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



 
                 FORTY YEARS AFTER THE CLEAN WATER ACT:
                      IS IT TIME FOR THE STATES TO
                   IMPLEMENT SECTION 404 PERMITTING?

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

                               (112-106)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                    WATER RESOURCES AND ENVIRONMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 20, 2012

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure


         Available online at: http://www.gpo.gov/fdsys/browse/
        committee.action?chamber=house&committee=transportation



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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                    JOHN L. MICA, Florida, Chairman

DON YOUNG, Alaska                    NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
FRANK A. LoBIONDO, New Jersey        Columbia
GARY G. MILLER, California           JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois         CORRINE BROWN, Florida
SAM GRAVES, Missouri                 BOB FILNER, California
BILL SHUSTER, Pennsylvania           EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia  ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan          TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California            RICK LARSEN, Washington
ANDY HARRIS, Maryland                MICHAEL E. CAPUANO, Massachusetts
ERIC A. ``RICK'' CRAWFORD, Arkansas  TIMOTHY H. BISHOP, New York
JAIME HERRERA BEUTLER, Washington    MICHAEL H. MICHAUD, Maine
RANDY HULTGREN, Illinois             RUSS CARNAHAN, Missouri
LOU BARLETTA, Pennsylvania           GRACE F. NAPOLITANO, California
CHIP CRAVAACK, Minnesota             DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas              MAZIE K. HIRONO, Hawaii
LARRY BUCSHON, Indiana               JASON ALTMIRE, Pennsylvania
BILLY LONG, Missouri                 TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio                      HEATH SHULER, North Carolina
PATRICK MEEHAN, Pennsylvania         STEVE COHEN, Tennessee
RICHARD L. HANNA, New York           LAURA RICHARDSON, California
JEFFREY M. LANDRY, Louisiana         ALBIO SIRES, New Jersey
STEVE SOUTHERLAND II, Florida        DONNA F. EDWARDS, Maryland
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
REID J. RIBBLE, Wisconsin
CHARLES J. ``CHUCK'' FLEISCHMANN, 
Tennessee
VACANCY

                                  (ii)

  
?

            Subcommittee on Water Resources and Environment

                       BOB GIBBS, Ohio, Chairman

DON YOUNG, Alaska                    TIMOTHY H. BISHOP, New York
JOHN J. DUNCAN, Jr., Tennessee       JERRY F. COSTELLO, Illinois
GARY G. MILLER, California           ELEANOR HOLMES NORTON, District of 
TIMOTHY V. JOHNSON, Illinois         Columbia
BILL SHUSTER, Pennsylvania           RUSS CARNAHAN, Missouri
SHELLEY MOORE CAPITO, West Virginia  DONNA F. EDWARDS, Maryland
CANDICE S. MILLER, Michigan          CORRINE BROWN, Florida
DUNCAN HUNTER, California            BOB FILNER, California
ANDY HARRIS, Maryland                EDDIE BERNICE JOHNSON, Texas
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHAEL E. CAPUANO, Massachusetts
JAIME HERRERA BEUTLER, Washington,   GRACE F. NAPOLITANO, California
Vice Chair                           JASON ALTMIRE, Pennsylvania
CHIP CRAVAACK, Minnesota             STEVE COHEN, Tennessee
LARRY BUCSHON, Indiana               LAURA RICHARDSON, California
JEFFREY M. LANDRY, Louisiana         MAZIE K. HIRONO, Hawaii
JEFF DENHAM, California              NICK J. RAHALL II, West Virginia
JAMES LANKFORD, Oklahoma               (Ex Officio)
REID J. RIBBLE, Wisconsin
JOHN L. MICA, Florida (Ex Officio)

                                 (iii)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................   vii

                               TESTIMONY
                                Panel 1

David K. Paylor, Director, Virginia Department of Environmental 
  Quality, and Vice-Chair, Water Committee, Environmental Council 
  of the States..................................................    10
Jeff Littlejohn, P.E., Deputy Secretary for Regulatory Programs, 
  Florida Department of Environmental Regulation.................    10
George Elmaraghy, P.E., Chief, Division of Surface Water, Ohio 
  Environmental Protection Agency, and Member, Association of 
  State Wetland Managers.........................................    10
William Creal, Chief, Water Resources Division, Michigan 
  Department of Environmental Quality, and Board Member, 
  Association of Clean Water Administrators......................    10
Todd L. Ambs, President, River Network...........................    10

                                Panel 2

Jo-Ellen Darcy, Assistant Secretary of the Army for Civil Works..    32
Denise Keehner, Director, Office of Wetlands, Oceans, and 
  Watersheds, U.S. Environmental Protection Agency...............    32

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

David K. Paylor..................................................    49
Jeff Littlejohn, P.E.............................................    57
George Elmaraghy, P.E............................................    60
William Creal....................................................    69
Todd L. Ambs.....................................................    76
Jo-Ellen Darcy...................................................    85
Denise Keehner...................................................    98

                       SUBMISSIONS FOR THE RECORD

Hon. Bob Gibbs, a Representative in Congress from the State of 
  Ohio, request to submit the following into the record:

    Mike Carey, Ohio Coal Association, letter to Scott Nally, 
      Director, Ohio Environmental Protection Agency, regarding 
      Ohio Coal Association opposition to Ohio EPA's request for 
      authority to pursue delegation under Section 404 of the 
      Clean Water Act, March 7, 2012.............................   107
    Patrick Jacomet, Executive Director, Ohio Aggregates & 
      Industrial Minerals Association, letter to Scott Nally, 
      Director, Ohio Environmental Protection Agency, regarding 
      amendment to SB 294, March 13, 2012........................   109
    Jeanne Christie, Executive Director, Association of State 
      Wetland Managers (ASWM), testimony for the record..........   110
        Includes the following materials:

        ASWM Fact Sheets on Clean Water Act Section 404 State 
          Assumption.............................................   112
        ``Clean Water Act Section 404 Program Assumption: A 
          Handbook for States and Tribes,'' prepared by ASWM and 
          Environmental Council of the States, August 2011.......   123
        Peter S. Silva, Assistant Administrator, U.S. 
          Environmental Protection Agency, letter to R. Steven 
          Brown, Executive Director, Environmental Council of the 
          States, and Jeanne Christie, Executive Director, ASWM, 
          December 27, 2010......................................   160
Hon. Timothy H. Bishop, a Representative in Congress from the 
  State of New York, request to submit letter to Hon. Bob Gibbs 
  from William J. Snape III, Senior Counsel, Center for 
  Biological Diversity, and Professor and Practitioner in 
  Residence, American University, Washington College of Law, 
  September 19, 2012.............................................     5
Jo-Ellen Darcy, Assistant Secretary of the Army for Civil Works, 
  responses to questions for the record from:

    Hon. Chip Cravaack, a Representative in Congress from the 
      State of Minnesota.........................................    93
    Hon. Bill Shuster, a Representative in Congress from the 
      State of Pennsylvania......................................    93

                        ADDITIONS TO THE RECORD

John Jaschke, Executive Director, Minnesota Board of Water and 
  Soil Resources, letter to Hon. Bob Gibbs, September 27, 2012...   162
Collin O'Mara, Secretary, Delaware Department of Natural 
  Resources and Environmental Control, letter to Hon. Bob Gibbs, 
  September 27, 2012.............................................   164

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                   FORTY YEARS AFTER THE CLEAN WATER
                   ACT: IS IT TIME FOR THE STATES TO
                   IMPLEMENT SECTION 404 PERMITTING?

                              ----------                              


                      THURSDAY, SEPTEMBER 20, 2012

                  House of Representatives,
                    Subcommittee on Water Resources
                                   and Environment,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:02 a.m. in 
Room 2253, Rayburn House Office Building, Hon. Bob Gibbs 
(Chairman of the subcommittee) presiding.
    Mr. Gibbs. Good morning. We will convene the Subcommittee 
on Water Resources and Environment, a subcommittee of T&I. And 
welcome, everybody, here today. I will start with my opening 
statement. Let's get organized here a little bit. This is a lot 
more cozy, up here in this room. We shouldn't have any trouble 
hearing everybody.
    Again, welcome. This is a Water Resources and Environment 
Subcommittee hearing on ``Forty Years After the Clean Water 
Act: Is it Time for the States to Implement Section 404 
Permitting?''
    A note that next month will be the 40th anniversary of the 
Clean Water Act. When Congress wrote the Clean Water Act, it 
did not contemplate having a single, federally dominated water 
quality program. Rather, Congress intended the States and the 
EPA to implement the Clean Water Act as a Federal-State 
partnership, where States and the EPA act as co-regulators. 
This, in essence, is a cooperative federalism.
    While the States have played an integral role in 
implementing many parts of the Clean Water Act over the past 40 
years, including water quality standards and NPS permitting, 
there is an important program under the Clean Water Act that 
remains predominantly administered by the Federal Government. 
This is the dredge, or fill, wetlands permit program under 
Section 404 of the Clean Water Act.
    While some of the 46 States have primary responsibility for 
implementing NPDES permit program, only 2 States have assumed 
administration of the 404 permit program. This is despite the 
fact that, as I understand it, there are numerous States that 
are interested in assuming the program.
    State assumption of Section 404 gives a State the lead role 
in evaluating and issuing permits. This can eliminate a 
significant amount of State and Federal duplication, and result 
in increased program efficiency and consistency in permit 
decisions. It also can help us ensure that State-specific needs 
and conditions are more directly addressed.
    States know best what their issues are and how to address 
them. I want to know why more States have not assumed the 404 
program. And specifically, I want to hear about what are the 
barriers that are holding States back from assuming the 
program, and what statutory or other impediments, if any, are 
standing in the way of making this program an effective 
Federal-State partnership.
    The aim of this hearing today is fact-finding, so we can 
learn more about the States' assumption issue--assuming--this 
issue. And also, I think, as part of our role as an oversight 
capacity.
    We assembled two panels of witnesses, including two Federal 
agencies responsible for Section 404 permitting, and several 
State representatives who will share their perspective on State 
assumption of this program. I welcome all of our witnesses. But 
this time I want to yield to my ranking member, Mr. Bishop, for 
any comments you may have.
    Mr. Bishop. Thank you very much, Mr. Chairman. And thank 
you for holding today's hearing. While the topic of today's 
hearing is an interesting one, I have to question how today's 
hearing will help address the issues that this subcommittee 
should be focusing on, which is creating jobs for American 
families. In light of this Congress' mantra of doing more with 
less, I am curious how our Republican majority plans to address 
many of the concerns raised by the States without further 
diminishing Clean Water Act protections over our waters.
    Today we will discuss how some States wish to assume 
regulatory authority over dredged and fill activities currently 
covered by Section 404 of the Clean Water Act. Several States 
have articulated why they would like to assume regulatory 
authority over 404 activities, but have failed to use existing 
Clean Water Act provisions to do so, provisions that were 
adopted by this committee over 30 years ago.
    The chairman mentioned perceived barriers to State 
assumptions that--to State assumption that States recommend 
action on. However, we need to be honest with our witnesses and 
explain how, even if we agree with the States' concerns, many 
of their recommendations are unlikely to find support with the 
current House leadership.
    First, States are requesting that Congress enact a new, 
dedicated grant program for States to set up and manage their 
individual wetlands programs. Yet all year the Republican 
majority has blocked this subcommittee from moving any 
legislation that would either reauthorize existing programs, 
such as the Clean Water State Revolving Fund at increased 
levels, or would create any new authorities.
    In addition, this Congress must soon address the 
consequences of sequestration, where Federal agencies such as 
the Corps and the EPA will need to absorb an additional 7- to 
9-percent cut in funding, including an estimated cut of $120 
million from the Clean Water SRF and an estimated $20 million 
cut from Section 106 funding. So, I would ask my colleagues and 
the State witnesses where they would have Congress cut further 
to come up with these additional funds for State 404 
implementation.
    Second, some States are recommending that Congress grant 
them authority to regulate activities in the traditionally 
navigable waters, water that--waters that are covered by 
Section 10 of the Rivers and Harbors Act. Here again, I imagine 
that my Republican colleagues would be reluctant to grant 
States with potential veto authority over essential Federal 
functions such as national defense, protection of commercial 
navigation, and flood control projects.
    Some also suggest that State assumption of the 404 
authority will result in faster and cheaper permits for the 
regulated community, as well as greater consistency and 
efficiency in permitting process. Yet there is evidence to the 
contrary, and I want the record to reflect the following.
    Number one, when you compare apples to apples, the average 
permit processing time for the States of Michigan and New 
Jersey is currently about the same as the overwhelming majority 
of Federal 404 permits approved by the Corps. So existing data 
does not show that permits will be processed faster by States.
    Second, in the absence of additional Federal 
appropriations, States may be forced to raise an additional 
funds to administer the 404 program through State general 
revenues, or permit fees. So it is not necessarily a given that 
404 permits will be cheaper under State authority.
    And, third, permit applicants may also face greater 
confusion trying to figure out which Federal or State agency is 
responsible in those States that choose to administer only 
portions of the 404 program, or if States are unable to assume 
authority over navigable, in fact, waters.
    So, exactly why are we holding today's hearing, especially 
as this Congress plans on making its getaway tomorrow for the 
upcoming elections? If the reason for today's hearing is to lay 
down a marker for further changes to Clean Water Act 
protections over waters, similar to other bills moved by this 
subcommittee through the Congress, then in my view this is the 
wrong approach for protecting the health and well-being of 
American families, and one that I cannot support.
    Rather than holding this hearing, I would have preferred to 
see this subcommittee meeting be an opportunity to advance 
legislation such as the Clean Water SRF reauthorization, to 
address the current 11.3 percent unemployment rate for the 
construction industry nationally--and I will point in my--
pardon me, on Long Island, over 30 percent unemployment in the 
heavy construction industry.
    Just like the recently enacted surface transportation 
program, the need for investing in wastewater infrastructure is 
enormous, and will not go away, simply by ignoring it. 
Similarly, reauthorization and reforming programs to rebuild 
our crumbling infrastructure will create thousands of jobs. For 
every $1 billion invested in wastewater infrastructure, this 
Nation can create between 28,000 and 33,000 jobs in communities 
across America, while improving public health and the 
environment.
    For the past year-and-a-half I have been working in good 
faith with outside groups and colleagues across the aisle to 
reach consensus on the best way to renew the Federal commitment 
to funding wastewater infrastructure. Unfortunately, these 
efforts have been rebuffed by the Majority at every step, 
including a party-line vote against reauthorization of the 
Clean Water SRF before the August recess.
    It looks as if we will recess this committee and this 
Congress for the elections without moving a Clean Water SRF 
reauthorization. This will mark the first time since Chairman 
Bud Shuster led this committee that we have not acted on a 
Clean Water SRF reauthorization. This is a missed opportunity, 
not only in terms of what this committee should be doing to 
promote good-paying jobs here at home, but also in meeting its 
longstanding obligation to work with the States in protecting 
public health and the environment.
    I yield back the balance of my time.
    Mr. Gibbs. OK. Before I introduce our witnesses, I want to 
ask unanimous consent that the following letters and supporting 
documents from the aggregates--the Ohio Coal Association and 
the Association of State Wetland Managers--be included in the 
record.
    [No response.]
    Mr. Gibbs. Without objection?
    Mr. Bishop. No objection.
    Mr. Gibbs. OK----
    Mr. Bishop. And I have one, also, one----
    Mr. Gibbs. Oh, OK, OK. Well, OK. So that is so ordered.
    [Please see pp. 107-161 for the materials referenced by 
Hon. Bob Gibbs.]
    Mr. Bishop. OK.
    Mr. Gibbs. And go ahead.
    Mr. Bishop. I ask--thank you, Mr. Chairman. I ask unanimous 
consent that a letter from Mr. William Snape of the Center for 
Biological Diversity be included in today's hearing record.
    Mr. Gibbs. So ordered.
    [The information follows:]

