholder 
community, our ag community, municipality community, all the 
other communities that are involved in this. And you have 
really given me a good opportunity here to tell you and tell 
the entire Congress what a great job our agricultural community 
in Pennsylvania has done already over the past 10, 20 years, 
the great job our municipality community has done, our 
developer community has done.
    We have done in Pennsylvania a ton of heavy lifting with 
respect to the Bay over the past 5, 6, 10 years, and we are 
going to continue to do all that. And we work very hard at 
stakeholder outreach, at technical assistance outreach with 
whatever resources we can garner. Obviously, now those 
resources are somewhat not as available as they had been in the 
past, but I don't want it to be ever said about Pennsylvania 
that Pennsylvania is not already doing a tremendous job. And 
that is part of the bone I had to pick with EPA is that we have 
done all these things over the past few years and gotten little 
credit for it just because of the mathematical construct they 
are using. So in some cases we are having to start all over 
again even though we have done a ton already. So I hope that 
answers your question.
    The Chairman. Thank you.
    Chairman Brubaker, thank you for your service to Chesapeake 
Bay, but obviously I also want to thank you for your service to 
the Commonwealth of Pennsylvania and the Pennsylvania Senate. 
It is great to have you there with the work that you do.
    I think this really gives you a unique perspective process. 
You know, assuming that the estimates that have been put forth 
that pegged the cleanup for some of the states at more than $10 
billion, given your leadership within the state legislature, if 
you get a bill for $10 billion, what are your thoughts? What 
does that mean to the Commonwealth of Pennsylvania?
    Mr. Brubaker. Well, thank you, Mr. Chairman. You referred 
to the boots on the ground comment. That was in the Chesapeake 
Bay Commission's testimony that you received because we as a 
commission do believe in technical assistance.
    The Chairman. Right.
    Mr. Brubaker. And I share Secretary Krancer and President 
Shaffer's comments about what Pennsylvania farmers have done 
over the last 20, 30, 40 years. I share pride with each of 
these gentlemen in what Pennsylvania farmers have indeed 
accomplished. Specifically on technical assistance also, the 
Chesapeake Bay Commission believes a significant part of 
technical assistance can go to the existing, unquestioned 
regulatory compliance. As has been testified by a number of 
people here prior, our farmers, our businesses in the 
Commonwealth of Pennsylvania and the entire Chesapeake Bay 
watershed want to comply. And our entire business community and 
farm community is not in total compliance with every piece of 
existing unquestioned regulatory state and/or Federal 
regulatory issue. So at the Commission, we are attempting to 
not get down in the weeds on TMDL versus tributary strategy, 
but we certainly support aggressive technical assistance 
working in partnership.
    And another thing we have in Pennsylvania that makes a 
significant difference as a very, very cost-effective partner 
is the Conservation Districts. So we don't have the money 
inside of our state budget. We do not have a reserve to pay 
that bill, so therefore, we believe in partnerships, technical 
assistance, and innovation.
    The Chairman. And you are talking about cost-effective 
approaches, but if the Commonwealth of Pennsylvania is faced 
with a $10 billion bill and that mandate materializes, that is 
what occurs, what would have to happen in Pennsylvania to be 
able to pay that bill, to fund those mandated initiatives?
    Mr. Brubaker. The General Assembly a few years ago put on a 
referendum, a ballot, an H2O Initiative, ask our taxpayers if 
they wanted us to do some bonding to secure some additional 
dollars to put into our local communities like the local 
community that has been testifying here. So when a local 
community gets a mandate the sewer water plant needs to be 
upgraded, many times the only way that they have to pay for 
that is to distribute that among their users. They are not able 
to do that. So we put it on a referendum and it passed 
overwhelmingly that our taxpayers at that time, a few years 
ago, wanted to have a few hundred million dollars to send to 
our local communities to help them with some of these 
regulatory mandates that they were facing.
    The Chairman. And I always appreciate that kind of giving 
the citizens that voice and that choice. Unfortunately, EPA 
TMDLs are not giving anyone a choice. I don't think that would 
be an option because if a mandate comes, it is going to have to 
be paid.
    Mr. Shaffer, there are a lot of--and I don't want to get 
too deep into the lawsuit--but a lot of press releases from 
other associations and environmental groups saying that the 
Farm Bureau filed a suit against EPA to stop water quality 
improvements, and it was all about giving farmers a free pass. 
Just wanted to get your response to that accusation.
    Mr. Shaffer. That definitely raises the hair on the back of 
my neck when I hear that because it is the furthest thing from 
the truth. I think once again the farmers in Pennsylvania, 
probably throughout the watershed, have proved this isn't the 
case by all the things they voluntarily already have done, 
spent millions of dollars on new technology, adapted it, put it 
on the farms without EPA's foot on their head to make them do 
it. They have done it voluntarily.
    I think what you have heard today goes back to what the 
lawsuit is really about. When I say they violated the Clean 
Water Act, the Clean Water Act provides that the states should 
take care of the waters in their state, and they are the best 
ones to do that. When there is a goal of conservation, an 
environmental problem to fix, we work with our state agencies 
to devise the best way to go about fixing that because every 
state, the type of agriculture is different, the topography is 
different. So one-size-fits-all solution is definitely not the 
answer. I can say that is one of the reasons for the lawsuit is 
to make sure that we continue doing the work we have done 
within the state and devise a solution to any problem that 
arises.
    The Chairman. Well, I want to thank the panel for coming, 
for testifying, for bringing your experience from many varied 
perspectives on these very important issues.
    Before we adjourn, I want to invite the Ranking Member to 
make any closing remarks he has.
    Mr. Holden. I want to thank our witnesses for being here 
today, and thank you for having the hearing, Mr. Chairman.
    The Chairman. All right. I thank the Ranking Member. I 
thank all Members for participating.
    You know, we know there is a problem. You know, this is a 
long-standing problem. The quality of the water in the 
Chesapeake Bay, this is an initiative that is not new. It has 
been going on for 30 years, and we have made great progress and 
from all aspects. But I certainly have questions. I still have 
questions even coming out of this second hearing. I have 
questions about a model that is flawed at the local level. You 
know, I take the EPA's opinion that certainly at a river basin 
level it works, but frankly, we institute these costly mandates 
on local communities, on local farmers, you have to get a good 
diagnosis before you decide which part of the body to operate 
on. And they haven't done that yet. I think that they are 
showing some will to look at it, but they are still moving 
ahead with these timelines. That is my other concern. They are 
rushing a timeline and a fixed schedule here.
    And finally, it is a matter of jurisdiction. Whether it is 
regulation or not regulation, I happen to think they are 
regulations. It looks like, smells like, tastes like 
regulations, I think it is--from the EPA versus a state 
responsibility. I mean we have in the short time I have been in 
Congress--this is just about the end of my third year--I see a 
lot of blurring of the lines of who is responsible for what. 
And this is maybe one of the most glaring missteps. The states 
took it upon themselves to come together and work together, to 
pool their resources with this commission.
    And so those are just some of the questions I certainly 
have. But I want to thank everybody for coming today. I know we 
are going to continue to provide oversight on this, and I 
suspect we will have a future hearing or two as well, 
especially after the EPA provides us those--it looks like next 
spring they promised a cost-benefit analysis, and it would be a 
good opportunity to be able to walk through that within a week 
or so after that is published and we receive it.
    And so under the rules of the Committee, the record for 
today's hearing will remain open for 10 calendar days to 
receive additional material and supplementary written responses 
from witnesses to any questions posed by a Member.
    This hearing of the Subcommittee on Conservation, Energy, 
and Forestry is adjourned.
    [Whereupon, at 11:54 a.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

 Letter Submitted by Hon. Glenn Thompson, a Representative in Congress 
                           from Pennsylvania
September 28, 2011

Hon. Shawn M. Garvin,
Regional Administrator,
U.S. Environmental Protection Agency,
Philadelphia, PA

    Dear Mr. Garvin:

    The purpose of this letter is to follow-up on our discussions 
concerning the reduced accuracy of the Phase 5.3.2 Watershed Model. 
Virginia's concerns echo those you received last July from the 
Commonwealth of Pennsylvania.
    Virginia remains committed to do our share of the watershed wide 
effort to restore the Chesapeake Bay. We will continue to implement 
practices that reduce nutrient and sediment pollution as outlined in 
the Virginia Watershed Implementation Plan and will dedicated millions 
of dollars to the effort this year. Unfortunately, as explained below, 
we have discovered that the model contains inexplicable inaccuracies 
that must be corrected. The current watershed model is undermining the 
credibility of our collective efforts. Virginia proposes several 
adjustments to the current process so the clean-up efforts can stay on 
track and continue moving forward.
    Virginia has significant concerns with several aspects of the Phase 
5.3.2 Watershed Model. As explained in our presentation to you on 
September 16th (see attached), the most notable problem exists with the 
lack of adequate nutrient reduction credit applied to nutrient 
management plans. This is a problem not only in Virginia but covers 
numerous counties across the entire Bay watershed as illustrated on 
slide 4 in the presentation. This serious shortcoming alone renders one 
of our most effective and commonly used BMPs useless in meeting 
nutrient reduction goals.
    We have found that the model, as currently constructed, is not 
appropriate for use in assigning loads in permits, developing local 
load targets, or measuring reduction progress. It is especially not 
appropriate for imposing any consequences. Attempting to use the model 
in these ways negatively impacts our planning for the Phase II WIP, 
along with the credibility of the EPA, and of most concern, exposes 
Virginia to potential litigation. We ask for your help to resolve these 
matters through what we believe are reasonable steps.
    We are aware that modeling of a watershed as large and complex as 
the Chesapeake Bay is a monumental task. The current model may be an 
adequate tool for predicting overall pollution loadings on a watershed 
basis. However, as we demonstrated in our discussion and presentation 
on September 16th, and the Maryland presentation sent by Jim Edwards on 
September 12, when used on a local government level outrageous 
anomalies occur in the model that are inconsistent with current 
scientific knowledge.
    As a consequence of these discussions, we have developed the 
attached ``Path Forward'' document that outlines needed changes and 
adjusts the schedule. A commitment from EPA to correct these concerns 
is needed as a precursor to continued Phase II WIP planning efforts.
    It is clear that the model, as currently constructed, is not 
capable of producing meaningful, realistic loading targets for use at 
the local level and that our time is better spent working with local 
governments on implementation of the suite of practices described in 
our Phase I WIP or equivalent measures. Our modified approach to meet 
our commitments for Phase II and the 2012-2013 Milestones is also 
described in the attached ``Path Forward'' document.
    Virginia is ready to move forward with the Phase II planning 
process and development of milestones. However, recognition from EPA of 
the current problems and limitations of the model, along with a 
commitment to work together to address them will be key to our success.
    I look forward to further discussions on our proposed path forward.
            Sincerely,

            
            
Doug Domenech.

CC:

Jeff Corbin, Senior Advisor to the Administrator for Chesapeake Bay and 
    Anacostia River;
Jim Edwards, Deputy Director, Chesapeake Bay Program.

                              ATTACHMENT 1

Path Forward
Proposed Approach for Phase II WIP Development
9/21/11
    Three-Track Approach to Implement Phase I WIPs and develop Phase II 
WIPs

    Overview:

   The Chesapeake Bay jurisdictions have expressed serious 
        concerns about using 5.3.2 watershed model output for 
        localities nutrient and sediment reduction targets under the 
        framework ofthe Chesapeake Bay TMDL and the approved Phase I 
        Watershed Implementation Plans (WIP).

   While useful as a planning and evaluation tool at the 
        watershed scale, the model was not constructed for use at the 
        local scale and its output raises serious questions and 
        concerns among state agencies and our local partners.

   Anomalies present in the output are difficult to explain and 
        in many ways do not represent the ``real world'' of local 
        watershed management and water quality planning and 
        implementation.

   In order to ensure that these identified issues do not 
        divert attention from the more important task of implementation 
        of the Phase I WIPs and meeting associated TMDL targets, the 
        following approach is proposed that would result in model 
        revisions and ongoing implementation using Phase I WIP 
        practices as the basis for the Phase II WIPs.

    The following tracks are proposed to take place simultaneously:

    Track 1

    EPA continues to work on correcting identified model issues so that 
it can be used with greater confidence in setting local (sub-segment 
shed) target loads for N, P and S. The following steps are recommended:

   Holistic review of the following issues:

     How to model Agricultural Nutrient Management 
            (efficiency or Land Use Change)

     Calculation of nutrient rates on acres not under 
            nutrient management

     Load reductions associated with application of 
            nutrient management plans

     Changes in manure routing preferences through time

     Amount and nutrient content of poultry manure

     Biosolids application (include all states or exclude 
            all states)

     Regional factors due to Phase 5.3.2. Watershed Model 
            calibration

     Submitted versus credited BMPs

     BMP stacking (Urban and Continuous No-till)

   Modify Scenario Builder code

   Test Model to determine if modifications produce expected 
        results

   Re-calibrate watershed model

   Run scenarios

   Review outputs to evaluate other concerns and check for 
        unintended consequences

   Upon agreement by EPA and the jurisdictions, use refined 
        model to establish loading targets at the local level.

    Track 2

    States develop Phase II WIPs based upon the existing practices 
identified in the Phase I WIP/TMDL input deck and submit these interim 
plans to EPA by June 1, 2012. These plans will focus on achieving the 
2017 goals.

   Continue current local engagement efforts to collect 
        improved land use, BMP implementation and local implementation 
        strategies as the Phase II WIP is developed. Local engagement 
        efforts will shift focus from meeting local target loads to 
        maintaining implementation levels consistent with the Phase I 
        WIPs.

   The Phase II WIP would provide a mix of BMPs at the segment-
        shed level.

   States refine the interim BMP targets once the model is 
        deemed sufficient to assign target loads and corresponding 
        levels of BMP implementation needed at the local level as part 
        of the next milestone cycle or the Phase Ill WIP development.

    Track 3

    States develop 2012-2013 Milestone implementation actions and 
strategies and submit these plans to EPA in accordance with the current 
schedule.
                              attachment 2






































































                                 ______
                                 
                Supplementary Material Submitted by EPA

    During the November 3 hearing entitled, Hearing To Review the 
Chesapeake Bay TMDL, Agricultural Conservation Practices, and Their 
Implications on National WatershedsHearing To Review the Implementation 
of Phase II of the Chesapeake Bay TMDL Watershed Implementation Plans 
and Their Impacts on Rural Communities, requests for information were 
made to EPA. The following are their information submissions for the 
record.
Insert 1
          Mr. Owens. And finally, when you do your cost-benefit 
        analysis, are you taking into account the increase in cost to 
        the consumer for production of food in the ag community that 
        arises out of increased regulation?
          Mr. Garvin. I will have to get back to you on that, 
        Congressman. I am not sure all the factors that are going into 
        the analysis, but we can make that available to you and to the 
        chair and the Subcommittee.
          Mr. Owens. If it is not included, would the EPA consider 
        including that as a factor?
          Mr. Garvin. Well, I will go back and have a conversation and 
        figure out what is being included and what is not and we will 
        get back to you.

    EPA's TMDL cost study, is intended to assess the costs of pollution 
controls and associated administrative actions identified in the 
Chesapeake Bay jurisdictions' Watershed Implementation Plans (WIPs), 
with many of these actions being the same conservation practices that 
Bay region farmers have implemented over the years, often with 
financial assistance from state and Federal programs. Moreover, the 
TMDL includes provisions for innovative approaches, including nutrient 
credit offsets and trading, that provide economic opportunities for 
agricultural interests that adopt practices to reduce nutrient 
discharges to the Chesapeake Bay and its tributaries.
    There are a number of challenging complications to assessing any 
changes in the cost to the consumer that could be directly attributed 
to specific actions in the Bay including the interstate distribution of 
food, the percentage of food prices that can be attributed to changes 
in production practices, the broader impacts of the major influences on 
supply, demand, and price for food products in domestic and 
international markets among a wide range of additional factors.
    Separate from EPA's cost analysis; we understand there are other 
organizations examining the impacts of the Chesapeake Bay TMDL on food 
prices to consumers. EPA will stay abreast of their findings.
Insert 2
          Mr. Gibbs.--especially making a determination of non-point is 
        a lot more challenging as you know. And my experience in the 
        past, you have in different streams different flow rates, 
        weather conditions, rainfall that can impact it. And I know in 
        my area in the past years we had an issue with the EPA at one 
        time. They were doing what I call drive-by evaluations, 
        windshield drive-bys and weren't getting the right data. And so 
        I guess being an outsider of the Chesapeake, that is when I 
        would question and make sure that the monitoring process to 
        develop the model makes sense.
          And the second part of that, in my one watershed we had been 
        involved for about 10 years of a nutrient trading program----
          Mr. Garvin. Yes.
          Mr. Gibbs.--and how that has been so successful, they have 
        lowered the load into that watershed working with a cheese 
        manufacturer and working with those local farmers around there, 
        and it has been real successful and kept the jobs and the 
        economic growth. Are there any type programs like that going on 
        in this watershed?
          Mr. Garvin. Yes, Congressman. The TMDL actually had a 
        section, an appendix that dealt with a placeholder for trading. 
        A number of the states came in with their state strategies that 
        relied--in varying degrees on trading. What we have been doing 
        with the states currently is we have been meeting with them, 
        discussing what trading programs they do or they don't have, 
        getting a better sense of what they are. One of the issues is 
        making sure that when we are doing trading we are not double 
        counting, when we are doing trading that there is a common 
        exchange rate so that we are talking apples and apples when we 
        are looking at numbers. And so we have been working close with 
        the states on that, and I am hoping in the next couple of 
        weeks--and we will share this with the Subcommittee--that we 
        will be providing some feedback to the states on that review.