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    Mr. Bishop. Thank you very much.
    Mr. Gibbs. OK. Our first panel of witnesses--I will just go 
through quickly and introduce you--is Mr. David Paylor, he is 
the director of the Virginia Department of Environmental 
Quality and vice-chair of the Water Committee of the 
Environmental Council of the States; Mr. Jeff Littlejohn, he is 
the deputy secretary for regulatory programs, Florida 
Department of Environmental Regulation; Mr. George Elmaraghy, 
chief, Division of Surface Water, Ohio Environmental Protection 
Agency, and member, Association of State Wetland Managers; Mr. 
William Creal, he is the chief of the Water Resources Division 
of the Michigan Department of Environmental Quality, and board 
member, Association of Clean Water Administrators; and Mr. Todd 
Ambs, president of River Network.
    And we will start this way. Welcome, Mr. Paylor, and the 
floor is yours.

TESTIMONY OF DAVID K. PAYLOR, DIRECTOR, VIRGINIA DEPARTMENT OF 
    ENVIRONMENTAL QUALITY, AND VICE-CHAIR, WATER COMMITTEE, 
  ENVIRONMENTAL COUNCIL OF THE STATES; JEFF LITTLEJOHN, P.E., 
DEPUTY SECRETARY FOR REGULATORY PROGRAMS, FLORIDA DEPARTMENT OF 
   ENVIRONMENTAL REGULATION; GEORGE ELMARAGHY, P.E., CHIEF, 
   DIVISION OF SURFACE WATER, OHIO ENVIRONMENTAL PROTECTION 
  AGENCY, AND MEMBER, ASSOCIATION OF STATE WETLAND MANAGERS; 
   WILLIAM CREAL, CHIEF, WATER RESOURCES DIVISION, MICHIGAN 
    DEPARTMENT OF ENVIRONMENTAL QUALITY, AND BOARD MEMBER, 
 ASSOCIATION OF CLEAN WATER ADMINISTRATORS; AND TODD L. AMBS, 
                    PRESIDENT, RIVER NETWORK