    EPA is working with each of the Bay jurisdictions on the 
development and implementation of effective trading and offset programs 
that meet the basic requirements described in Section 10 and Appendix S 
of the Bay TMDL. As a first step, EPA has undertaken a review of 
existing offset and trading programs. Program reviews included 
assessments of basic principles such as: trading ``baselines'' (i.e., 
what pollutant reductions are eligible to generate credits for offsets 
and trading); ``quantification'' methods (i.e., how much credit is 
generated by implementation of specific best management practices); and 
``certification/verification'' requirements (i.e., how the 
implementation and proper maintenance of best management practices are 
monitored to ensure that reductions being sold as offsets or credits 
are actually being achieved).
    As part of the review process, EPA and the jurisdictions have had a 
series of constructive meetings and calls at the end of 2011 and at the 
start of 2012. EPA intends to finalize trading program assessment 
reports for each jurisdiction by the end of March 2012. The 
observations in the assessment reports will inform the ongoing 
development of each jurisdiction's offset and trading program, a key 
component of the Phase II Watershed Implementation Plans.
                                 ______
                                 
                          Submitted Questions

Letter and Response from U.S. Environmental Protection Agency
October 28, 2011

Hon. Glenn Thompson,
Chairman,
Subcommittee on Conservation, Energy, and Forestry,
House Committee on Agriculture,
Washington, D.C.

    Dear Chairman Thompson:

    Enclosed are responses to questions for the record following the 
November 3, 2011 Subcommittee hearing to review the Implementation of 
Phase II of the Chesapeake Bay Total Maximum Daily Load (TMDL) 
Watershed Implementation Plans and their impacts on rural communities.
    If you have any further questions, please contact me, or your staff 
may contact Greg Spraul in my office at [Redacted].
            Sincerely,

            
            
Laura Vaught,
Deputy Associate Administrator for Congressional Affairs.
Questions Submitted By Hon. Glenn Thompson, a Representative in 
        Congress from Pennsylvania
    Question 1. When will the Cost-Benefit Analysis for the Chesapeake 
Bay TMDL be completed? Will EPA make any changes to the TMDL based on 
the results of the analysis?
    Answer. The EPA's Chesapeake Bay Program Office and National Center 
for Environmental Economics are scheduled to complete their initial 
analyses of costs and benefits by the end of 2012. More complete and 
final analysis is expected to be completed by the summer of 2013. The 
analysis will incorporate the final Phase II Watershed Implementation 
Plans (WIPs). The Chesapeake Bay TMDL establishes the amount of 
nutrients and sediment the Chesapeake Bay can receive and still meet 
state-established water quality standards. The cost-benefit analysis 
being conducted by the EPA will not change the TMDL's science-based 
assessment of the Bay's pollution capacity. However, when complete, the 
analysis will provide insights as to the costs and benefits of 
implementing practices to achieve the TMDL pollution allocations and 
will help inform continued implementation of the Bay TMDL by the EPA, 
states, and other partners.

    Question 2. Can you explain why EPA does not consider the 
Chesapeake Bay TMDL a regulation? What criteria do you use to evaluate 
what the agency considers a regulation?
    Answer. The Chesapeake Bay TMDL is not a regulation. TMDLs, 
including the Bay TMDLs, are not self-implementing or enforceable and 
do not by themselves require or prohibit any actions. A TMDL sets a 
pollutant reduction target or goal to be implemented through various 
other regulatory and non-regulatory programs as appropriate, including 
the National Pollutant Discharge Elimination System (NPDES) permit 
program.\1\
---------------------------------------------------------------------------
    \1\ Sierra Club v. Meiburg, 296 F.3d 1021, 1025 (11th Cir. 2002).
---------------------------------------------------------------------------
    Section 303(d) of the Clean Water Act (CWA) requires states and the 
District of Columbia to ``establish'' lists of impaired waters that 
fail to meet state-established water quality standards and to 
``establish'' TMDLs for those listed water bodies ``at a level 
necessary to implement the applicable water quality standards.'' In 
Section 303(d), Congress did not call TMDLs ``rules'' or 
``regulations'' or say that the states or the EPA must ``promulgate'' 
TMDLs through rulemaking (as Congress explicitly did for water quality 
standards in Section 303(c)(4) of the CWA).
    The EPA has adopted implementing regulations for Section 303(d) of 
the CWA that further describe the characteristics of, and the process 
to, establish a TMDL. See generally 40 CFR Part 130; 40 CFR 130.2 
(definition of a TMDL); 40 CFR 130.7 (process to establish TMDLs). 
Those implementing regulations also do not specify that TMDLs are to be 
established by either states or the EPA through rulemaking. Even though 
the Bay TMDL is not a ``rule,'' the EPA did provide opportunity for 
public input into its establishment.
Questions Submitted By Hon. Tim Holden, a Representative in Congress 
        from Pennsylvania
    Question 1. EPA keeps saying that the Chesapeake Bay TMDL has been 
a collaborative process, but the states are telling us that EPA has 
been very heavy-handed and top-down. These cartoons (Mr. Whiskers and 
Ball & Chain) were part of a presentations on the Chesapeake Bay TMDL 
that were given by Jeff Corbin in 2010, when he was your Chesapeake Bay 
advisor. Do you think that reflects an accurate representation of your 
relationship with the states?
    Answer. No, the cartoons do not represent the EPA's relationship 
with the states and they were not used to reflect that relationship. 
The EPA believes the states will produce effective Phase II WIPs to 
meet their TMDL targets to improve local waters and the Chesapeake Bay.

    Question 2. It is my understanding that West Virginia was the only 
Bay state to be considered deficient for the Phase I WIPs. What 
backstop measures did EPA implement in this state given this deficiency 
status?
    Answer. West Virginia was not the only state to have backstop 
measures in the final TMDL.
    The EPA established backstop allocations that assumed further 
limitations in pollution from significant wastewater treatment plants 
in New York because New York's Phase I WIP did not demonstrate 
sufficient pollutant reductions. The EPA established backstop 
adjustments to stormwater loads in Pennsylvania and agricultural loads 
in West Virginia because the Phase I WIPs did not demonstrate 
sufficient reasonable assurance that load reductions in these states 
and sectors would be achieved and maintained.
    Finally, the EPA identified the following states and sectors as 
requiring enhanced oversight:

   Pennsylvania agriculture and wastewater;

   Virginia stormwater; and

   West Virginia stormwater and wastewater.

    For West Virginia, the EPA applied a backstop adjustment to 
agriculture allocations because the Final Phase I WIP lacked:

   Detailed strategies for how the state was going to ramp up 
        voluntary, incentive-based conservation to levels necessary to 
        meet TMDL allocations.

   Strong contingency plans such as new policies, programs, or 
        mandates in the event that voluntary approaches are not 
        sufficient to meet reduction goals.

    The EPA is in the process of reviewing West Virginia's 
demonstration of near-term progress implementing the agricultural 
section of its WIP, including Concentrated Animal Feeding Operation 
(CAFO) Program authorization and permit applications and issuance. 
Based on review of West Virginia's Phase II WIP submittal, the EPA will 
assess whether this backstop adjustment for agriculture can be removed 
or reduced.

    Question 3. What specifically have you been doing to increase your 
dialogue and better communicate with the agriculture community?
    Answer. The EPA conducted an extensive outreach campaign throughout 
the development of the TMDL, including outreach to the agriculture 
community (see Attachment 1). The EPA consulted with the agricultural 
community through three primary forums: (1) stakeholder meetings on 
TMDL development during the fall of 2009 through fall of 2010; (2) 
formal and informal discussions with each jurisdiction's department of 
agriculture during WIP development; and (3) discussions with 
agricultural groups on the TMDL and modeling efforts through industry-
specific meetings and Chesapeake Bay Program Agriculture Workgroup 
discussions.
    For Phase II WIP development, we have participated in all meetings 
where states have requested our presence. For example, Pennsylvania 
recently completed eight county workshops. The EPA, and/or University 
of Maryland staff employed at the Chesapeake Bay Program, were present 
at every workshop at the state's request. Also at the request of the 
states and the Chesapeake Bay Commission, the EPA held five Scenario 
Builder workshops and nine trainings for the Chesapeake Assessment and 
Scenario Tool (CAST) between August and October 2011 in order to help 
the states and stakeholders better understand and use the Chesapeake 
Bay Program modeling tools. As noted in the next question, the EPA also 
has been involved in a number of discussions, along with USDA, state 
officials, and agriculture stakeholders to explore the option of state 
agricultural certainty programs.
    Last summer, EPA Administrator Lisa Jackson, other senior EPA 
staff, and I spent a day in Lancaster County, Pennsylvania where we 
toured a dairy farm and participated in a roundtable discussion with 
members of the agriculture community. We met with local farmers and saw 
the innovative practices being implemented by the agriculture community 
benefiting both farm operations and local water quality. These kinds of 
interactions are very useful and we will continue to rely upon them as 
a key way of hearing from the agriculture community.
    In addition, as discussed below in response to Question 6, the EPA 
and USDA have been collaborating for well over a decade on agriculture 
issues and are continuing to collaborate on our respective modeling 
efforts.

    Question 4. In your testimony you mention the development of 
agricultural certainty programs and this is a concept that we have been 
exploring as an option for producers as well. How do you envision an 
agriculture certainty program working? What do you see as the Federal 
role in the development of this type of program?
    Answer. The EPA has been involved in a number of discussions, along 
with USDA, state officials, and agriculture stakeholders to explore the 
option of state agricultural certainty programs. In December 2010, the 
EPA and USDA sent a joint letter to the state agriculture secretaries 
and environment secretaries to confirm interest and communicate agency 
support for developing state certainty programs (see Attachment 2). 
Most recently on October 6, EPA senior officials joined more than 40 
representatives from USDA and the Chesapeake Bay watershed states to 
discuss key elements and principles of an agriculture certainty program 
in the Chesapeake Bay region. A follow up meeting with agriculture and 
environmental groups was held November 7.
    We believe that such certainty programs are best carried out by the 
states and we have offered our support to states in the Bay region and 
other parts of the country as they think through the development of 
these programs. Although Virginia already has enabling legislation and 
is promulgating regulations related to such programs, other states are 
still in the very early stages of possible program development.

    Question 5. The 2011 milestones under the Bay TMDL identified 
funding resources anticipated for the total Bay watershed ($2.4B) and 
each jurisdiction (for example, $1.2B for Virginia, $774 million for 
Maryland, $67 million for PA) to achieve initial nitrogen and 
phosphorus load reductions. Has actual funding matched what was 
projected? If not, what shortfalls have occurred? How are any funding 
shortfalls affecting implementation and development of the Phase II 
WIPs?
    Answer. In their 2009-2011 milestones,\2\ the Chesapeake Bay 
watershed jurisdictions projected that they would spend a total of 
$2.36 billion between 2009 and 2011 to reduce nitrogen and phosphorus. 
In 2009, the jurisdictions reported that they had committed a total of 
$669.6 million.\3\ In 2010, the jurisdictions reported that they had 
committed a total of $761.9 million, a 14 percent increase over 2009. 
The funding for these 2 years totaled $1.43 billion, or 61 percent of 
the total identified in the milestones. The jurisdictions would need to 
provide an additional $930 million, representing a 22 percent increase 
over 2010, to meet the commitments identified in their 2009-2011 
milestones. In June 2010, the jurisdictions reported to the Chesapeake 
Bay Executive Council that they were generally on track to implement 
pollution control practices necessary to achieve load reduction 
commitments and thereby meet the commitments identified in the 2009-
2011 milestones. In instances in which the jurisdictions were behind, 
the jurisdictions were implementing contingency actions.
---------------------------------------------------------------------------
    \2\ http://archive.chesapeakebay.net/pressrelease/
EC_2009_allmilestones.pdf.
    \3\ See ChesapeakeStat at: http://stat.chesapeakebay.net/?q=node/
130&quicktabs_10=0.

    Question 6. Following the release of USDA's CEAP report in March 
2011, EPA announced that it would be working with USDA to evaluate the 
CEAP model results for possible collaboration and incorporation into 
the Chesapeake Bay Program Model. What information from the CEAP report 
was incorporated and what was not? Are the two agencies still 
coordinating on data? If so, how?
    Answer. Yes, the EPA and USDA are coordinating on model input data. 
We are committed to strong partnerships and collaboration with states 
not only to support the data collaboration effort but to continue to 
coordinate financial resources to support conservation practices in the 
Bay watershed. We see opportunities for continued collaboration, as 
detailed in the June USDA/EPA joint Chesapeake Conservation Data 
Collaboration workplan (see Attachment 3). The EPA and USDA believe 
that maintaining agriculture's viability is essential to sustaining 
ecosystems in the Chesapeake Bay basin.
    Despite being built for two different efforts, the Chesapeake Bay 
Program (CBP) Watershed Model and the CEAP cropland model provide 
consistent results regarding the relative nutrient loads from 
agricultural lands at the large basin scale and the additional 
management actions that are needed. Although the CEAP cropland model is 
not a TMDL model, it provides valuable information that will help 
enrich the CBP Watershed Model.
    NRCS data (and USDA Farm Service Agency data) from 2004-2011 are 
being incorporated into the CBP Watershed Model via the data-sharing 
agreement that USDA forged with the U.S. Geological Survey (USGS). USGS 
is currently aggregating the data to a scale that complies with farm 
bill confidentiality provisions and working with USDA and the states to 
ensure protocols are in place for removing any duplicate records. By 
the end of February 2012, USGS will deliver to the EPA a list of 
reportable NRCS/FSA practices at the county level.
    The CEAP cropland report contained a wealth of valuable information 
related to conservation practice implementation and effectiveness on 
cropland; however it is not the type of information that can be 
directly incorporated into the CBP Watershed Model. Rather, the data 
used to develop the CEAP cropland model and the findings on 
conservation practice effectiveness across different landscapes can be 
integrated with existing data. To this end, USDA and the EPA plan to 
refine and increase the level of data available for understanding 
conservation practices implemented by farmers in the Chesapeake Bay 
region--both those with state or Federal cost-share assistance and 
those funded solely by farmers.
    We have agreed to work toward standardizing data sets used in the 
modeling. We have also agreed to ensure that nutrient and sediment 
reductions from agricultural conservation practices are accurately 
credited--both those currently in use and future, new and innovative 
practices. The joint workplan (see Attachment 3) represents a 
commitment by the EPA and USDA to ensure that the latest science is 
used to inform these modeling efforts. This workplan was sent to 
Chairman Thompson in June 2011.

    Question 7. In December 2010, the Chesapeake Bay Program's 
Scientific and Technical Advisory Committee (STAC) told EPA that it 
``not been responsive to important issues raised in previous reviews'' 
of the model by STAC and that ``this is an unacceptable pattern and 
inconsistent with the U.S. EPA Peer Review Handbook.'' EPA ignored 
State partners, their own advisory group, and other stakeholders when 
they all sent warning signs that the models were based on incomplete 
and inaccurate information. Why did you ignore the advice of your own 
peers and others?
    Answer. The EPA disagrees that the Chesapeake Bay Program ``ignored 
the advice'' of STAC and others in the scientific community. The 
Chesapeake Bay Program has a long history of seeking and following the 
assessments and recommendations of specific and general criticisms from 
the scientific community. The EPA and the Chesapeake Bay Program 
partners considered STAC's findings and addressed them in the final Bay 
TMDL and the development of the jurisdictions' Watershed Implementation 
Plans.
    Furthermore, the quotes referenced in this question are out of 
context. They are from a 2010 STAC report on a Partnership-requested 
independent review of just one component of the Partnership's 
Chesapeake Bay Land Change Model (one of the suite of six models and 
tools used by the Partnership in its shared decision making). The STAC 
sponsored review was ``an urgent, short turn-around peer review of 
certain critical land use and land cover inputs to the Phase 5 Bay-wide 
watershed model.'' The quote, ``this is an unacceptable pattern and 
inconsistent with the U.S. EPA Peer Review Handbook'' was specifically 
in reference to the short review period; it was not directed at the 
full suite of models nor at the 2 decade history of peer reviews. The 
quote simply reflects the STAC review panel's frustration at the 
limited amount of time for their review and a lack of documentation on 
responses to a previously completed STAC review of the overall Land 
Change Model. STAC's overall assessment was actually very positive:

        ``Overall, the reviewers were impressed by the technical 
        quality of the work. They recognized that the Chesapeake Bay 
        Program has confronted challenging conceptual and technical 
        issues and appropriately applied state of the art approaches.''