    Mr. Paylor. Thank you. Good morning, Mr. Chairman, members 
of the subcommittee. I am pleased to be here today to discuss 
what many of the States see as the benefits associated with 
State assumption of Section 404 of the Clean Water Act, and to 
recommend actions that would help remove some of the barriers 
to State assumption. My name is David Paylor, and I have been 
the director of the Virginia Department of Environmental 
Quality since 2006. I am also here representing the 
Environmental Council of the States, a nonpartisan, nonprofit 
organization which consists of the key environmental 
commissioners of the States and territories.
    In 2008, ECOS issued Resolution 08-3 supporting delegation 
of Section 404 responsibilities to States that are prepared to 
do so, and making recommendations to EPA to facilitate this 
process. We see a number of benefits to having the 404 program 
implemented by the States.
    Most States define their waters more broadly than the Clean 
Water Act, and include isolated wetlands, ephemeral streams, 
and ground water that are not under Federal jurisdiction. A 
State-run program would eliminate jurisdictional uncertainty, 
and provide a consistent and predictable definition of 
regulated waters.
    Similarly, a State-run program would provide a streamlined, 
one-stop permitting experience, which removes duplication and 
regulatory redundancy. A single regulatory agency implementing 
the rules would eliminate the potential confusion that can come 
from two regulatory bodies, and would provide for greater 
consistency in the application of regulatory requirements.
    The program could be administered by most States at 
significantly less cost. In Virginia, we currently estimate it 
would cost an additional $3 million per year in operating cost 
to assume the 404 program on top of our current duties. Our 
best estimate is that this program cost the Norfolk District of 
the Army Corps of Engineers $7.5 million per year to 
administer.
    States are often positioned to provide timely service to 
project applicants through a knowledge of the areas of proposed 
impact. ECOS has identified four primary barriers to State 
assumption. federally funding is not currently available for 
Section 404 implementation by the States. Other sections of the 
act, such as the wastewater discharge regulations, provide 
Federal funding for State implementation.
    In Virginia, this is our single largest impediment to our 
assumption of Section 404. There is uncertainty regarding the 
criteria EPA would use for assessing States' legal authorities 
and their assumption decision. EPA correctly requires that 
State authorities be sufficient to meet Federal requirements. 
But because of differences in State jurisdiction from their 
underlying constitutions and statutes, those criteria may vary 
from State to State, creating some uncertainty regarding EPA's 
expectations.
    Section 404 provides for no phased assumption option, which 
would allow States to transition toward full assumption. 
Similarly, Section 404 does not include an option for partial 
assumption by States. Partial assumption could be based on 
specific geographic areas, or certain types of activities.
    As I mentioned earlier, the States, through ECOS, support 
efforts to encourage Section 404 delegation to those States 
prepared to implement the program. As such, we make the 
following recommendations.
    U.S. Congress should take action to authorize and 
appropriate adequate fundings for States to assume the Section 
404 permitting program, should they choose to seek it. Based on 
Virginia's estimates, Federal funding for a State program could 
result in at least a 50-percent savings, and a consequent 
reduction in the cost borne by taxpayers.
    Encourage EPA to develop clear guidelines and processes for 
State assumption, which encourage States to apply for and 
assume regulatory responsibility for the program.
    And support of simplified and more flexible process for 
State assumption of the Section 404 program, including partial 
and phased options.
    The goal of protecting our Nation's wetlands and streams is 
critical to our future. It is a goal that can best be realized 
through a process that is consistent, efficient, and responsive 
to the unique features and qualities of the individual States. 
State assumption can provide a mechanism for individual States 
to realize enhanced water resource protection while providing a 
streamlined regulatory program with a single point of contact.
    Mr. Chairman and members of the subcommittee, I appreciate 
the opportunity to present my testimony to you today, and will 
be happy to answer any questions you may have.
    Mr. Gibbs. Now, before we move on, an oversight--I 
sincerely apologize--I didn't introduce our last witness. My 
problem is I broke my glasses last week, and I got these 
readers, and I am struggling here because when I look up with 
my glasses on, you are all blurry.
    But we have Mr. Todd Ambs. He is president of the River 
Network. And welcome.
    Go back to Mr. Littlejohn. The floor is yours.
    Mr. Littlejohn. Thank you, sir. Good morning, Chairman 
Gibbs, Ranking Member Bishop, other members of the 
subcommittee. I am Jeff Littlejohn, deputy secretary for the 
Florida Department of Environmental Protection. Our 
responsibilities include administering Florida's federally 
delegated programs under provisions of the Clean Water Act, 
Clean Air Act, Safe Drinking Water Act, and other Federal laws.
    In Florida we value our waters and wetlands and have 
protected them under State law since 1974 through integrated 
management of storm water, landscape alteration, and our State-
owned submerged lands. We do this because Floridians know our 
natural resources better than anyone else. But our commitment 
to safeguarding Florida's environment results in duplication 
with the U.S. Army Corps of Engineers and its Section 404 
wetlands program.
    This duplication of effort comes in spite of using joint 
permit applications with the Corps, implementing a State 
programmatic general permit from the Corps, and integrating 
Section 401 water quality certification and coastal zone 
management consistency into our State wetland permitting 
process.
    When Congress amended the Clean Water Act in 1977 to enable 
States to assume the 404 program, it had the clear intention of 
making that assumption possible. Unfortunately, obstacles 
remain 35 years later for Florida and 47 other States to 
accepting the full 404 program. Without changes, perhaps to 
Federal law, and certainly to the Federal review process, 
Florida and the Corps will continue issuing two permits for 
applicants who are only asking to do one thing. That surely was 
not Congress' intention.
    Requiring two permits for one project might make sense if 
the State and Corps were addressing different types of 
activities or achieving different outcomes. However, my staff 
just completed an analysis of Corps wetland permits recently 
issued in northeast Florida. Of 31 projects where the Corps and 
Florida issued a permit for the same activity, the wetland 
jurisdiction line was identical in all 31 instances. The 
permitted wetland impacts were similar, and Florida required 
about 50 percent more wetland mitigation, overall. This 
analysis at least suggests that Federal permits are not more 
extensive or more protective than Florida's. And if they are 
not, it is difficult to make the case that two permits are 
necessary.
    The primary barrier to Florida's full assumption of Section 
404 is that many tidal and other navigable waters subject to 
the Clean Water Act are also subject to Section 10 of the 
Rivers and Harbors Act, which cannot legally be assumed. These 
waters constitute a large and important part of Florida's 
aquatic systems, including coastal waters and public trust 
lands transferred to Florida at time of statehood. This 
prohibition negates many potential benefits of Section 404 
assumption.
    We absolutely respect the Corps of Engineers' vital and 
distinct role in maintaining navigation. However, by virtue of 
its sovereignty, Florida has significant proprietary powers, 
including the authority to maintain navigation. In fact, we 
have demonstrated, year after year, the ability to protect 
navigation as we are protecting aquatic resources, through 
comprehensive wetlands and coastal regulatory programs, and our 
federally approved coastal zone management program.
    Surely responsibilities can better be divided to take full 
advantage of Florida's proven abilities and the Corps' 
important oversight role. We are ready and eager to assume 
expanded authority over Section 10 waters under the Corps' 
watchful eye and guidance.
    A second barrier to assumption has been the uncertainty in 
the State and Federal roles in administering the Endangered 
Species Act. In 2010, EPA clarified that consultation under the 
ESA is not required before approval of a State 404 program. 
This was helpful, but not sufficient. Florida has robust State 
constitutional authority to protect listed species through the 
Florida Fish and Wildlife Conservation Commission, through 
which we coordinate all of our wetlands and coastal permitting. 
The Commission recently amended its rules to mirror the 
protections afforded to federally listed species. We believe we 
can demonstrate the necessary equivalency of Florida's program 
in this regard.
    During past consideration of Section 404 program assumption 
by Florida, questions have been raised regarding the 
equivalency of a number of aspects of our program to Federal 
law. The Clean Water Act requires that approved State programs 
have adequate authority to carry out the 404 program in a 
manner that is no less stringent than Federal requirements. 
This is a reasonable standard.
    Certainly Florida's laws, like those in other States, are 
not identical to Federal law. But that is not the test. In its 
review of our program, we need EPA to recognize Florida's 
combination of State constitutional, statutory, and proprietary 
authorities, along with its suite of rules, that combine to 
provide comprehensive management of the State's aquatic 
resources at least equivalent to Section 404, which itself 
rests primarily on the Federal obligation to protect interstate 
commerce.
    We are confident that States like Florida can demonstrate 
equivalency to Section 404, provided the reasonable standard of 
adequate authority to carry out the program is appropriately 
applied. We have proved this in our implementation of the 
Section 402 NPDES program for more than a decade. Whether in 
the context of our wetland delineation method, regulatory 
jurisdiction, protections for listed species, water quality 
standards, mitigation requirements, public participation, 
procedural rigor, or compliance and enforcement authority, 
Florida implements substantially equivalent--if not greater--
protections, with more extensive coverage for our aquatic 
resources.
    In summary, we believe Congress provided for State 
assumption of Section 404 because it recognized the additional 
strength that comprehensive State water and land use programs 
would bring to the program, and the virtues of a State-Federal 
partnership. Florida is fully committed to preserving its 
aquatic resources and will continue to carry out science-based, 
wide-ranging, publicly supported programs for wetland and water 
resource management. We hope, with Congress' support, that 
Florida and the Federal Government can realize the full 
potential of Section 404 program assumption to protect these 
resources and, at the same time, unburden the public of 
unnecessary bureaucracy and pointless costs. Thank you for the 
opportunity. I am happy to answer any questions you may have.
    Mr. Gibbs. Thank you.
    Mr. Elmaraghy, the floor is yours.
    Mr. Elmaraghy. Good morning, Chairman Gibbs, Ranking Member 
Bishop, and members of the subcommittee. I am George Elmaraghy, 
chief of the Division of Surface Water of the Ohio 
Environmental Protection Agency. I am grateful for the 
opportunity to speak on behalf of the State of Ohio and the 
Association of the State Wetland Managers regarding the State 
experiences in pursuing the assumption of Clean Water Act 
Section 404 permitting.
    In Ohio, the Corps of Engineers authorizes impacts to the 
water of the U.S. through Section 404 permits. Ohio EPA issues 
401 certificates for these permits, and then U.S. EPA provides 
oversight.
    Ohio, along with other States, is interested in assuming 
Section 404 permitting for the following reasons and benefits. 
One, the permitting process would be streamlined into one 
permit from one regulatory agency, thus reducing the regulatory 
uncertainty and burden for business in Ohio.
    Two, State regulatory staff are more aware of local 
development and local water resources issues.
    Three, State regulatory staff can better coordinate the 
issuance of 404 permits with other State-issued permits, such 
as air permits, NPDES permits, and storm water construction 
permits.
    And four, a simplified environmental permitting process 
would encourage investment in the State, leading to job 
creation.
    The States have had the opportunity to pursue assumption of 
Section 404 program since 1977. As of today, only two States 
have assumed permitting authority. Numerous other States have 
investigated assumption of the 404 program. However, these 
States have been unsuccessful. In contrast, 46 States have 
received NPDES permitting delegation. We need to learn from 
this success.
    From our perspective, there are four main obstacles: number 
one, lack of congressional mandate to delegate 404 authority to 
States; two, a cumbersome assumption process; three, lack of 
guidance from U.S. EPA in preparing an assumption package; and 
four, lack of program implementation program funding.
    We need to eliminate these obstacles to State Section 404 
program assumption by, one, simplifying the assumption process, 
an unworkable process that can be drawn out for several years. 
The Oregon experience is a good example that illustrates the 
difficulty of this process. Oregon started the assumption 
process more than 15 years ago, and has yet to receive 
authorization.
    Two, development of a joint U.S. EPA and Corps of Engineers 
guidance on how to prepare a 404 assumption package.
    Three, establish a pilot assumption project between the 
Corps of Engineers, U.S. EPA and a State to serve as an example 
for other interested States. Ohio volunteers to be this pilot 
State.
    Four, providing funding for preparing the assumption 
package by allowing States to use current wetland grants to 
fund assumption activities.
    And, number five, provide funding to implement the program 
upon assumption. This could be accomplished by establishing a 
mechanism to reallocate the funding currently used by the Corps 
of Engineers to authorize the States.
    Mr. Chairman and members of the subcommittee, thank you for 
this opportunity to share Ohio's perspective on the Section 404 
program assumption process. I have additional materials to be 
added to the record from the Association of State Wetland 
Managers. I am happy to answer any questions you may have. 
Thank you.
    Mr. Gibbs. Yes, we already accepted those additional 
materials.
    Mr. Elmaraghy. Thank you.
    Mr. Gibbs. Thank you. Mr. Creal, the floor is yours. 
Welcome.
    Mr. Creal. Thank you. Good morning, Chairman Gibbs and 
fellow committee members. I am Bill Creal. I am the chief of 
the Water Resources Division of Michigan, which is 300 
engineers and scientists that work on water resource issues in 
Michigan. I am testifying on behalf of both Michigan and the 
Association of Clean Water Administrators. With me today is my 
assistant division chief, Kim Fish. And between the two of us, 
we have over 60 years of administering Clean Water Act programs 
in the State of Michigan. Thank you for the opportunity to 
participate in this important discussion regarding Section 404 
of the Clean Water Act.
    Michigan is one of the two States to assume the Section 404 
program. We assumed this program 28 years ago. You are probably 
asking why would Michigan assume this program. Well, Michigan 
is defined by an abundance of water. We have borders with four 
of the five Great Lakes, which results in over 3,000 miles of 
coastal freshwater shoreline, the most freshwater shoreline of 
any State in the Nation. We also have over 11,000 inland lakes, 
more than any other State in the Nation. And we have 5.5 
million acres of wetlands in our State. It is important to 
wisely use these water resources.
    Since assuming the Section 404 program, we have issued over 
100,000 permits. And we issue about 4,000 to 5,000 permits 
every year. We know and understand what it takes for a State to 
run this program, and what the benefits are to a State.
    You have heard some of these benefits from the other 
members of this panel. We think these benefits include a clear 
definition of what is regulated waters and what are regulated 
activities. We don't have the confusion in Michigan that is on 
the national level on what are regulated waters. We make faster 
permit decisions. We have statutory State deadlines that drive 
us towards this. We have reduced the regulatory burden. We have 
consolidated permitting actions throughout the State. We have 
better access to decisionmakers. We have 10 district offices in 