    Question 8. In your October 5, 2011 letter to the Bay jurisdictions 
you said that states no longer need to develop local area allocations 
in their Phase II WIPs. But in an EPA question and answer document 
dated October 17, 2011 continues to threaten Federal actions against 
states:

        EPA has full discretion to determine whether Federal actions 
        are appropriate based on the degree to which reduction goals 
        are missed, the reasons why, and additional actions that 
        jurisdictions are taking to ensure that load reductions will 
        remain on track to meet the Partnership's goal of all practices 
        in place by 2025 to meet applicable water quality standards. 
        EPA has already demonstrated this discretionary authority when 
        deciding whether to establish backstop allocations and 
        adjustments in the Chesapeake Bay TMDL.

    Why do you keep changing your expectations of the states given the 
flaws in your model? Even the NAS, in a review of plans to implement 
the TMDL, has said: ``Based on the information provided, the overall 
accounting of BMPs in the Bay watershed cannot be viewed as accurate.''
    Answer. The EPA's expectations for the states have not changed. The 
EPA never intended (for EPA or the jurisdictions) to establish local 
level TMDL allocations. The purpose of local area pollution reduction 
targets--which are not smaller scale TMDL allocations--has always been 
to help conservation districts, local governments, planning 
commissions, utilities, and others clearly understand their 
contribution toward meeting the Chesapeake Bay TMDL larger basin scale 
allocations. The EPA still expects Bay jurisdictions to work with their 
local partners to develop local area pollution reduction targets in the 
Phase II WIPs in accordance with the guidance explained below.
    The October 5, 2011, letter put the modeling tools in the 
appropriate context. The letter was in response to the Bay 
jurisdictions' stated concerns with assigning local area targets in 
terms of pounds of pollutant reductions by county, given the questions 
they had about model results at the county scale. Specifically, the 
letter provides flexibility for how states choose to explain local 
contributions to meeting the Bay TMDL allocations and implementing the 
states' WIPs. The EPA is not requiring that local efforts be expressed 
as pounds reduced. They may now be explained in terms of implementation 
levels or planning actions. The EPA has offered to help the states 
develop and refine their methods.
    This letter also does not mean or imply that the model is 
``flawed.'' The model is just one tool for assessing and evaluating 
WIPs and milestones. The EPA remains confident in the model and its 
ability to inform our decisions to implement the strategies developed 
by the states, through the TMDL process, to meet water quality 
standards in the Bay.

    Question 8a. Do you think moving the goal posts is an accurate or 
good way to proceed? Given these facts, what is the basis for your 
threats?
    Answer. We do not agree that the EPA is moving the ``goal posts'' 
for Chesapeake Bay restoration. In fact, the goal posts have generally 
been in the same place for the last fifteen years. The water quality 
restoration goals for Chesapeake Bay--now embodied in Delaware, the 
District of Columbia, Maryland, and Virginia's state water quality 
standards--are still the levels of dissolved oxygen, depth of water 
clarity, acres of underwater Bay grasses, and amount of algae our 
scientists established more than a decade ago as needed to support a 
healthy Bay ecosystem. The major river basin by jurisdiction load 
reduction targets established in 1997 and refined in 2003, and the 
level of effort to meet those targets as defined in the states' 
tributary strategies, have changed very little when compared to the 
2010 Bay TMDL and the on-the-ground actions necessary to meet the Phase 
II WIP planning targets.
    Every 2 years, we will assess milestone commitments and annual 
implementation progress to assess whether states are on pace to have 
60% of practices in place by 2017 and 100% of practices in place by 
2025. However, the EPA has quarterly calls with the states to track 
success and work through issues before they fall behind. Using a common 
sense approach, a determination of Federal actions, if necessary, to 
close any potential gap, will consider many factors, including the 
degree to which reduction goals are missed, the reasons why, and any 
additional actions the jurisdiction is taking to ensure they are on 
track to meet the 2017 and 2025 deadlines.

    Question 9. The Final TMDL requires farmers in Pennsylvania to 
increase the use of nutrient management from 47% of farms to 85% of 
farms. In Virginia, nutrient management is supposed to increase from 
35% to 86%. In New York, nutrient management is supposed to go from 18% 
to 62% of farms. But, your baseline numbers in your TMDL are wrong and 
farmers in Pennsylvania, Virginia, and New York are already achieving 
high levels of nutrient management.
    Similarly, the Final TMDL requires farmers in Pennsylvania to 
increase the use of conservation tillage from 46% to 95%, from 58% to 
90% in Virginia, and from 7% to 40% in New York. Again, your baseline 
numbers in the TMDL are wrong and according to USDA about 88% of 
cropland in the watershed is already subject to conservation tillage.
    Answer. The Bay TMDL is not self-implementing and does not by 
itself require or prohibit any actions. A TMDL sets a pollutant 
reduction target or goal to be implemented through various other 
regulatory and non-regulatory programs. The TMDL does not create any 
Federal authority over activities that are not otherwise regulated.
    The numbers included in this question come from Appendix V of the 
Bay TMDL and are based completely on numbers reported by Pennsylvania, 
Virginia, and New York. Those implementation percentages represent 
actions that jurisdictions reported through 2009. Actions to meet the 
TMDL allocations for agriculture are based on the jurisdictions' final 
Phase I Watershed Implementation Plans (WIPs). The states, not EPA, 
determine the sector allocations and strategies. While the USDA CEAP 
cropland report estimates a higher rate of conservation tillage than 
has been reported by the states, the report also estimates that nearly 
80% of cropped acres, including cropland with conservation tillage, 
have a high or moderate treatment need, especially for controlling 
nutrients.
    The EPA fully supports a more complete accounting of verified 
conservation practices (including practices funded in full by farmers 
which are not in state or Federal cost-share tracking databases). In 
the Executive Order strategy, the EPA and USDA have committed to work 
with the National Association of Conservation Districts (NACD) and 
state partners to develop non-cost-share data tracking and verification 
mechanisms by July 2012. The EPA needs complete, accurate and current 
data to improve the characterization of agricultural conservation in 
the watershed. CEAP findings will help inform this effort.
    It's important to note that states have already factored in the 
data gaps in their tracking of non-cost-shared practices when they 
divided up load allocations among source sectors. States are counting 
on a certain percentage of the necessary reductions they assigned to 
agriculture from simply better tracking and reporting of verified non-
cost-shared practices between now and 2025.

    Question 9a. So, when your models are updated in 2017 do you allow 
them to take credit for these practices you can then declare successful 
implementation of the TMDL. Does this cause a problem because nothing 
in the watershed will have changed? Farmers were implementing nutrient 
management and conservation tillage before the Final TMDL and will 
continue to implement these practices afterwards. The only change will 
be in ``model land.'' How does this help clean up the Bay? How did you 
select 2017 as the timeline? Was this date or the entire TMDL schedule 
outlined in the EPA settlement agreement?
    Answer. The Chesapeake Bay Program Partnership models help the 
partnership decide how much more needs to be done to achieve water 
quality goals. Monitoring data alone will tell us when those water 
quality goals are met. Revised historical implementation figures will 
help the Partnership determine the appropriate balance of management 
actions between sectors, basins, and jurisdictions to most effectively 
achieve the goals.
    The 2017 evaluation is intended to make revisions to reflect the 
effectiveness of the practices. The EPA will continue to work with the 
states, USDA, and conservation districts to incorporate the most 
accurate and up-to-date information on what conservation practices are 
on the ground in the next round of Chesapeake Bay Program model 
updates, which will be complete in advance of the Phase III WIPs in 
2017. When the CBP models are updated, they will be calibrated to water 
quality monitoring data throughout the watershed. Where monitoring data 
tell us that more needs to be done to clean up our waters, the EPA will 
work with partners to put more conservation actions on the ground. The 
Chesapeake Bay Program watershed model is currently calibrated to 
nearly 300 sites for flow and between 100 and 200 sites for water 
quality to ensure that the estimated necessary implementation actions 
will result in the needed pollution reductions to clean up our rivers 
and streams.
    The commitment to the 2017 midpoint model updates and Phase III 
WIPs was part of the larger Chesapeake Bay Accountability Framework 
first outlined by the EPA and agreed upon by the Principals' Staff 
Committee whose membership includes the state secretaries in 2008. This 
framework was further refined in 2009 and 2010 by the EPA and the Bay 
partners. The Accountability Framework, including the schedule for 
Phase I-III WIPs and a midpoint evaluation for the Chesapeake Bay 
Program modeling tools, is discussed in more detail in the Executive 
Summary and Sections 7.2 of the Chesapeake Bay TMDL and in the Federal 
Strategy for Protecting and Restoring the Chesapeake Bay Watershed.