Michigan, and we issue our permits in those district offices. 
We have more public oversight of our decisions, and we have a 
fair and impartial appeal process for those that aren't 
satisfied with our decisions. We have provided examples and 
further explanation in our written testimony of this.
    We know this can be a difficult program to run. We have 
seen the controversies over 28 years. But Michigan thinks it is 
worth it for States to assume. This support was demonstrated as 
recently as 2009. Our department has seen general fund 
reductions from $120 million of State funding down to $20 
million by 2009. This makes tough budget times in Michigan. In 
2009 our Governor proposed turning this program back to the 
Federal Government. But the regulated parties, including 
Realtors, home builders, manufacturers, the farming community, 
and the environmental groups and other stakeholders, prevented 
this from happening.
    However, we continue to face the funding issue for our 
program. We are saving the Federal Government over $5 million 
per year by running this program. Specific Federal funding is 
not provided to run this program. So, Michigan has saved the 
Federal Government quite a bit by running this program for 28 
years. We strongly recommend that you consider sharing some of 
these savings with the States that assume the Section 404 
program. This would assure that States are able to assume and 
keep this program.
    In our specific case, we propose that States like Michigan 
be eligible for up to $2 million per year in grants when they 
assume the program. We believe such a process can be put in 
place so there are real Federal budget savings, and States also 
receive some Federal funding to run this important program.
    Mr. Chairman, thank you for the opportunity to provide this 
testimony today. We look forward with--working with you as you 
continue to explore this issue. And I would be happy to answer 
any questions.
    Mr. Gibbs. Thank you.
    Mr. Ambs, welcome.
    Mr. Ambs. Thank you. Good morning, Chairman Gibbs and 
Ranking Member Bishop, members of the subcommittee. My name is 
Todd Ambs. As president of River Network, a national 
conservation organization, I work for an organization that for 
24 years has focused on helping the hundreds of river and 
watershed groups around this Nation to do their work better. In 
short, we work to feed the heart of the watershed movement, the 
hundreds of groups across our Nation that, though sometimes 
short on funds, are long on passion for protecting their home 
waters.
    But I offer my thoughts today with a primary focus on how 
the State of Wisconsin approaches these issues. My insight 
regarding this matter comes from working in the environmental 
field for more than 30 years, and from having the honor of 
serving as the water division administrator, the Wisconsin 
Department of Natural Resources, for 8 years, 2003 to 2010.
    I will stress three concepts in my brief oral remarks. One, 
as my former colleague from Michigan has already stated so 
eloquently, States can assume the responsibility for handling 
Section 401 of the Clean Water Act, and do it well. But they 
can only achieve that goal if they have adequate funding, solid 
staffing resources, and firm expertise in the water resources 
of their State. Michigan has been at it for 28 years. They 
built that program over time. Other States considering this 
path need to do so deliberately, and with a firm understanding 
of the responsibilities.
    That, to me, is what I hope is one of the take-aways from 
today's hearing. There are, no doubt, many reasons why only two 
States have assumed 404 jurisdiction, as others have noted, in 
the last 40 years, while 46 States are--the delegated entity 
for Section 402. But I believe that one of the main reasons is 
because this is a much harder program to manage. Issuing NPDES 
permits is pretty straightforward, once you get it set up. You 
are measuring effluent from the end of a pipe and making sure 
that the pollutants are below a certain number.
    When someone proposes to fill a wetland, it is a very case-
specific issue. In Wisconsin, we have at least a dozen 
different types of wetland communities, each with their own set 
of functional values, plant species, and place in the 
hydrologic cycle. If you make the wrong choice on a permit to 
fill one of these treasures, you have wiped 10,000 years of 
Mother Nature's work off the landscape. If a discharger in the 
402 program continues to operate under an old permit due to 
budget cuts, staffing vacancies or other circumstances, it is 
not ideal. But waterways can and are protected using the old 
permits.
    If budget cuts and staffing vacancies occur at the same 
time as there is pressure to approve a large number of dredge 
and fill permits, there is nothing to fall back on, especially 
if the State has assumed full responsibility for the program.
    My second point, though, is that there are other tools 
available, other than full assumption, if you want to save 
Government dollars, making the permitting system more 
efficient, and protect these special resources. That was the 
path that Wisconsin each time we looked at this question. 
Working more closely with the Army Corps, adopting general 
permits, digitizing wetland maps were all steps that we took, 
instead of seeking 404 assumption.
    And, as we noted in our response to the Wisconsin 
legislative auto bureau's audit of the program in 2007, ``We 
have investigated the feasibility of the State assuming the 
Federal 404 program in the past decade and again in response to 
the audit request. We continue to find the feasibility of 
assuming the program low, due to significant barriers that 
involve State law changes and lack of Federal funding available 
to the States for implementation.''
    The letter then went on into some detail regarding the 
steps being taken to streamline the permit application process, 
and I have actually got some of that detailed in the written 
testimony. As a result of those actions, and others since that 
time, the Wisconsin wetlands program was working well when I 
departed in 2010. As of 2010, 94 percent of all wetland permit 
applications were approved by the department. The time for 
processing a permit had fallen by more than two-thirds in the 
last decade. And no significant economic development projects 
had certainly been stopped because of onerous wetland 
determinations.
    The point here is not to in any way denigrate the efforts 
of Michigan or New Jersey, where State 404 assumption has 
occurred, or to suggest that efforts underway in States like 
Ohio and Oregon and others to move towards State assumption are 
without merit. What I am suggesting is that 404 assumption is 
far from the only tool available to States that wish to have a 
streamlined yet effective program to protect some of our most 
precious natural resources, our waters.
    Finally, a quick reminder about the importance of these 
resources and the impact that this program can have on these 
resources. Wetlands provide more than just habitat. They serve 
as nature's sponge, acting as flood control during high-water 
events. They filter out harmful pollutants that can help 
address serious water quality challenges. They release waters 
to parched ecosystems in times of drought. For these reasons 
and more, any effort to promote State-Federal coordination or, 
when appropriate, State assumption of responsibilities 
contained in Section 404 of the law, the most useful exercise--
but adequate funding, consistent State laws, transparent 
processes, and broad public and political support for taking 
charge of a program like this are key ingredients and important 
foundations if the exercise is to produce healthier water 
bodies in the Nation.
    I thank you for the opportunity to testify, and certainly 
look forward to working with you, and happy to answer any 
questions.
    Mr. Gibbs. Great, thank you. I will start off. I would like 
to maybe have questions--more of a discussion, I think. Because 
what I am hearing, we have issue of cost. I heard in testimony 
that--from Ohio and Florida--we can save some money if the 
States do it.
    What it comes down to me, though, is the service to the 
entities we serve, as public officials. And I know in Ohio--
correct me if I am wrong--the legislature actually stopped a 
move by Ohio EPA to move--is that correct, Mr.----
    Mr. Elmaraghy. Yes, Mr. Chairman. We were planning to 
introduce legislation to authorize the director to seek 
assumption of Section 404. And because of concern from some 
industries, we decided to reintroduce that bill later. And we 
are currently working with industry and the environmental 
groups to alleviate their concerns.
    Mr. Gibbs. OK. And then to follow up on that a little bit, 
I think Florida is an interesting example. Because my 
understanding in Florida, with Section 10, because you have so 
much navigable water that is related to the wetlands issue, 
you--I think, Mr. Littlejohn, you said in your testimony that 
if you took it over you could streamline it.
    Now, are you talking about areas that aren't interrelated 
with the Section 10, or would you be--Florida be interested in 
having to do--be--jurisdiction over the whole Section 10 
everything?
    Mr. Littlejohn. Thank you, Mr. Chairman. Florida would be 
interested in assuming Section 10. But, obviously, that would 
require an act of Congress.
    Mr. Gibbs. Yes.
    Mr. Littlejohn. However, I think that there is a reasonable 
compromise if we were to pursue Section 404 assumption and an 
expanded State programmatic general permit to cover more 
activities over traditionally navigable waters and adjacent 
wetlands. I think that could be a reasonable approach.
    Mr. Gibbs. OK. The other concern I have heard and read 
through--of course States, you know, currently do the 401 
permitting. And I think there is some concern that--some of our 
entities, the people that we serve, States doing the 404 
permitting. I heard some testimony about, you know, we could 
streamline it into one permit, essentially, if States were 
doing it. So almost 404 would replace the 401 if States take it 
over. What is the experience in Michigan with the customers you 
serve?
    Mr. Creal. Well, yes. We took that over. We don't issue the 
401 certs, because we issue the 404 permits. And the customers 
are very satisfied. We have a consolidated permitting process 
where we include a variety of State-required actions for the 
permittee under one permit and one permit fee. So we don't make 
them get numerous permits or pay numerous permit fees. But that 
has worked out excellent in Michigan.
    Mr. Gibbs. OK. I guess I will go back to Florida for a 
second, because I am just thinking of the Section 10. I realize 
we got--we will separate the 404 that is not related to the 
Section 10.
    But currently, anybody that is in that area--you say 
Florida is not really involved at all, then, or--how is the 
401's coming in? Explain to me how that works, then.
    Mr. Littlejohn. Yes, sir, Mr. Chairman. The State has a 401 
program. And so, if the Corps of Engineers issues a permit over 
traditional navigable waters or adjacent wetlands, the State is 
also issuing, through our own wetland permitting program, the 
Section 401 water quality certification, as well as our coastal 
zone management, consistency determination.
    But even within Section 10 waters and adjacent wetlands, 
the State does authorize some activities on behalf of the Corps 
through our State programmatic general permit. Our concern is--
and one of the reasons why I am advocating for an expanded role 
in Section 10 waters--is that we are seeing the activities that 
we are allowed to authorize on behalf of the Corps shrink, or 
become eroded over time.
    And just for example, we have been implementing an SPGP for 
the Corps since 1995. And we saw that authority expand 
significantly between 1995 and 1997, to the point where the 
State of Florida could essentially authorize the vast majority 
of Corps nationwide permits over Section 10, traditional 
navigable waters and adjacent wetlands, all throughout Florida. 
But that authority has been shrinking since then. And in 2006, 
when our most recent SPGP was reauthorized, there are only four 
types of activities that we can issue on behalf of the Corps.
    Mr. Gibbs. OK. I am going to go over to Mr. Paylor from 
Virginia. I think in your testimony you stated that in the 
Norfolk Army Corps division you could save $7.5 million with 
the change?
    Mr. Paylor. It would be--excuse me, Mr. Chairman. Yes, it 
would be--they currently spend, by our estimate, $7.5 million. 
It would cost us three. So the saving----
    Mr. Gibbs. OK. I had one more question for Mr. Creal. The 
ranking member, in his opening statement, talked about how the 
permitting was so slow in Michigan and the two States that have 
adopted it, Michigan and, I believe, New Jersey. And I think I 
saw in your statement--I think I got it here--Michigan's 
processing is subject to deadlines mandated by State statute, 
and has frequently made permitting decisions on individual 
permits weeks or months sooner than the Army Corps of 
Engineers. However, decisions on general permits, which are 
smaller, routine projects, are about the same.
    Could you just expand a little bit on what is happening, in 
your experience, you know, serving our customers out there, 
getting their permits?
    Mr. Creal. Sure. And we think that is the way it is. In the 
routine, general permits, which are a fair number of the 
permits, it is about the same. But when we get into the 
individual permits that are more complicated, we have statutory 
deadlines that are put in place by our State legislature, and 
we operate under those, 90 days or 120 days. And so we are 
moving to delineate the wetlands very rapidly, and make our 
permit decisions. We think that we do it much more rapidly than 
the Army Corps of Engineers. And we have some comparisons when 
we deal with the----
    Mr. Gibbs. Well, that was the next point. I might just stop 
you right there and ask from the other States what time 
periods--apples to apples here for individual permits--that is 
happening from the Army Corps to get those permits done. You 
say you are by State statute in Michigan no more than 90 to 120 
days?
    Mr. Creal. Yes.
    Mr. Gibbs. Anybody else want to respond? What is happening 
in Virginia?
    Mr. Paylor. Mr. Chairman, our statutory requirement is 120 
days. The Army Corps, many cases, they are as fast as that. But 
they have no deadlines, and we have seen permits take over a 
year, year-and-a-half, to be processed.
    Mr. Littlejohn. Mr. Chairman, in Florida, since 1995, our 
statutory deadline has been 90 days to review wetland permits. 
And just this last legislative session our review time was 
reduced from 90 to 60 days. And that was partly in response to 
our increased efficiencies in reducing our average processing 
time. And we are down to about 47 days for our average time to 
process a wetland permit in Florida.
    Mr. Gibbs. I am confused here. The Army Corps is the one 
that is doing it.
    Mr. Littlejohn. Sir, I mean the State wetland permit. We 
have our own wetland permit program that mirrors that of the 
Corps of Engineers program. And our program satisfies the 401 
water quality certification requirement----
    Mr. Gibbs. OK.
    Mr. Littlejohn [continuing]. And the coastal zone 
management requirement. It is--in comparing our permit 
decisions to the Corps permit decisions, we are finding the 
exact same wetland delineation and----
    Mr. Gibbs. OK. How long is it taking the Corps to do it?
    Mr. Littlejohn. I see. I misunderstood your question.
    Mr. Gibbs. Yes.
    Mr. Littlejohn. I don't have specific data for within 
Florida on the average Corps individual permit. But I am very 
confident that it greatly exceeds 47 days.
    Mr. Elmaraghy. In Ohio, for the 401, we have a regulatory 
deadline of 180 days. However, we have imposed our own internal 
deadline of 120 days and we are meeting this 120 days 
regularly.
    For the Corps of Engineers, of course they have to take 
more than 180 days or 120 days, because they have to wait for 
us to issue the 401 before they act. So just the fact that 
having two agencies dealing with the same project definitely 
will make it longer to--for the applicant to get the final 
permit and start construction.
    Mr. Gibbs. OK.
    Mr. Elmaraghy. Generally, the Corps maybe takes an average 
of around 1 year. I don't have----
    Mr. Gibbs. OK. That is what I wanted to know.
    Mr. Elmaraghy. Yes, I don't have really----
    Mr. Gibbs. I will stop. I think I have used up plenty of my 
time, and I want to----
    Mr. Elmaraghy. OK.
    Mr. Gibbs [continuing]. Let Mr. Bishop have his turn.
    Mr. Bishop. Thank you, Mr. Chairman. Just on this subject, 
just--I am not going to prolong the discussion. Just the Corps 
data shows that 91 percent of general permit decisions are made 
within 60 days, 91 percent. And individual permit decisions, 71 
percent are made within 120 days.
    I--as I mentioned in my opening statement, I am very 
concerned about the looming possibility of something that none 
of us ever thought would be this real a possibility, and that 
is the sequestration that exists in current law that will go 
into effect on January 2nd if we do not find ways to reduce the 
deficit by $1.2 trillion.
    Current law suggests that the deficit--pardon me, the 
sequestration--would be split 50/50 between defense and 
nondefense spending. That would yield cuts ranging anywhere 
from 7 percent to 9 percent for all accounts, all accounts in 
what we call the domestic discretionary budget. Such a cut 
would reduce funding in the Clean Water State Revolving Fund by 
approximately $120 million. It would cut $75 million from the 
Drinking Water State Revolving Fund, and it would cut an 
estimated $20 million from the Section 106 program.
    I will also tell you that the House of Representatives has 
voted twice to turn off the sequester for defense spending, and 
essentially load all of the sequester onto what we call 
nondefense discretionary, which would essentially double those 
amounts.
    So, my question is how--what impact would these kinds of 
cuts have on the ability of your States to protect water 
quality and drinking quality, if the State were to, in effect--
pardon me--if the Federal Government were, in effect, to walk 
off the field to the extent of the numbers I am talking about? 
What impact would it have on the States? How would the States 
accommodate that? Would the States simply be able--be forced to 
do less? Would you divert expenses from other areas of your 
budget to cover this, given the priorities?
    So, Mr. Paylor, I will start with you, from Virginia.
    Mr. Paylor. Thank you, Mr. Chairman--Mr. Bishop. We would 
set priorities, and we would likely have to divert monies from 
one section to another. For example, we would likely do less 
water quality monitoring, and we may, in fact, have to have a 
smaller compliance presence. But it would be certainly our top 
priority to make sure that all those facilities operating in 
the Commonwealth who were regulated had their permits with 
clear requirements of what it took to protect our water 
quality.
    Mr. Bishop. OK. Mr. Littlejohn?
    Mr. Littlejohn. Ranking Member Bishop, in Florida it has 
been my priority over the last year-and-a-half since I have had 
this job, to plan for ultimately not having to rely on Federal 
funding in order to run our regulatory programs.
    So, we have a lot of programs that are completely State-
funded. And I think the impact of significantly reduced or even 
no funding from the EPA could be absorbed by Florida.
    Mr. Bishop. At the risk of being a wise ass, we should--we 
have to cut funding everywhere in this legislature. So we will 
take note of Florida's position.
    [Laughter.]
    Mr. Bishop. I am teasing. I am teasing. Thank you.
    Mr. Littlejohn. In exchange for the 404 program?
    [Laughter.]
    Mr. Elmaraghy. Twenty-five percent of our budget is coming 
from Federal money. And if we have cuts in this portion of our 
funding, definitely we need to establish priority and see how 
we can run effective programs with less funding.
    But I see that the effect of cuts in the Federal money will 
require us to take a look at our resources on the Federal level 
and the State level and to find better ways to do our programs. 
As mentioned here by my colleagues in Ohio, if we took over the 
404 program, the Federal Government will be saving $3 million. 
So this kind of savings will be needed to deal with the issues 
in the budget on the Federal level. And it will be a good idea 
to divert part of this savings to the States which volunteer to 
assume the 404 program.
    Mr. Bishop. OK, thank you. Mr. Creal?
    Mr. Creal. Yes. We are still trying to understand exactly 
where the cuts in sequestration would occur, and what impacts 
would happen in Michigan. I would like to note, though, that 
Michigan understood back in 2002 that State Revolving Fund cuts 
were coming in that program, and Michigan passed Proposition 2 
in that year which set aside State bonding authority for--to 
help cover it if we lost that infrastructure funding. And we 
are at the point of putting reforms in place through our 
legislators right now to spend that money that we haven't spent 
yet for State-funded State Revolving Fund.
    So, we had anticipated that State Revolving Fund would 
achieve cuts in the wastewater side back in 2002. And Michigan 
voters responded with a way to deal with that.
    Mr. Bishop. OK.
    Mr. Creal. But we are still not clear where the 
sequestration--and I know that it is all being worked out, but 
we are very concerned about the impacts from it.
    Mr. Bishop. Thank you. Mr. Ambs?
    Mr. Ambs. Perhaps this is the benefit of no longer being 
employed by the State. I think the cuts in Wisconsin will be 
devastating. We have significant difficulties managing programs 
today. We had significant difficulties managing the delegated 
programs. When I was there we had a D-delegation agreement with 
EPA--region five, specifically--on managing the Safe Drinking 
Water Act, pieces of the Safe Drinking Water Act program.
    A number of States--and certainly Wisconsin--are up against 
it, in terms of very, very dire circumstances. And having to, 
every day--used to make no bones about it--every day we had to 
make choices about which State or Federal laws we were going to 
enforce more than others, because there just aren't enough 
resources. And the further we cut those resources--the 
challenges don't go away. The problems that are out there don't 
go away if the funding does.
    Mr. Bishop. Thank you. I am sure I have exhausted my time. 
Thank you all very much.
    Mr. Gibbs. Mr. Duncan.
    Mr. Duncan. Well, thank you, Mr. Chairman. Mr. Creal, you 
mentioned that the State of Michigan has 10 offices located 
across the State. How many offices does the Army Corps have, or 
did it have before the State assumed this program, do you know?
    Mr. Creal. I am being told they had four offices.
    Mr. Duncan. And you say that you can issue your permits a 
lot quicker than the Army Corps. And I heard some mention that 
the Army Corps has to wait on the States on the--for part of 
their process. Is their delay just because they have to wait on 
the State? Or what could they learn from your ability to issue 
your permits much quicker?
    And also, you mentioned this cut in your funding from $120 
million to $20 million. How have you made that up? Have you 
gotten any money from other sources to alleviate that cut, or--
--
    Mr. Creal. Yes, sir. That is several questions.
    Mr. Duncan. Yes, let me----
    Mr. Creal. Well, I think the 401 that you are hearing from 
States like Ohio, that is a little different than Michigan. 
Where we can tell you we have the experience in comparison with 
the Corps is in waters where we and the Corps both issue 
permits. And we had a----
    Mr. Duncan. Oh, OK.
    Mr. Creal. And some of that is the----
    Mr. Duncan. You are talking about the 404.
    Mr. Creal. The 404. And we are issuing a State permit, and 
the Corps is issuing a Federal permit. We had a power company 
that wants to put a nuclear power plant on Lake Erie. And part 
of this comes back to how you delineate wetlands, and the 
confusion on the Federal level and complications on how you do 
that.
    We have a much simpler way to do it in Michigan, on how to 
delineate them. We went--for that Federal power plant, we 
delineated the wetlands in 45 days, and it took the Army Corps 
of Engineers over 700 days to do the wetland delineation. 
Direct comparison. So we have examples like that that we can 
point to, where we compare ourselves to where the Army Corps 
is. Plus we have the statutory deadlines for issuing our 
permits that aren't there on the Federal level. So, we can draw 
direct comparisons that way.
    Regarding how we have made up the funding, what the State 
has resorted to was we had put in permit fees in various 
programs, like under the NPDES permit program. We never had 
permit fees in place before 2004. And a result of continued 
erosion to the general funds, we had to make up some of that 
from putting permit fees in place for municipalities and 
industries and storm water entities to cover some of the 
general fund shortfall.
    But there has also been a corresponding reduction in staff 
as we have gone along, too. And as you heard Mr. Ambs talk 
about, we have reduced things like our permitting--ability to 
process our permits and do inspections and take compliance 
activities.
    We have also had to gain efficiencies through technology, 
which we continue to do. So we tried to make up this through a 
variety of mechanisms. It has been a struggle.
    Mr. Duncan. OK, thank you. Mr. Elmaraghy, is it accurate 
that Oregon has been working since 1995 to try to assume the 
404 program there? And why is this taking so long? And why have 
only two States taken it over thus far, if that is correct?
    Mr. Elmaraghy. Yes. That is the story I hear about Oregon. 
They started to try to take over this program some time in the 
1990s. And of course, the difficulty of getting this 
assumption, as I mentioned in my testimony, lack of funding, 
the process to get assumption is very long, and we don't have 
good guidelines on how to assume the program. And I assume 
Oregon is facing the same problems we have in Ohio right now.
    Mr. Duncan. Well, I read someplace that 46 States handle 
the NPDES program. Why is it so much more complicated or 
difficult or time consuming to assume the 404 program as each 
of you have said would save millions of dollars?
    Mr. Elmaraghy. My feeling is the reason 46 States assumed 
the 402 program is because it comes with funding. And also, as 
I recall, early, after the Clean Water Act was enacted, there 
was a mandate for U.S. EPA to delegate this program to the 
States. And we need to learn about what happened to delegate 
the 402 program in order to find out how it happened and how we 
can apply the same experience for 404.
    But the funding and this mandate which U.S. EPA was under 
to delegate this program to the States is the major reason.
    Mr. Duncan. All right. My time is up. Thank you very much.
    Mr. Gibbs. Representative Napolitano, do you have a 
question?
    Mrs. Napolitano. Yes, Mr. Chair, I do. And just following 
up on that, 402 is a mandate?
    Mr. Elmaraghy. It is----
    Mrs. Napolitano. A general mandate?
    Mr. Elmaraghy. At one time after the enactment of the Clean 
Water Act, Congress apparently pushed U.S. EPA to delegate this 
program to the States.
    Mrs. Napolitano. So it is funded, but--it is at least 
partially funded, fully funded by the Feds?
    Mr. Elmaraghy. We have the 106 program which is funded 
the--like the NPDES program, but less monitoring and so on. I 
will say, like, part of our NPDES permit program funded 
federally and the rest come from the State.
    Mrs. Napolitano. So, in essence, if the 404 were to be 
taken on and followed more or less the same type of area of 
funding, then the States would be able to take it on?
    Mr. Elmaraghy. If we have some source of funding from the 
Federal Government, it will encourage the State to do it. 
However, Ohio feels like the advantage of taking 404 assumption 
is so great that we are willing to do it even without further 
funding.
    I give you an example. In the Department of Transportation 
Ohio, they have a lot of projects which require 404 permits. 
And in order to expedite their projects, they are supporting us 
to take assumption--and, as a matter of fact, they are willing 
to partially fund the 404 program.
    Mrs. Napolitano. OK. But--and I understand that. However, 
the Corps is a national program. So it is a little harder--and 
I know they have regional offices that take care of their own 
local requests. But any State can do their own; they don't have 
to worry about other than their own. So there might be a 
difference there in the delivery, besides you have to get 
permitting from them, they have to get some permitting from 
you, I understand.
    Mr. Elmaraghy. Yes, like----
    Mrs. Napolitano. Right.
    Mr. Elmaraghy [continuing]. They have to get a 404 permit, 
regardless. So you are eliminating--from two permits to one 
permit.
    Mrs. Napolitano. Right. Well----
    Mr. Elmaraghy. Also--yes, that is what simplifies the 
process.
    Mrs. Napolitano. Question, then. Why are the coastal States 
reluctant to administer the 404 program? And what can be done? 
Or should we incentivize the coastal States to administer that 
404 program? Anybody?
    Mr. Paylor. As we have said in Virginia, we believe that we 
could do it for--in the range of half the cost. If those 
dollars that are going towards that program right now through 
the Army Corps of Engineers, if a portion of those could be 
converted to EPA dollars for grant funding, it would end up in 
Virginia still being only partially federally funded, and there 
would be at least half of that that would be fee or otherwise 
funded.
    Mrs. Napolitano. Which brings up the point that you--there 
are some States that do follow and do support their own 
funding. But each State is different. Would there be a 
requirement, then, for the Feds to be able to have a followup 
and ensure that the program is being carried out properly? 
Anybody?
    Mr. Paylor. Absolutely. All of the programs that we have 
that are delegated by EPA to us have an auditing function. And 
there is a fairly robust dialogue that goes along with those 
programs with EPA, to assure that we are meeting Federal 
guidelines.
    Mrs. Napolitano. Mr. Ambs?
    Mr. Ambs. Yes, just agree with that. And, in fact, EPA, I 
know, is very active in reviewing permits that are issued in 
both Michigan and New Jersey.
    However, one of the things you always have to be concerned 
about is what happens in terms of the States having strong 
enough laws on the books to be consistent, at least as 
stringent as Federal law. And, you know, Wisconsin is a good 
example of where you are always going to have these challenges 
if you have more States that go to assumption.
    A few years ago, if we had chosen to move toward 404 
assumption, I thought we were well positioned to be able to say 
we had a program that was as stringent as the Federal 
Government. Legislation was just passed this year in Wisconsin 
that I believe no longer makes that the case in Wisconsin. Way 
too much flexibility in the--so you just got to be very careful 
that those States maintain strong State----
    Mrs. Napolitano. Thank you, Mr. Ambs. That is a point, 
because each State is different. They have different priorities 
and, of course, they have different budget impacts. And you are 
right, the laws may not be the same to protect as there are 
now.
    So, Mr. Chair, with that I yield back. I may have some 
questions for the record.
    Mr. Gibbs. Representative--Chip, go ahead.
    Mr. Cravaack. Thank you, Mr. Chair. Mr. Creal, I had a 
question in regards to listening to your testimony and Mr. 
Ambs's testimony. Mr. Ambs is basically saying he can't do it 
right in Virginia without Federal funding. Do you do it right 
in Michigan?
    Mr. Creal. We believe we do it right in Michigan. And I 
would stress that EPA does provide us very good oversight on 
our program. And they have the ability to object to our issuing 
of the permit. And if we can't resolve their objections, then 
the permitting process does revert back to the Army Corps of 
Engineers. We have a set timeframe to resolve those.
    But we think we have the statutes in place. We check very 
closely with EPA to make sure we are consistent with Federal 
laws, and that our State programs are adequately administered, 
and we have done that for 28 years now.
    Mr. Cravaack. So you think your State legislators and your 
Governors take care of your water pretty well?
    Mr. Creal. Yes, sir.
    Mr. Cravaack. And your wetlands pretty well?
    Mr. Creal. Yes, sir.
    Mr. Cravaack. Would I get a concurrence with all the 
Members at the table, except for Wisconsin? Why can't you do it 
well in Wisconsin?
    Mr. Ambs. Well, as I say, as it relates to the wetland 
regulations, I just think in terms of being as stringent as 
Federal law, this legislation that was passed this year--which 
I actually testified in opposition to--I thought provided too 
much flexibility and too much ability for applicants to be able 
to fill in the wetlands of the State. So----
    Mr. Cravaack. So, philosophically, what you are saying then 
is you think that these gentlemen aren't going to be able to 
take care of their States' waters as they should?
    Mr. Ambs. No. What I am saying is that in each individual 
State you are going to have to continually--the more States 
that assume the 404 program, you are going to have to continue 
to be very vigilant to make sure that they are as stringent 
as--to meet the requirements under the Clean Water Act.
    Mr. Cravaack. Well, my----
    Mr. Ambs. And I would agree. I grew up in Michigan. I would 
agree that the State of Michigan is doing a fine job with it. 
But I am just saying those pressures are always going to be 
there at the State level. And they are--they tend to be, when 
you are dealing with dredge and fill permits, they tend to be--
my experience, 8 years as the lead regulator for the water 
division in Wisconsin--they tend to be much more intense, 
pronounced, focused, than they are in the NPDES permit.
    Mr. Cravaack. But at the same time, as I am understanding, 
is that you still have to comply with the Army Corps of 
Engineer and the EPA. Is that correct?
    Mr. Creal. It is EPA.
    Mr. Cravaack. EPA.