    Question 10. It has come to our attention that the EPA has not 
handed over vital documents pertaining to on going court cases related 
to the TMDL. Why has EPA not cooperated? Does EPA intend to comply?
    Answer. The EPA disagrees with the assertion that it has not been 
cooperative in the ongoing litigation regarding the Chesapeake Bay TMDL 
\4\ or has failed to ``hand over'' vital documents.
---------------------------------------------------------------------------
    \4\ American Farm Bureau Federation et al. v. EPA et al., Civil 
Action No. 11-0067-SHR (M.D.PA).
---------------------------------------------------------------------------
    A number of parties (identified below) are now involved in 
litigation challenging the Chesapeake Bay TMDL. In accordance with the 
Court's scheduling order as proposed by the parties, the EPA timely 
filed its administrative record in the case on August 26, 2011. This 
record consisted of more than 38,000 pages and approximately 100,000 
electronic model and data files. As is customary in cases like this, 
counsel for the EPA then conferred with counsel for the Plaintiffs over 
the scope of the administrative record. The EPA voluntarily agreed to 
add over 2,000 additional documents in October 2011, including many 
that Plaintiffs requested for inclusion. Plaintiffs then filed a motion 
seeking to add six additional documents to the administrative record 
and to seek limited discovery regarding the scope of the administrative 
record. The EPA opposed that motion. On December 28, 2011, the Court 
issued a decision granting in part and denying in part the Plaintiffs' 
motion to add several documents to the record, and denied the 
Plaintiffs' request for further discovery. Pursuant to the Order of the 
Court on January 11, 2012, the parties are currently engaged in filing 
their respective motions for summary judgment. The parties (identified 
below) are awaiting the decision of the Court to that motion.

   Plaintiffs--American Farm Bureau Federation (``AFBF''), 
        Pennsylvania Farm Bureau, the Fertilizer Institute, National 
        Pork Producers Council, National Corn Growers Association, 
        National Chicken Council, U.S. Poultry & Egg Association, 
        National Turkey Federation and National Association of Home 
        Builders (``NAHB'').

   Defendant--EPA.

    Defendant Intervenors--Chesapeake Bay Foundation, Inc. (``CBF''), 
        Citizens for Pennsylvania's Future, Defenders of Wildlife, 
        Jefferson County (West Virginia) Public Service District, 
        Midshore Riverkeeper Conservancy, the National Wildlife 
        Federation; National Association of Clean Water Agencies 
        (``NACWA''), the Maryland Association of Municipal Wastewater 
        Agencies, Inc. (``MAMWA''), the Virginia Association of 
        Municipal Wastewater Agencies, Inc. (``VAMWA'') and 
        Pennsylvania Municipal Authority Association (``PMAA'').

                              ATTACHMENT 1

EPA Engagement with the Agriculture Community
    EPA, USDA, the state agricultural agencies and the agricultural 
community have a long history of collaborating on Chesapeake Bay 
restoration to ensure a healthy Bay and viable agriculture in the 
Chesapeake Bay watershed. USDA, the state agricultural agencies, and 
agricultural industry groups have been active participants in the 
Chesapeake Bay Program: from helping to inform modeling efforts to 
working together to identify and credit agricultural practices, to 
working with the states on their agricultural commitments in the 
Watershed Implementation Plans and Bay TMDL.
    Continued collaboration with the agriculture community will be 
critical in the coming years to refine modeling tools, improve 
agricultural conservation tracking and verification, and accelerate 
agricultural nutrient and sediment reductions necessary to restore the 
Bay and local waters. This document summarizes EPA's collaboration with 
USDA and the agriculture community on Chesapeake Bay watershed 
restoration efforts.
EPA Outreach During TMDL and WIP Development
    EPA conducted an extensive, 2 year outreach program to exchange 
information with key stakeholders and the broader public during the 
development of the Chesapeake Bay TMDL. Outreach to the agriculture 
community was particularly focused and occurred throughout the region. 
EPA consulted with the agricultural community through three primary 
forums: stakeholder meetings, meetings with jurisdictions on Watershed 
Implementation Plan development, and meetings with agricultural 
community on Chesapeake Bay Program Watershed Model.
    Stakeholder meetings: The outreach program in 2009 and 2010 
featured hundreds of meetings with interested groups; two extensive 
rounds of public meetings, stakeholder sessions; a series of monthly 
interactive webinars accessed online by more than 2,500 people; three 
notices published in the Federal Register; and a close working 
relationship with Chesapeake Bay Program committees. Many agricultural 
groups and stakeholders participated in these meetings including the 
Farm Bureau, agribusiness organizations, individual farmers, as well as 
state agricultural agencies and conservation districts. In addition, to 
the general TMDL outreach meetings, EPA worked with the states to host 
sector-specific meetings with key stakeholders from the agricultural 
community, the homebuilder community, and conservation groups. EPA 
reached out to key agricultural leaders within each state to co-host 
these meetings in order to give the farming community a chance to ask 
questions, voice concerns, and discuss what the TMDL means for 
agriculture.
    In addition to the public outreach and sector-specific meetings, 
many farming groups and regional and national agriculture associations 
invited EPA to brief them on the Bay TMDL. An example of one of the 
earliest outreach efforts is an August 2009 informal ``coffee 
conversation'' with EPA officials, organized by NRCS and the American 
Farmland Trust (see Attachment B * for a participants list, a copy of 
the invitation, and prep questions). Other agricultural organizations 
that EPA met with over the past 2 years to discuss the Bay TMDL 
include:
---------------------------------------------------------------------------
    * Editor's note: The attachments B-C referred to in the document 
entitled, EPA Engagement with the Agriculture Community, have not been 
reprinted here, they can be seen in the House Committee on Agriculture 
hearing Serial No. 112-6, entitled, Hearing To Review the Chesapeake 
Bay TMDL, Agricultural Conservation Practices, and Their Implications 
on National Watersheds, dated March 10, 2011, pp. 167-174.

---------------------------------------------------------------------------
   National Pork Producers.

   National Turkey Federation.

   U.S. Poultry & Egg Association representatives.

   American Farmland Trust and NRCS organized a meeting between 
        Bay watershed farmers and EPA senior leaders to discuss TMDL 
        and how it relates to farmers. Virginia's Waste Solution Forum 
        in the Shenandoah Valley.

   Conservation Technology Innovation Center annual tour 2010--
        audience: over 100 VA farmers, conservation district, 
        university and NRCS representatives.

   Pennsylvania All Bay Day--audience: PA conservation 
        districts and agency representatives.

   Mid-Atlantic Certified Crop Advisors Board--crop advisors in 
        VA, MD, DE, and WV.

   Governor Harry Hughes Agro-Ecology Center Board.

   Maryland Association of Conservation Districts Board.

   National Webcast on ``Changing Management of Nutrients in 
        the Chesapeake Bay Watershed'' hosted by the Extension 
        Livestock and Poultry Environmental Learning Center with over 
        150 representatives from agricultural organizations, agencies, 
        and land-grant universities.

   WIP development discussions with jurisdictions--In 2010, EPA 
        had extensive formal and informal discussions with the state 
        Watershed Implementation Plan stakeholder teams as the TMDL and 
        Watershed Implementation Plans were being drafted and 
        finalized. Many agricultural groups and stakeholders 
        participated in these teams and were present at these meetings 
        including the Farm Bureau, agribusiness organizations, as well 
        as state agricultural agencies and conservation districts (See 
        Attachment C for lists of WIP teams).

    EPA senior leadership also held frequent discussions with state 
        agricultural secretaries on topics such as Ag Certainty and WIP 
        development and participated in key policy discussions with the 
        Chesapeake Bay Program's Principal Staff Committee to the 
        Chesapeake Bay Executive Council throughout the development of 
        the Bay TMDL.