    Mr. Creal. When we have the permit program in Michigan, it 
is EPA that reviews our programs and can object or----
    Mr. Cravaack. So you are maintaining Federal standards, it 
is just that you are implementing the program and streamlining 
the process. Am I correct?
    Mr. Elmaraghy. Yes. As a matter of fact, Ohio will not be 
able to get delegation for a 404 program unless we show U.S. 
EPA that our requirements are as stringent as the Federal 
requirement. And in the NPDES permit program, our requirements, 
most of the time are more stringent than the Federal 
requirements to account for special features in Ohio, and 
special conditions in Ohio.
    Mr. Cravaack. I appreciate you bringing--I am from the land 
of 10,000 lakes, or 100,000 mosquitos, whatever you want to 
say.
    [Laughter.]
    Mr. Cravaack. But we--from Minnesota, we actually have 
higher State laws, requirements, than we do Federal laws. So 
our State laws actually are more stringent at times than the 
Federal laws themselves, but we still must maintain the Federal 
compliance.
    So, even though you have the 404 permitting process 
authority, you should--you would also be maintaining the 
Federal standard. In essence, what we are doing is streamlining 
the system so that we are able to cut out some of the 
bureaucracy associated with it, so that you can get the permits 
to the people that need them as quickly as possible.
    Mr. Paylor, you said that you would have to make--you know, 
if you do lose some funding, you have to make some type of 
priority settings. Now, help me understand this. A lot of the 
companies that I know--we are big in mining, for example--they 
regulate their own water. I mean they will make sure that they 
stay within compliance, because they know that, you know, 
somebody is going to be coming around checking on them, 
obviously.
    But more importantly, we live in these communities. These 
are our homes that directly affect our water that our kids 
drink. So they are doing it because they want to be a good 
citizen and taking care of our own natural resources. But can 
you comment on that?
    Mr. Paylor. I have no disagreement with that comment, 
whatsoever. We have a pretty high compliance rate with all of 
our facilities in Virginia. We do, in fact, periodically show 
up to make sure that things are proceeding according to the 
permit. But I absolutely agree with your statement.
    Mr. Cravaack. A lot of these companies want to be good 
citizens because, quite frankly, we live there. This is our 
home. These are our counties and our State.
    So, I am out of time, Mr. Chairman. I will yield back. 
Thank you for your answers.
    Mr. Gibbs. Thank you. I want to follow up a little bit. We 
had a lot of discussion--I know, Mr. Elmaraghy, from Ohio, and 
I am from Ohio, so I am going to ask you a couple more 
questions because you made some points--made sense about 
streamlining the process, staff local, and you know, and I am 
all for more local control.
    You said--in your last question you said that on the 401 
permitting, under State statute, you have so many days to have 
to get done--just what----
    Mr. Elmaraghy. 180 days.
    Mr. Gibbs. 180 days. Are you meeting--I know it is the law, 
but are they--are you meeting that?
    Mr. Elmaraghy. We imposed an internal deadline for us, 
which is 120 days. We feel that these permits are needed to 
create jobs. And it is our priority to protect the environment 
and to create jobs in the same time. So we feel like it is 
important for us to expedite these permits for all of us.
    Mr. Gibbs. And it is actually happening.
    Mr. Elmaraghy. Actually happening in 120 days. As of 
yesterday, there is no permit pending in Ohio more than 120 
days.
    Mr. Gibbs. OK. Was that a substantial improvement in the 
last couple years because you have been working at that, or 
where was it before that?
    Mr. Elmaraghy. Yes. Two or three years ago we had a 
backlog, and some of the permits were pending more than 180 
days. But we felt that is a very high priority for us, and that 
is why we started to pay attention to try to streamline the 
process----
    Mr. Gibbs. Now, I guess----
    Mr. Elmaraghy [continuing]. Reduce the number of days 
needed to get the permit.
    Mr. Gibbs. OK. Now, my understanding, the--when an entity 
comes in here and, you know, applies for permits 404 and 401, 
is it that 401 has to happen first? Did I hear that? Before the 
404 process starts? Is that correct?
    Mr. Elmaraghy. I think the applicant needs to apply for a 
404 first, and then come with the 401 application.
    Mr. Gibbs. But the 401--what happened before the 404 would 
be approved by the Army Corps?
    Mr. Elmaraghy. Yes, that is true.
    Mr. Gibbs. They can't be concurrently--or--so the 401 
happens and then the Army Corps would start their process on 
the 404?
    Mr. Elmaraghy. I think they will start maybe with a review 
concurrently, but they cannot issue their 404 permit before 
they have the 401 permit.
    Mr. Gibbs. OK. Go ahead.
    Mr. Littlejohn. Mr. Chairman, in Florida, the arrangement 
we have with the Corps of Engineers is we implemented what we 
call the joint permit application process, where the Corps and 
the State have agreed to use the same application form. And an 
applicant can submit an application to either the DEP or the 
Corps of Engineers and, by interagency agreement, we distribute 
copies of that application to the other agency.
    So, we do process them concurrently. But the Corps of 
Engineers, before they can issue their permit, they require our 
State water quality certification, that 401 certification, from 
Florida. So we do have to issue before them. We try to do it as 
concurrently as----
    Mr. Gibbs. Well, you see where I am going with this. I want 
to make sure that we are, as public officials, doing due 
diligence so that the entities who are applying--because you 
are right, it is all about job creation. And the longer it 
takes to get permits done because of bureaucratic red tape--and 
so that is what this hearing is really all about, to figure 
out, you know, how we can do it better, you know, we can 
streamline it.
    And so, that is why I was wanting to know, you know, what 
the process really is. And then also, so we can get, I think, 
apples to apples comparison, because there has been a little--
you know, from different States, on what Army Corps--how many 
days it has been, and the 401, to get that all factored in. So 
that is what I am trying to get a handle on.
    So I know, Mr. Creal, when you talked about the--I think it 
was you--do it a lot faster, I just want to make sure that we 
are counting the days right when the Army Corps takes over.
    So if--OK, if I came in and applied for a 404 and a 401 
permit, OK, and start the clock counting, OK. And in Ohio, got 
to get it done in 120 days. And the Corps can't do it, issue 
the 404, until after the 401 is done, OK, how fast then would 
we expect the Corps to be able to do it if I came in and 
applied for both those permits the same day? Would I, as an 
entity, expect the Corps to be able to have it done within 30 
days after the 401 was issued? Or is there more lag?
    I don't know who wants to--what is happening? What is, you 
know, happening out there in the field?
    Mr. Elmaraghy. Yes. There is a way we do it in Ohio. We 
require the applicant to submit evidence that they already 
submitted as a 404 permit application. But before the applicant 
does the application, the Corps needs to do jurisdictional 
determination and the wetland delineation. So a lot of legwork 
needs to be done before you submit the application.
    Mr. Gibbs. Mr. Creal?
    Mr. Creal. Yes. In Michigan we run a consolidated permit 
application where they submit one application and then the 
State processes it. And if--we let the Corps know if they--you 
know, that we have the permits, and if they need to process a 
permit also. But--and we have the statutory deadlines, 90 days 
with a wetland permit and 120 days with--that deals with 
streams and lakes.
    One of the--some of the confusion that results, though, is 
we understand that the Corps counts time only after wetland 
delineation and public noticing are done, whereas Michigan 
counts the time from the day we receive an application. So that 
is when our 90-day clock and 120-day clock starts. So we are 
confident we are making decisions and issuing permits faster, 
especially on the complicated, large projects that we are 
dealing with, and the Army Corps of Engineers is.
    Mr. Gibbs. OK. OK, I guess that is--Mr. Shuster?
    Mr. Shuster. Yes, sir. I am sorry, I was down in a hearing 
with Chairman Mica. And you may have talked about this 
somewhat, but I would just like to get a reaction from the 
various States on the general permitting process.
    The Corps has decided to expand--when you take the stream 
crossings from a category 1 to a category 3--and in 
Pennsylvania it has caused tremendous delays in the permitting 
process. And in fact, we can't figure out the reason why they 
did it, except to give the Corps more work, justify why they 
are there, because the Pennsylvania Department of Environmental 
Protection for years--for 50 years or so or more--has done this 
with little to no incident. And now we have got an expanded 
Corps review process again slowing things down.
    So, in general permitting, on pipelines especially, can you 
just comment on what your experience has been over the past 
couple of years with the Corps?
    Mr. Paylor. Mr. Chairman, I would agree with Mr. Creal's 
comments, that one of the delays can be how long it takes after 
an applicant is ready to get a delineation in place. I would 
say that for the simpler applications there is not a great deal 
of delay between us and the Corps. The complicated 
applications, there can be, you know, a significant multimonth 
delay beyond----
    Mr. Shuster. Right.
    Mr. Paylor [continuing]. Beyond the time that the State is 
able to act.
    Mr. Shuster. Mr. Littlejohn.
    Mr. Littlejohn. Mr. Shuster, in Florida I believe that the 
Corps is still making a lot of effort to try to create new 
general permits, to try to streamline activities.
    However, there has been an erosion of the general permit 
that the Corps issued to the State to act on its behalf, and it 
is called the State programmatic general permit.
    Mr. Shuster. Right.
    Mr. Littlejohn. And since--in 2006, before the most recent 
SPGP renewal, we had authority to act on behalf of the Corps 
for nearly all of their regional general permits in the State 
of Florida and the nationwide permits that were issued in the 
State of Florida. And so we issued a significant number of 
authorizations on behalf of the Corps, including in Section 10, 
traditional navigable waters and adjacent wetlands.
    But at the last renewal, the scope of authority under that 
general permit granted to the State of Florida was 
significantly reduced. And I am afraid that--and I hesitate to 
speak on behalf of the Corps--I think that they are probably 
reacting to growing concerns from other Federal commenting 
agencies that these general permit authorities were too broad. 
And so they were essentially requested to constrict them back 
to a much smaller----
    Mr. Shuster. But what was the history? I mean did you have 
incidents? Did you----
    Mr. Littlejohn. Not that I am aware of, sir.
    Mr. Shuster. That is--so the evidence is you were doing a 
fine job, and with no incidents or very few. So--OK.
    Mr. Littlejohn. No, sir. I don't--I have asked them during 
discussions about once again expanding our State programmatic 
general permit. If we can establish some way to audit the 
decisions that we make so they would get more comfortable--
because I think there is just uncertainty that whatever the 
State is doing, they don't have enough oversight over.
    Mr. Shuster. Even though you have been doing a great job, 
in your opinion--and probably mine, too. OK.
    Yes, sir?
    Mr. Elmaraghy. In Ohio, we don't have a State programmatic 
general permit. However, we have a nationwide permit, which is 
really making things great for a project which does not have a 
big impact. But that is something we need to explore if we can 
use the State programmatic general permit to streamline our 
program. Something we need to do.
    Mr. Shuster. And the Utica, as it starts to come into play 
more and more in Ohio, it is going to be something you want 
to----
    Mr. Elmaraghy. Sure.
    Mr. Shuster [continuing]. Get that oil and gas out of the 
ground as quick as possible----
    Mr. Elmaraghy. Sure.
    Mr. Shuster [continuing]. To create jobs, and----
    Mr. Elmaraghy. But a State programmatic general permit does 
not resolve all the issues. You still have two Government 
agencies involved in the same project.
    Mr. Shuster. Right.
    Mr. Elmaraghy. And there--Federal involvement in the 402 
programs, NPDES permit program. And especially the enforcement. 
Any time you have joint enforcement between Ohio EPA and the 
U.S. EPA, some of the cases took 10 years, like Akron.
    Mr. Shuster. Right.
    Mr. Elmaraghy. Akron, we have 10 years of litigation 
without settling the case. It is just any time you involve more 
players the process becomes more complicated and takes longer.
    Mr. Shuster. Right.
    Mr. Elmaraghy. That is just as simple as that.
    Mr. Shuster. Mr. Creal?
    Mr. Creal. I would just like to note that Michigan issues 
the pipeline permits, not the Corps of Engineers in Michigan, 
and we have done a very good job of doing that.
    We have a complication, though. We had the Enbridge 
Pipeline break in 2010, about a million gallons of crude oil 
spilled into the Kalamazoo River. We are still working with EPA 
and Enbridge to clean that up, which has made our public very 
sensitive to pipeline permits and very aware of the easements 
that the pipeline companies have. Enbridge is in the process 
now of replacing that pipeline, which cuts across southern 
Michigan. And a lot of residents are very sensitive and much 
more knowledgeable than they were 2 years ago about where 
pipelines are in Michigan.
    Mr. Shuster. OK, thank you. Mr. Ambs, if you have a--if the 
chairman will indulge for another----
    Mr. Ambs. Thank you. Yes, just quickly, as Mr. Creal said, 
we also had some issues with pipelines and actually significant 
wetland violations for pipeline installation in Wisconsin.
    But, you know, generally speaking, again, the experience in 
Wisconsin, we are able to process permits quickly. We have got 
joint permits. As I mentioned in my testimony, these are--94 
percent of them get approved, they get approved quickly. The 
challenge here, I would submit, is that you have to be very 
careful about those difficult questions, those difficult 
requests to dredge and fill that require difficult 
delineations. You have got to have adequate staff and you have 
to have time to do it right.
    And I get very nervous about very tight statutory deadlines 
for those sorts of projects because, from my standpoint in 
Wisconsin, when I look at those questions I am not just looking 
at job creation relative to the permit that is going to be 
issued. I look at continued job retention in the State of 
Wisconsin, where our third largest industry is tourism. We get 
$13 billion a year from the tourism industry, and we get it 
because we have good, plentiful water and wetland resources. 
And if it takes some time to make sure that those are protected 
on complicated permits, I think it is well worth it.
    Mr. Shuster. Thank you. Yield back.
    Mr. Gibbs. Mr. Bishop?
    Mr. Bishop. Yes. Very quickly, Mr. Chairman, thank you.
    Mr. Littlejohn, the decision that you are referring to that 
limited the scope of the general permit, you are referring to 
the 2007 decision that was made?
    Mr. Littlejohn. Yes, sir. At that time, we were operating 
under what we call the SPGP3, the third iteration of our first 
SPGP from the Corps. And it was replaced by the SPGP4 in 2006.
    Mr. Bishop. OK.
    Mr. Littlejohn. And so that replacement document----
    Mr. Bishop. It is the one that imposed the limitation?
    Mr. Littlejohn. Our very first SPGP authorized four types 
of activities: docks, shoreline stabilization, like sea walls, 
boat ramps, and maintenance dredging. So four major categories 
of activities. And we had those, only those, activities in our 
SPGP until 1997, when it was expanded to include all of the 
general permits and nationwide permits--essentially all of 
them, not all of them. But in 2006 it was reduced back to those 
four original activities.
    Mr. Bishop. OK. All right. Thank you for the clarification.
    Mr. Littlejohn. Yes, sir.
    Mr. Gibbs. I believe we have had our questions answered. 
And I want to thank you for coming. And at this time we will 
stand at ease while we excuse our panel and bring up our next 
panel. Thank you for being here.
    [Recess.]
    Mr. Gibbs. OK, we will come back in order. At this time I 
want to welcome our panel two. We have the Honorable Jo-Ellen 
Darcy, who is the Assistant Secretary of Army for Civil Works, 
and Ms. Denise Keehner, who is the director of the Office of 
Wetlands, Oceans, and Watersheds of the U.S. EPA.
    I guess I didn't--wetlands, oceans, and watersheds. That is 
an interesting--I didn't ever hear that one before.
    [Laughter.]
    Mr. Gibbs. We will start with Secretary Darcy. Welcome, and 
the floor is yours.

 TESTIMONY OF JO-ELLEN DARCY, ASSISTANT SECRETARY OF THE ARMY 
   FOR CIVIL WORKS; AND DENISE KEEHNER, DIRECTOR, OFFICE OF 
WETLANDS, OCEANS, AND WATERSHEDS, U.S. ENVIRONMENTAL PROTECTION 
                             AGENCY

    Ms. Darcy. Thank you. Thank you, Chairman Gibbs, Ranking 
Member Bishop, and members of the subcommittee. I am Jo-Ellen 
Darcy, the Assistant Secretary of the Army for Civil Works. 
Thank you for the opportunity to discuss the Army Corps of 
Engineers regulatory authority under Section 404 of the Clean 
Water Act and the Corps' role and involvement when a State 
wishes to assume the Section 404 program.
    Since 1972, the Corps has regulated discharges of dredged 
or fill material into waters, including wetlands, of the United 
States under Section 404 of the Clean Water Act related to 
activities such as highway construction, residential, 
commercial, and industrial development, and energy projects.
    Section 10 of the Rivers and Harbors Act of 1899 gives the 
Corps the authority to ensure there are no obstructions to the 
navigable waters of the United States by work and structures 
such as peers, jetties, and weirs. Thus, the Corps had been 
regulating activities in the Nation's navigable waters for over 
70 years when the Clean Water Act was passed.
    Regulatory programs are implemented day-to-day by the Corps 
at the district level by staff that knows their regions and 
their resources and the public that they serve. Nationwide, the 
Corps makes tens of thousands of final permit decisions 
annually. Activities that are similar in nature and are 
expected to cause no more than minimal effects individually and 
cumulatively may be authorized by a general permit, while 
activities that do not meet the criteria for a general permit 
are typically evaluated under a standard individual permit 
procedure.
    All permits meet the requirements of the National 
Environmental Policy Act, and the Corps can only authorize 
those activities that are not contrary to the public interest.
    In carrying out all aspects of the regulatory program 
implementation, the Corps acts as neither an opponent nor a 
proponent for any specific projects. Rather, the Corps' 
responsibility is to make fair, objective, and timely permit 
decisions.
    Under Section 404(g) of the Clean Water Act, Congress gave 
tribes and States the authority to administer their own 
individual and general permit program for the discharge of 
dredged or fill material into waters within their jurisdiction. 
The process for approval of the Clean Water Act State 
assumption program rests with EPA.
    There are two States, as you know, that currently have 
assumed 404: Michigan adopted the program in 1984 and New 
Jersey adopted it in 1993.
    There are activities in certain waters where the Corps 
retains regulatory authority, even in States that have assumed 
the 404 program. The Corps retains permitting authority in 
traditionally navigable waters and adjacent wetlands. This 
retained authority includes jurisdiction over Section 404 
activities, as well as all Section 10 activities. All Section 
10 authority is retained by the Corps in order to review and 
determine whether any proposal may potentially impede or 
interfere with navigation, to ensure that essential Federal 
functions such as national defense, protection of commercial 
navigation, and flood control are considered from a broad 
perspective.
    EPA is responsible for oversight of a State-assumed Clean 
Water Act Section 404 program. In that role, EPA directly 
reviews a small percentage of permit applications processed by 
a State that has assumed the Section 404 program. When EPA does 
review a permit application, they transmit that application to 
the appropriate Corps district office for review and for 
comment.
    Several other States, including Alabama, Florida, Kentucky, 
Minnesota, Ohio, Oregon, and Virginia have in the past or are 
currently considering assuming the Clean Water Act Section 404 
program. When requested, the Corps has provided input and 
expertise on the Section 404 program to the EPA and States 
during the program assumption review process.
    In every instance in which a State has an effective program 
to protect aquatic resources, the Corps has demonstrated its 
willingness to minimize duplication of regulatory effort 
between the State program and the Federal Clean Water Act 
Section 404 program to reduce the burden on the public. In many 
cases, this has been effectively done by working cooperatively 
with States to establish joint permit processing, as well as 
State programmatic general permits and regional general 
permits.
    In States such as Florida, as you have heard, there is a 
large amount of traditionally navigable waters and adjacent 
wetlands, which are not able to be assumed by a State under the 
Clean Water Act or under Section 10 of the Rivers and Harbors 
Act. Often times a State programmatic general permit or 
regional general permit provides solutions.
    Developed in coordination with the Corps, these permits are 
general permits that authorize activities conducted in 
accordance with the State or tribal permit programs. It allows 
States or tribes to evaluate applications and issue permits 
consistent with the Clean Water Act and tribal or State 
regulations. This reduces duplication of effort, thus 
increasing efficiency.
    These general permits apply to specific activities, 
geographic areas, resource types, or sizes of impacts. There 
are currently eight States that have these State programmatic 
general permits: Maryland, Pennsylvania, Florida, New 
Hampshire, Vermont, New Jersey, Virginia, and North Carolina.
    Some of the main challenges that are faced in State 
assumption processes are the lack of funding, the need to 
revise or expand existing State laws and regulations, and 
jurisdictional issues that may arise.
    It is important to note that States have authority under 
the Clean Water Act Section 401 and the Coastal Zone Management 
Act to add conditions to protect aquatic resources that the 
State sees are necessary, and which complement the Clean Water 
Act Section 404 program.
    The Corps provides data to inform States and EPA regarding 
aquatic resources, and can provide information pertaining to 
the administration of the Clean Water Act Section 404 program 
in a given geographic area. But, EPA is the decisionmaking 
authority for State assumption.
    Thank you for the opportunity to testify this morning, and 
I am happy to answer any questions you might have.
    Mr. Gibbs. Thank you.
    Ms. Keehner, the floor is yours. Welcome.
    Ms. Keehner. Good morning, Chairman Gibbs, Ranking Member 
Bishop, and members of the subcommittee. I want to thank the 
subcommittee for its invitation to be here at this hearing 
today, whose purpose is to better understand the impediments to 
and the benefits of assumption of the Clean Water Act Section 
404 program by States. My name is Denise Keehner, and I am the 
career executive at EPA headquarters that has responsibility 
for implementing the national wetlands program. I am the 
director of the Office of Wetlands, Oceans, and Watersheds in 
EPA's Office of Water.
    Protecting and restoring our Nation's waters, as is the 
mandate of the Clean Water Act, requires very strong 
partnerships between tribes, States, and Federal agencies and 
departments. EPA is committed to working with those States and 
tribes who want to increase their role in the protection and 
restoration of waters nationwide. EPA supports tribal and State 
assumption of the Clean Water Act Section 404 program, and is 
ready and willing to assist any State or tribe who is 
interested in assuming the program.
    In my testimony today I will address the requirements, 
benefits, and challenges associated with assumption of the 404 
program, EPA's role in the assumption process, and our efforts 
to support States and tribes who want to increase their role in 
wetlands protection and restoration.
    Section 404 of the Clean Water Act establishes a program to 
regulate, or permit, the discharge of dredged or fill material 
into waters, including wetlands. Section 404 of the Clean Water 
Act designates the Army Corps of Engineers as the Federal 
agency responsible for issuing these permits. However, Congress 
decided in 1977 to amend the Clean Water Act to enable States 
to assume permitting authority for certain waters under Section 
404. In 1987 Congress extended the same authority or 
opportunity to tribes.
    A State or tribe seeking to administer the 404 program for 
assumable waters must submit a request for assumption to the 
appropriate regional administrator of EPA and demonstrate in 
the submission that their program has the legal authority in 
State law and regulation to issue permits consistent with and 
no less stringent than the Clean Water Act and its implementing 
regulations, including the 404(b)(1) guidelines, that it has an 
equivalent scope of coverage for those waters they--States or 
tribes--may assume, that it regulates at least the same 
activities as the Federal program, that it provides for public 
participation, and that it has adequate enforcement authority.
    A State or tribal program under 404 can be more expansive 
and/or more protective of aquatic resources than the Federal 
404 program. But the Clean Water Act requires that State and 
tribal 404 programs must, at a minimum, regulate all the waters 
they are eligible to assume. State programs have to regulate 
the same fill activities that the Federal Government regulates. 
And also, State programs have to be consistent with the 
404(b)(1) guidelines.
    EPA has, in the past, undertaken efforts to better 
understand why States pursue 404 assumption, and to better 
understand what States consider to be some of the impediments 
or most significant barriers to 404 assumption. When we ask 
States why they pursue 404 assumption, you heard some, I think, 
of the reasons from the States that testified this morning. 
This desire to have a single permitting authority. Some States 
also believe that they can do it more efficiently. Some States 
feel that they know their waters better, and are in the best 
position to exercise permitting authority under a 404 program.
    Some of the most frequently mentioned barriers to 
assumption are that State laws and regulations are not 
consistent with the Clean Water Act and its implementing 
regulations, and that there is a fairly heavy lift associated 
with changing State laws and regulations to be consistent, that 
there is a lack of sufficient funds for implementation, that 
there is a lack of EPA authority to approve partial assumption 
or phased assumption.
    Depending on the State, the number of waters that must 
remain by law under Army Corps of Engineers jurisdiction can 
also be a factor and an impediment to a State wanting to move 
forward in an aggressive way to assume the 404 program.
    EPA supports States and tribes that want to assume the 404 
program by: providing funding for program development through 
the Wetland Program Development Grants, and that can include 
some work after the State has received authority to implement 
the 404 program to actually improve certain aspects--develop 
tracking systems, for example, and engage early in the State 
and tribal process. We have worked very cooperatively with 
States and tribes to ensure that the process and requirements 
are understood. We remain engaged during the development of 
materials to be submitted to EPA in the application process. 
And we review and approve program assumption applications 
consistent with the Clean Water Act and its implementing 
regulations.
    Once the program is assumed by a State, we have an 
oversight responsibility to ensure that the State and tribal 
404 program remains consistent with the Act and the 
implementing regulations, and that the permits that are issued 
comply with the environmental review criteria found in the 
Section 404(b)(1) guidelines.
    EPA has maintained very sound, productive relations with 
both Michigan and New Jersey, the two States that have already 
assumed the 404 program. We have a strong professional and 
supportive working relationship with these State programs. We 
know, from working with these States, that these programs are 
strong and effective in protecting aquatic resources in those 
States.
    EPA has also worked with the Environmental Council of 
States and the Association of State Wetland Managers to clarify 
requirements and the process for assumption. For example, EPA 
has clarified that Section 7 consultation under the Endangered 
Species Act is not required for EPA's action to approve a State 
program, or for individual permits that States issue after they 
have assumed the program. EPA also supported the Association of 
State Wetland Managers and ECOS in the development of a 
handbook to help States that are seeking assumption to better 
understand both the process and the requirements.
    In addition, we have also sponsored training workshops in 
partnership with the University of North Carolina, where 
information was shared amongst States and tribes across the 
Nation about successful approaches to sustainably financing 
wetland programs, including 404 programs.
    EPA appreciates the opportunity to be here today to have 
heard directly this morning from the States about their views 
on the impediments to and the benefits of assumption of the 404 
program, and we look forward to continuing to help those States 
and tribes who are interested in assuming the program move 
through the process in an effective and efficient manner.
    It is clear that our collective ability to protect and 
restore our Nation's waters is significantly enhanced by 
effective State and tribal programs. Thank you.
    Mr. Gibbs. Thank you. I am going to yield to my ranking 
member, Mr. Bishop, because I think he has a schedule conflict.
    Mr. Bishop. I do, and I thank you very much for indulging 
my schedule, Mr. Chairman. And I thank our witnesses. I just 
have one question. It is for Secretary Darcy, and it does not 
relate to the assumption of Section 404 permits.
    I have recently become aware of a legislative proposal that 
I believe is circulating within the Corps that would propose to 
outsource existing operation and maintenance responsibilities 
that the Corps traditionally had undertaken to private 
contractors, and that this is an effort on the part of the 
Corps to respond to declining budget levels.
    And it is my further understanding that there is an 
assumption within the Corps that engaging in this practice 
would reduce O&M expenses by somewhere between 10 and 20 
percent.
    So I have two requests. And I am not authorized to speak 
for the committee, so I will simply make the request for me. 
One is could you provide me with any studies, assessments, 
analysis that have been done that buttresses this 10 to 20 
percent savings reduction, one. And two, could you provide me, 
in writing, the status of this proposal? How far along it is, 
in terms of the Corps process?
    Ms. Darcy. Well, yes. We will definitely do that, 
Congressman. I think one of the areas of concern is the fact 
that we are looking at ways to finance our aging 
infrastructure. As you know, that is a concern from every 
aspect, whether it is looking for private funds for the 
operation and maintenance, or looking for other sources of 
revenue in order to meet those demands. But as far as 
privatizing a workforce, I will provide you whatever we have 
been considering, from that perspective.
    Mr. Bishop. If you could, I appreciate that.
    Mr. Chairman, I yield back. And thank you again for 
indulging my schedule.
    Mr. Gibbs. OK, thank you. I will start off here. You heard 
from the panel one, the States, that said they think they can 
do it more cost effectively, streamlining it, closer to the 
people, all that.
    I guess, Secretary Darcy, can you kind of respond if you 
think that is possible? Or where does the Corps stand on that? 
Or why--or, if it is true, why is the cost higher with the 
Corps doing it?
    Ms. Darcy. As you know, only two States have the program.
    Mr. Gibbs. Yes.
    Ms. Darcy. We have to administer the program in all the 
other 48 States. We have offices in every State. In some States 
we have several regional offices to just do implementation of 
our regulatory program.
    I don't think we have done an analysis of the cost savings, 
but as you know, it has been demonstrated here by Michigan, in 
particular, and the proponents of the Virginia assumption, that 
they would be able to do it for $3 million, as opposed to our 
current $7 million. But it is not exactly comparing apples to 
apples, because that $7 million figure is for our entire 
regulatory program, not just for the 404 program.
    Mr. Gibbs. OK. Ms. Keehner, I guess--I have heard some 
feedback. If a State wants to move in this direction and apply 
for assumption, they go through the regional offices, the 
regional administrator. And how would that mechanism work? 
Because I guess I get a little concerned. I have heard, you 
know, over the years in my State legislative capacity there is 
some times, you know, different things coming out from 
different regional offices that maybe aren't apples to apples, 
and we might hear how a different regional office--so how would 
that interact, and what was your role in--to facilitate that?
    Ms. Keehner. Well, the EPA headquarters office of the 
Office of Wetlands, Oceans, and Watersheds, we have a division 
that is responsible within that office, the Wetlands Division, 
for working in cooperation and collaboration with both State 
partners, as well as our regional offices. There are many 
opportunities for coordination and collaboration across the 
Nation. There are, you know, conference calls that are held----
    Mr. Gibbs. When a State like Ohio--would they be working--
--
    Ms. Keehner. With region five, yes.
    Mr. Gibbs. Chicago office?
    Ms. Keehner. Yes.
    Mr. Gibbs. And so they would go through there first, before 
it gets to you here, in DC?
    Ms. Keehner. The regional administrator is the--is actually 
the approving authority for the assumption. So we would be--I 
mean we were very--in EPA's regional offices, there is a lot of 
communication and coordination that occurs with headquarters, 
particularly on issues as important and significant as a 404 
assumption. There would be dialogue that would occur between 
the regional office staff and our--my headquarters staff--and 
Office of General Counsel, as well.
    Mr. Gibbs. OK.
    Ms. Keehner. And there is always concurrence on those 
packages with headquarters, Office of General Counsel, Office 
of Water and OECA before it is final.
    Mr. Gibbs. I am just looking for some uniformity.
    Ms. Keehner. Right.
    Mr. Gibbs. You know, make sure we have that. Because I know 
there has been instances before, you will hear--we will hear 
things about the region five office and, you know, interpreting 
things maybe different than another region. And that is--you 
know, the uniformity aspect of that.
    I guess I will just start--let's see. We don't have any 
Democrats here any more, do we? Who wants to go next? Mr. 
Shuster?
    Mr. Shuster. Sure. Thank you, Mr. Chairman. Secretary 
Darcy, pipelines, permitting, the delegation, the Pennsylvania 
Delegation. We sent you a letter. We appreciate your response 
to us. But in your response to us you acknowledge and restated 
the goal of eliminating duplicative--the review process. 