    Looking back over the past decades, the agriculture community has 
        been engaged since the development of the Chesapeake Bay 
        Tributary Strategy (started in 1995) that served as a starting 
        point for most WIPs.
Agriculture Participation in CBP Watershed Model
    The suite of models used for the TMDL have been developed and 
utilized over 20 years through extensive collaboration with Federal, 
state, academic and private partners. This includes extensive input 
from USDA, state agricultural agencies, and agricultural organizations 
on the CBP Agriculture Workgroup. Use and development of the models is 
fully transparent and open with all decisions and refinements to the 
model made at public meetings of the Chesapeake Bay Program. The 
Agriculture Workgroup holds regular public meetings to provide 
extensive input into all decisions regarding conservation practice 
effectiveness, tracking and verification, and model refinements. The 
Agriculture Workgroup is co-chaired by USDA NRCS and the University of 
Maryland and is comprised of the following organizations:

    Leadership:

  --Chair, UMD and Vice Chair, USDA NRCS

    Agricultural Organizations:

  --Delaware Maryland Agribusiness Association

  --Virginia Poultry Association

  --Mid-Atlantic Farm Credit

  --U.S. Poultry & Egg Association

  --MD Farm Bureau

  --Virginia Agribusiness Council

  --VA Grain Producers Association

  --West Virginia Department of Agriculture

  --Delmarva Poultry Industry, Inc.

  --VA Farm Bureau

  --Delaware Pork Producers Association

  --American Farmland Trust

    Federal and State Agricultural Agencies:

  --USDA Natural Resources Conservation Service

  --Maryland Department of Agriculture

  --West Virginia Department of Agriculture--Regulatory and 
        Environmental Affairs Division

  --Delaware Department of Agriculture

  --Pennsylvania State Conservation Commission

  --Maryland Department of Agriculture

    Land-Grant Universities and Extension:

  --West Virginia University

  --Pennsylvania State University

  --University of Maryland--College Park

  --University of Delaware

  --Cornell University

  --University of Maryland Cooperative Extension

    Conservation Districts and Commissions/Coalitions:

  --Lancaster County Conservation District

  --Cortland County Soil and Water Conservation District

  --Madison Co. SWCD

  --Chesapeake Bay Commission

  --Upper Susquehanna Coalition

  --PA No-Till Alliance

  --Center for Conservation Incentives at Environmental Defense

    EPA and State Environmental Agencies:

  --U.S. Environmental Protection Agency

  --Virginia Department of Environmental Quality

  --Maryland Department of Natural Resources

  --New York State Department of Environmental Conservation

  --Virginia Department of Conservation and Recreation

  --Pennsylvania Department of Environmental Protection

  --West Virginia Department of Environmental Protection

    In addition to extensive agriculture stakeholder involvement in the 
Agriculture Workgroup, EPA has also responded to requests from the 
agricultural community for more comprehensive briefings on the Bay TMDL 
and the CBP Watershed Model. On March 22, 2010, EPA worked with USDA to 
host a webinar on March 22, 2010 to answer the agricultural community's 
questions about the model and to identify opportunities for model 
refinements in the future. Following the webinar, EPA held a session 
with the poultry industry to provide a forum for the poultry industry 
to discuss specific poultry modeling and data issues.
    USDA's Natural Resources Conservation Service (NRCS) has played a 
critical role in reviewing and providing data to the CBP Watershed 
Model, including coordinating the CBP's Nutrient Subcommittee over 
almost a decade, serving on the Agriculture Workgroup (currently vice 
chair) which makes all decisions related to agricultural modeling, 
participating on technical panels to develop conservation effectiveness 
estimates, and collaborating with EPA on USDA Conservation Effects 
Assessment Project and CBP Watershed Model efforts.
EPA-USDA Coordination
    EPA and USDA play an active role in the Chesapeake Bay Program to 
work towards maintaining well-managed farms and restoring the Bay. Both 
agencies agree that maintaining the viability of agriculture is an 
essential component to sustaining ecosystems in the Bay. Both 
acknowledge the enormous contribution that farmers are making to 
improve Bay water quality. And, both are committed to strong 
partnerships and collaboration with states and local governments, 
urban, suburban and rural communities, and the private sector to 
achieve environmental objectives for the Bay. Throughout the TMDL 
process, EPA and USDA had on-going discussions and extensive briefings 
on the TMDL, models, state Watershed Implementation Plans, etc. Recent 
examples of that collaboration include:

   Developing and implementing the Strategy for Protecting and 
        Restoring the Chesapeake Bay Watershed pursuant to Executive 
        Order 13508.

   Developing a framework to provide certainty to farmers who 
        implement practices that protect water quality in the 
        Chesapeake Bay.

   Working with the National Association of Conservation 
        Districts, state agricultural agencies, and agricultural 
        community to ensure that non-cost-shared data can be tracked, 
        verified, and credited in the CBP Watershed Model as committed 
        to in the E.O. Strategy.

   Supporting the states in implementing the commitments 
        outlined in their TMDL Watershed Implementation Plans.

   Aligning innovation grants programs to support key 
        priorities for addressing water quality challenges facing 
        agriculture (EPA's Innovative Nutrient and Sediment Reduction 
        program and NRCS's Conservation Innovation Grants program).

   Working together to coordinate respective modeling efforts.

                              ATTACHMENT 2

December 22, 2010

Hon. Thomas J. Quigley,
Secretary,
Department of Conservation and Natural Resources,
Harrisburg, PA.

    Dear Secretary Quigley:

    We want to thank you and your staff for your willingness to discuss 
a framework to provide certainty to farmers who implement practices 
that protect water quality in the Chesapeake Bay. It is our hope that 
we have developed a constructive framework that states can use in 
providing to producers incentives and recognition that accelerate the 
adoption of conservation practices and advance the objectives of your 
state watershed implementation plans.
    As we at the U.S. Department of Agriculture and the U.S. 
Environmental Protection Agency have discussed with you and your staff, 
certainty is viewed as a tool that states can use with agricultural 
producers to help achieve multiple goals for agriculture and water 
quality, including:

   Increasing producer interest and willingness in adopting 
        Best Management Practices based on farm-specific conservation 
        planning, which, in turn, would increase the pace and extent to 
        which resource conservation and verifiable water-quality 
        improvements are achieved.

   Providing to producers clear and consistent communications 
        on conservation actions consistent with the objectives of the 
        state watershed implementation plans.

   Providing assurance to agricultural business operations that 
        investments in conservation practices will provide benefits for 
        farms and water quality consistent with state watershed 
        implementation plans.

    While this is an effort best done at the state level, USDA and the 
EPA are willing to support you as you develop a state certainty 
program. As discussed earlier this month, by January 15, 2011, the six 
Chesapeake Bay basin state agriculture secretaries will follow up with 
their USDA Natural Resources Conservation Service (NRCS) State 
Conservationists to confirm interest in pursuing a certainty program. 
In turning this framework into a practical tool, you are encouraged to 
call on USDA and EPA staff for assistance. The NRCS stands ready to 
help you develop farm-specific plans to support such a program.
    USDA and the EPA believe that maintaining agriculture's viability 
is an essential component to sustaining ecosystems in the Chesapeake 
Bay basin. We are committed to strong partnerships and collaboration 
with states, and we very much appreciate your contributions to 
improving the Bay. We look forward to working with you on this and 
other issues to ensure a healthy basin ecosystem, strong rural 
communities and a vital agricultural sector.
            Sincerely,

            
            




Kathleen A. Merrigan,                Bob Perciasepe,
Deputy Secretary,                    Deputy Administrator,
U.S. Department of Agriculture;      U.S. Environmental Protection
                                      Agency.


                                 ______
                                 
December 22, 2010

Hon. John Hangar,
Secretary,
Pennsylvania Department of Environmental Protection,
Harrisburg, PA.

    Dear Secretary Hangar:

    We want to thank you and your staff for your willingness to discuss 
a framework to provide certainty to farmers who implement practices 
that protect water quality in the Chesapeake Bay. It is our hope that 
we have developed a constructive framework that states can use in 
providing to producers incentives and recognition that accelerate the 
adoption of conservation practices and advance the objectives of your 
state watershed implementation plans.
    As we at the U.S. Department of Agriculture and the U.S. 
Environmental Protection Agency have discussed with you and your staff, 
certainty is viewed as a tool that states can use with agricultural 
producers to help achieve multiple goals for agriculture and water 
quality, including:

   Increasing producer interest and willingness in adopting 
        Best Management Practices based on farm-specific conservation 
        farming, which, in turn, would increase the pace and extent to 
        which resource conservation and verifiable water-quality 
        improvements are achieved.

   Providing to producers clear and consistent communications 
        on conservation actions consistent with the objectives of the 
        state watershed implementation plans.

   Providing assurance to agricultural business operations that 
        investments in conservation practices will provide benefits for 
        farms and water quality consistent with state watershed 
        implementation plans.

    While this is an effort best done at the state level, USDA and the 
EPA are willing to support to you as you develop a state certainty 
program. As discussed earlier this month, by January 15, 2011, the six 
Chesapeake Bay basin state agriculture secretaries will follow up with 
their USDA Natural Resources Conservation Service (NRCS) State 
Conservationists to confirm interest in pursuing a certainty program. 
In turning this framework into a practical tool, you are encouraged to 
call on USDA and EPA staff for assistance. The NRCS stands ready to 
help you develop farm-specific plans to support such a program.
    USDA and the EPA believe that maintaining agriculture's viability 
is an essential component to sustaining ecosystems in the Chesapeake 
Bay basin. We are committed to strong partnerships and collaboration 
with states, and we very much appreciate your contributions to 
improving the Bay. We look forward to working with you on this and 
other issues to ensure a healthy basin ecosystem, strong rural 
communities and a vital agricultural sector.
            Sincerely,

            
            




Kathleen A. Merrigan,                Bob Perciasepe,
Deputy Secretary,                    Deputy Administrator,
U.S. Department of Agriculture;      U.S. Environmental Protection
                                      Agency.


                              ATTACHMENT 3

June 28, 2011

Hon. Glenn Thompson,
Chairman,
Subcommittee on Conservation, Energy, and Forestry,
House Committee on Agriculture,
Washington, D.C.

    Dear Chairman Thompson:

    At the Subcommittee on Conservation, Energy and Forestry hearing 
about the Chesapeake Bay in March, the USDA and the EPA stated their 
intention to continue efforts to refine and increase the level of data 
available for understanding the implementation of conservation 
practices by farmers in the Chesapeake Bay Region. To ensure that the 
work continues to progress, the EPA and the USDA scientists have 
developed a plan of work for the key activities that are expected to be 
accomplished. A copy of the plan of work for that effort is enclosed.
    The additional data and refinements will serve a set of key 
purposes that will:

   Account for agricultural conservation practices implemented 
        throughout the Chesapeake Bay watershed, including those 
        practices funded solely by the farmer (not funded by Federal or 
        state cost-share funding).

   Develop, as appropriate and feasible, a consistent estimate 
        of pasture and hay land acres for use by the EPA and the USDA.

   Develop, as appropriate and feasible, a consistent approach 
        for estimating fertilizer and manure applications for use by 
        the EPA and the USDA.

    In addition, there is ongoing work to (1) update and refine current 
conservation practice effectiveness estimates; and (2) credit new 
conservation practices as they are applied in the field. These efforts 
are intended to reflect our long term commitment to ensuring the best 
possible data is available. As a result of this work, we hope to 
increase our understanding of the impact of conservation practices and 
of the contribution farmers are making to restoration of the Bay.
    We appreciate your interest in this important issue and will be 
glad to provide additional information that you may request.
            Sincerely,

            
            
Arvin R. Ganesan,
Associate Administrator.
                               enclosure
U.S. Department of Agriculture (USDA) and U.S. Environmental Protection 
        Agency (EPA) Chesapeake Bay Conservation Data Collaboration
    In December 2010, the EPA released the final Total Maximum Daily 
Load (TMDL) for the Chesapeake Bay. TMDL nutrient and sediment load 
allocations for the Bay Watershed States were developed using water 
quality monitoring data and a suite of models, including the Chesapeake 
Bay Program Watershed Model.
    In March 2011, the USDA released its Assessment of the Effects of 
Conservation Practices on Cultivated Cropland in the Chesapeake Bay 
Region, a document known familiarly as the Chesapeake Bay Conservation 
Effects Assessment Project, or CEAP report. The USDA's CEAP effort is 
based on a combination of farmer surveys and modeling used to estimate 
the impact of conservation practices on the landscape.
    There is a lot of interest from Chesapeake Bay stakeholders and 
within the USDA and the EPA to ensure consistency between the two 
modeling efforts and that they are informed by the best data available 
describing implementation of conservation by farmers in the Chesapeake 
Bay region. Below are commitments by the two agencies to that end.

    Improve tracking and reporting of conservation practices in the 
Chesapeake Bay Program (CBP) Watershed Model

    As called for in the May 12, 2009 Executive Order 13508--Strategy 
for Protecting and Restoring the Chesapeake Bay Watershed, the USDA and 
the EPA are working with state agricultural agencies, conservation 
districts, and other key agricultural groups to ensure that non-cost-
shared practices are tracked, verified, and reported for credit in the 
CBP Watershed Model.
    Additionally, the USDA is surveying approximately 1,400 producers 
through the National Resources Inventory (NRI) in 2011 to estimate the 
level of conservation practice implementation and to refine the spatial 
scale of available data. Combined with the similar work conducted from 
2003-2006 (presented in the 2011 CEAP report), the results of this 
survey will provide an estimate of additional on-the-ground 
implementation of conservation practices between the two survey time 
periods.

    Commitments:

    The USDA and the EPA will work with state agricultural agencies, 
conservation districts, and other key agricultural groups to develop a 
mechanism for tracking, verifying and reporting non-cost-shared 
conservation practices on agricultural lands for use in the CBP 
Watershed Model.

    Timeframe: Complete by July 2012.

    Using CEAP results from 2003-2006 and the pending 2011-12 analysis, 
the USDA and the CBP Partnership will explore inclusion of the 
additional practices identified in these surveys into the CBP Watershed 
Model.

    Timeframe: Begin in 2012.

    Develop consistent estimates of pasture and hay land use in both 
models

    The CBP Watershed Model and CEAP Model use different approaches for 
estimating pasture and hay land in the Chesapeake Bay watershed. The 
U.S. Geological Survey developed a methodology for estimating land use 
for the CBP modeling effort in which the pasture and hay land use is 
based on the USDA Census of Agriculture data rather than satellite 
imagery.

    Commitment:

    The Natural Resources Conservation Service (NRCS) and the CBP will 
work together to investigate the appropriateness of using a common 
approach for estimating pasture and hay land in both models.

    Timeframe: Begin in 2011.

    Coordinate fertilizer and manure nutrient input assumptions in both 
models

    The NRCS and the CBP independently developed databases to estimate 
nutrient applications to cropland and arrived at similar figures for 
total application. However, differences likely exist in application 
timing and amounts applied by region, crop, and management system. A 
consistent approach for fertilizer and manure nutrient inputs that is 
informed by the significant work by the USDA and the CBP partnership 
would likely improve both models.

    Commitment:

    The NRCS and the CBP will work together to investigate the 
development of a single database to estimate nutrient applications to 
cropland that would drive both modeling efforts, building on the 
experiences of both. Alternatively, given the different temporal and 
spatial scales of the modeling, the NRCS and the CBP can work together 
to standardize assumptions across databases.

    Timeframe: Begin 2012 and continue thereafter. Results may be used 
in CEAP on an ongoing basis and may be used for the CBP management 
decisions in 2017.

    Develop comparable scales for reporting nutrient/sediment loads in 
CEAP & CBP Models

    Commitment:

    Currently the two models track and report loads on different 
geographic scales. Development of common reporting scales will allow a 
more effective comparison of model findings and increase watershed 
model data and technique sharing capabilities. As the technologies of 
the two models advance, opportunities to collaborate should be 
explored.

    Timeframe: Begin 2012 and continue thereafter.

    There are two further tasks that are already in progress to ensure 
that the CBP Watershed Model is informed by the latest scientific data:

    Updating current conservation practice effectiveness estimates 
based on the latest science. The NRCS and the CBP will work with the 
Agriculture Workgroup to determine the most appropriate way to inform 
updates to conservation practice effectiveness estimates in the CBP 
Watershed Model, with a particular focus on characterizing spacial 
variability in practice effectiveness.

    Timeframe: Ongoing

    Crediting new conservation practices. The EPA will provide 
resources to help coordinate the effort to credit new conservation 
practices in the CBP Watershed Model, in accordance with the 
established protocols. The USDA will provide relevant data on 
effectiveness estimates of the new conservation practices to inform 
assessment by expert panels that evaluate practice effectiveness.

    Timeframe: Ongoing

                                  
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