However, the new approach that the Corps is doing is just the 
exact opposite, in my view, and the view of my colleagues--most 
of my colleagues--and the view of our DEP. As well as taking 
the exact opposite approach, it is also not--we don't believe 
there is any additional environmental benefit to the approach.
    And furthermore, we don't believe Pennsylvania is being 
treated like other States are being treated. The average--
Pennsylvania's mid-stream permits are averaging about 150 days 
now, give or take, under GP4. Other States with nationwide 
permitting have a maximum of 45 days, and in some cases don't 
require the Corps to even approve.
    And so, first question is why is Pennsylvania being treated 
differently? And then we will get on to a couple other 
questions.
    Ms. Darcy. Congressman, are you referring to our nationwide 
permits, or the general permits?
    Mr. Shuster. Well, general permits in Pennsylvania. But my 
understanding, when I talk to the nationwide permits, there are 
other States, not--Pennsylvania is not one of them--that don't 
even have to have Corps followup.
    Ms. Darcy. Well, on our nationwide permits, if you are 
referring in particular to pipeline permitting----
    Mr. Shuster. Correct.
    Ms. Darcy [continuing]. Under our nationwide permits for 
pipelines, if you are intending to cross a wetland, or for your 
pipeline, you have to submit what is called a pre-construction 
notice to the Corps of Engineers. Within 45 days of that time, 
if we do not require any changes or differences, you are 
allowed to go ahead with that. That is a nationwide permit, 
that applies everywhere in the country.
    Mr. Shuster. Right.
    Ms. Darcy. Regarding the general permit for Pennsylvania 
that you are referring to for pipelines, my understanding is 
that we are currently in discussions with the pipeline 
companies in Pennsylvania to help to develop that general 
permit.
    Mr. Shuster. Right. And that is--but again, what you have 
done is you have changed from a category 1 to a category 3. And 
for a long time, a long period of time, Pennsylvania DEP 
approved those under a category 1 status. Now, under category 
3, they have to go through and, again, there are significant 
delays.
    And we have--I think you have been in talks with the 
pipeline companies for some time now. This is about--first of 
all, we want to do it environmentally in a sound way, to 
protect the environment, which our Secretary Krancer is doing a 
great job and, trust me, he is feared by the pipeline or the 
energy companies, because they know if they do something 
willfully, he is going to come down on them hard.
    But we have taken away the ability for Pennsylvania to 
quickly approve these pipelines, the gathering lines, stream 
crossings. Again, and that is an expansion of what the Corps 
has done. So can you tell me why have you done it? I mean 
Pennsylvania wasn't a bad actor, they did a great job. So I 
would understand that if we were out there, doing the wrong 
things.
    Ms. Darcy. I don't know the answer. But what I can tell you 
is that I expect that the reason for why it is taking longer 
may be because when we issue general permits there has to be a 
public notice and comment period, and we have to respond to the 
comments. I can't tell you for certain.
    But what I can tell you is that I will personally look 
into----
    Mr. Shuster. What I would prefer to see is us go back to 
letting them be category 1, where they fall under the State 
review. And now, today, 90 percent of them under category 3 
have to be reviewed. And that is a significant challenge to the 
State of Pennsylvania and to these energy companies. And it 
just seems to me, under category 3--or, excuse me, under 
category 1, the impacts were temporary and minimal. And those 
stream crossings are all temporary and minimal in most cases. 
So again, I would like the Corps to go back and reverse itself 
and put us back into category 1. Because, again, I just don't 
see any reason for it to penalize Pennsylvania by doing this. 
Can you talk about that?
    Ms. Darcy. What I can tell you is that I will look at it 
and see why they are considered category 3. Because right now I 
can't, off the top of my head, tell you why.
    Mr. Shuster. And I don't know if you have ever interacted 
with Secretary Krancer, but I would highly recommend you--I 
mean this guy is outstanding. We have had him in front of 
Congress a number of times. He is a former judge, former 
environmental judge, who wants to do things right for 
Pennsylvania. He cares about Pennsylvania as much--I should say 
more--than the Corps of Engineers or more than the EPA, because 
he is a Pennsylvanian. And again, he has a great respect from 
the energy companies because they know if they do something 
willfully, if they do something knowingly, he is not going to 
tolerate it.
    So, I would hope that we could again move past this and get 
these energy companies back to drilling and getting the energy 
out, paying the royalties to the folks that have leased their 
land to these people, because it adds to the economy 
tremendously in Pennsylvania. So thank you.
    Mr. Gibbs. I would just like to also ditto on what the 
representative just said. He testified before this committee 
and they had a problem in Pennsylvania and they shut it down in 
27 hours when they realized they had a problem. And I don't 
think anybody could have moved that fast, so I was impressed.
    Mr. Cravaack, do you have any questions?
    Mr. Cravaack. Oh, yes. Thank you for being here today. 
Madam Darcy, could you please tell me what constitutes a waters 
of the United States? How does--how do you go across that 
determination?
    Ms. Darcy. We have a definition that is in the statute, as 
well as in our regulation and EPA's regulation on what 
determines a water of the U.S. I used to know this off the top 
of my head, but it is defined in statute.
    Mr. Cravaack. You can get some help from your wingmen if 
you need it, you know.
    Ms. Darcy. William? Where are you, William? Well, Ryan 
probably can do it, too.
    The significant nexus to an existing body of water. Is that 
right?
    Mr. Cravaack. Definition of nexus?
    Ms. Darcy. Connection is----
    Mr. Cravaack. Well, if you could give our office a 
reasoning why the Mille Lacs Lake in the middle of Minnesota, 
which is by the Army Corps of Engineers, considered a 
nonnavigable lake----
    Ms. Darcy. What is the name of the lake, Congressman?
    Mr. Cravaack. Mille Lacs Lake.
    Ms. Darcy. Mille Lacs.
    Mr. Cravaack. Why the United States Government took that 
from the State? I would love to hear that. Because we actually 
have a bill to prevent it. And I would like to know what the 
Army Corps of Engineers genesis was when they actually--in the 
report itself it said it is not navigable. But anyway, I would 
love to hear that from you in the future, though we do have 
legislation that has passed the House into the Senate, and 
hopefully we are going to hotline that with Senator Klobuchar 
over there.
    How long do you think it would take for the State to assume 
a permitting process? And does the Federal Government really 
support that, in your opinion?
    Ms. Darcy. Assuming the 404 process?
    Mr. Cravaack. Right.
    Ms. Darcy. I am going to defer to EPA, because they are the 
ones who----
    Mr. Cravaack. OK.
    Ms. Keehner. The experience that we have had with the State 
of Michigan and New Jersey, for the State of Michigan, from the 
time the State began the process of developing its program 
until authorization, I believe, was 5 years. And the State of 
New Jersey, I believe, was 8 years.
    Mr. Cravaack. OK, 4 and 8 years. How do you view the 
States? Do you--Mr. Creal had an excellent--I mean I was really 
impressed when he says he views, you know, companies and--do 
you view them as customers?
    Ms. Keehner. Do I view the States as customers?
    Mr. Cravaack. Customers and companies within the States as 
customers.
    Ms. Keehner. Of the Federal Government and of regulation? 
Yes, they are--States are both partners in the implementation 
of the Clean Water Act. In this case, they are also customers 
of EPA, in the sense that EPA has obligations and 
responsibilities to provide interpretations, guidance, 
direction. We run grant programs. So, yes.
    Mr. Cravaack. OK. Well, we have had a lot of troubles with 
EPA in Minnesota in regards to--for example, some of our 
mining, for example, where the States--actually, and some of 
our restrictions are even more strict than what the EPA puts 
out. And yet the EPA swoops in and says, ``We are not going to 
follow your State guidelines, and we are going to go ahead and 
do what we want to do,'' mainly--it is out of your 
jurisdiction, probably, regarding air quality--it is a haze 
issue, actually, which, really, the Federal Government 
shouldn't have any direct input in implementing, anyway.
    So, I really question if the EPA wants to partner with 
businesses and States, or they wish to mandate to businesses 
and States. Because I would like to see Federal Government 
partnering with companies and States to create jobs, while at 
the same time protecting our environment.
    In the 2 years I have been here--and I admittedly am a 
freshman--but all I have seen is the Federal Government coming 
in and playing Gotcha, instead of partnering with companies, 
with States, and say, ``How can we do this better together, 
while increasing jobs and at the same time make sure we all 
take care of our environment?'' And that is just an 
observation. So I hope that you will possibly take that back.
    Ms. Keehner. Thank you.
    Mr. Cravaack. What is the process, in your--Ms. Darcy, what 
is the process for actual determining--we kind of asked that 
earlier, but, you know, how do you go about determining what is 
a water body of the United States? How would that be? You see a 
water--and I have a specific issue in mind. But how do you go 
about saying that this is now a Federal body of water?
    Ms. Darcy. To determine it is--we have what is called a----
    Mr. Cravaack. Not even navigable, but it just becomes a 
body of water for the United States.
    Ms. Darcy. We have, through our regulations, what is called 
the delineation manual that all of our folks on the ground and 
our districts utilize to make a determination as to what is 
navigable. It depends on the amount of water, the time of year, 
what the vegetation is, what the aquatic life is there, for 
example. All of those things go into determining whether it is 
a water of the U.S. for jurisdictional reasons.
    Mr. Cravaack. Can you explain to me how a body of water 
could be in existence for 25 years, and then all of a sudden 
the Federal Government comes in and says it is now a Federal 
body of water?
    Ms. Darcy. That it was at one point and is no longer? Is 
that----
    Mr. Cravaack. No. It was not a Federal body of water, and 
all the sudden the Government swoops in and says now it is a 
Federal body of water.
    Ms. Darcy. I can only speculate that perhaps the nature of 
the--whether it is a lake or river--has changed over time, has 
increased, and now perhaps supports aquatic wildlife that it 
didn't before.
    Mr. Cravaack. OK. All right. I see my time has expired. 
Thanks for the indulgence to the chair, and I will yield back.
    Mr. Gibbs. Ms. Herrera Beutler?
    Ms. Herrera Beutler. Thank you, Mr. Chairman. A couple of 
questions. You know, and a general statement on the NPDES and 
the nationwide permitting. I don't know who is responsible, 
because when I work with my local Corps, both--I am in 
southwest Washington, so I deal with both the Portland Corps 
and the Seattle Corps, depending on where we are.
    And I have seen very--you know, we have new colonels right 
now doing a great job working on reducing permitting times. But 
the numbers that he shared with you, Mr. Shuster, are far and 
away worse in our neck of the woods. And what I hear--what I am 
hearing is, as the colonels are trying to make a--I mean we are 
hundreds of days longer on both of those than--you can pull out 
several different Corps offices, district offices. We are 
hundreds of days beyond that. And we are not talking about for 
permitting a pipeline or a mine. We are talking about building 
a building.
    I mean it is--I almost wish our problems were with 
permitting, you know, the more onerous types of projects. It is 
building a shopping center in basic areas. I mean we had people 
who had to--cities who had to either give back--have been in 
danger of losing their stimulus grants because they just didn't 
know if they could get a permit in under 200 days. I mean it is 
drastic, and something absolutely has to change.
    The efforts that I have had from the colonels on both--the 
new colonels commanding both districts have been tremendous. I 
appreciate them. But as they tell me when they do--they have 
shown me numbers. When they are doing the permitting alone, the 
permit times are less. But when they have anything to do with 
the EPA is when it gets bad. And they didn't say it like that, 
I am not trying to throw anybody under the bus. But it 
significantly lengthens the amount of time it takes to get one 
of these two permits.
    I want to know from either of you who on this level my 
office can turn to with specific examples to change that? I 
mean at this point I don't know who the problems are, but we 
have double-digit unemployment in my neck of the woods, and 
tremendous projects ready to go that the Federal Government 
has, on the one hand, said, ``Hey, here is stimulus money.'' On 
the other hand, we can't even--we can't get a permit to build a 
building.
    So I guess I am asking from both of you who I can turn to 
here who is going to make something happen. And I am not saying 
permit things that are--shouldn't be permitted. I am talking 
about the basics.
    Ms. Darcy. I think you are looking at how we can speed up 
the coordination process that is required when we have to 
process a permit. We do have to coordinate with EPA or the Fish 
and Wildlife Service or locals. We also have to coordinate with 
the State historic preservation office--there are all kinds 
of----
    Ms. Herrera Beutler. Well, this is one of the things I was 
told was, ``Well, maybe there is more sensitive environmental 
or tribal issues in this area, as compared to a different 
district.''
    And I said, ``Well, why are we hundreds of days different 
than the Portland Corps, because they have the same 
environmental and tribal issues that we do in Washington''--I 
mean I live right on the border. They are very, very similar. 
So, yes. It is the streamlining process, perhaps.
    Ms. Darcy. One thing I think we can look at doing is 
coordinating with our sister agencies earlier in the process. 
We often get a permit application and it is not complete, so 
that takes time. You have to go back to the applicant and 
request information, for example.
    But, if coming in the door we know that there is an 
endangered species, or we know that there is a possibility for 
impacts to a wastewater treatment system or something, we 
could, earlier in the process, coordinate with our----
    Ms. Herrera Beutler. Do you do a type of concurrent 
permitting? Because one of the things I found was people will 
turn everything in and not be told for 4 weeks that there--it 
is an incomplete--or there was something else. Or it wasn't 
even incomplete. I have stories where people have completely 
done everything they were supposed to do, and then they just 
wanted more information. But they didn't find out that they 
wanted more information until it had already been sitting on 
someone's desk for a month.
    I mean is there a process that we can--where do I go--
because I have been trying at those levels to fix this, and it 
is not working. So I have you both here.
    Ms. Darcy. Well, as you know, it is Corps districts who do 
our permitting, and it is the ultimate decision of the District 
Commander in all instances whether a permit is granted or not. 
But I think, in looking at streamlining, I think it was the 
Portland district, or maybe the Seattle district, years ago we 
got a provision in law referred to as Section 214 that gave 
additional funding to permit processing. And it has been very 
successful. And that has helped. But it is clear that it is not 
helping enough in getting this more expeditious----
    Ms. Herrera Beutler. So who in your office is--who could 
raise their hand that we could----
    Ms. Keehner. I would be happy to follow up with that region 
and the office in Seattle with the specifics of the cases.
    Ms. Herrera Beutler. Great.
    Ms. Keehner. And--so that we can better understand, 
really----
    Ms. Herrera Beutler. Great.
    Ms. Keehner [continuing]. What was the nature of any 
problem.
    Ms. Herrera Beutler. And the challenge I have is that 
they--my folks can demonstrate a difference between the 
Portland office and the Seattle office.
    Ms. Keehner. We will take a look----
    Ms. Herrera Beutler. I mean they can demonstrate it. One 
more quick thing. As we are talking about this 404 and letting 
the States assume this authority, what would the difference 
be--I see that under Section 10 of Rivers and Harbors the Corps 
would retain authority to--even if this is transferred to the 
States, would they still be able to say, ``Hey, wait a minute, 
you are going to impede a navigable water''?
    Ms. Darcy. Yes, Congresswoman. We don't have the authority 
to delegate the Section 10----
    Ms. Herrera Beutler. Great.
    Ms. Darcy [continuing]. Responsibility.
    Mr. Gibbs. Yes----
    Ms. Herrera Beutler. So that doesn't go away.
    Mr. Gibbs. Congress would have to change the law for that 
to happen.
    Ms. Darcy. Yes.
    Ms. Herrera Beutler. Great. Thank you. Thank you, Mr. 
Chairman.
    Mr. Gibbs. Mrs. Capito?
    Mrs. Capito. Thank you. Thank you both for your testimony.
    Secretary Darcy, first of all, I want to thank you. I am 
Shelley Moore Capito from West Virginia. Thank you for the 
letter that Congressman Rogers and I had written about the 
permitting. As you know, West Virginia has had some deep 
difficulties with our permitting issues and with the 
coordination, and I appreciate the chart that you sent me 
updating the latest.
    And you also know that the Corps has struck down the 
enhanced coordination procedures that were put into effect by 
the EPA. I believe that was in 2009, early 2009.
    I would like to know from you, Secretary Darcy, how has the 
interaction between the Corps and the EPA changed since the 
2012 court decision? Because, basically, my understanding at 
the basic is the court said this enhanced coordination 
procedure is unlawful and an overreach by the EPA.
    So, I am assuming it has been dropped. But is that in 
reality what is happening? And----
    Ms. Darcy. Yes.
    Mrs. Capito [continuing]. What has changed?
    Ms. Darcy. What has changed is we have gone back to the way 
we were operating before the enhanced procedures process in 
2009, as a result of the court decision this year.
    Mrs. Capito. And the District Commander is making the 
decision without the EPA having the ability to come back and 
review after they have already approved the water standards, et 
cetera?
    Ms. Darcy. The District Commander still retains the right 
to make the decision. He also still has the ability to ask for 
additional information or coordination. But it is not the same 
process that we put in place in 2009.
    Mrs. Capito. Right. Then what is the EPA's role right now, 
then?
    Ms. Keehner. EPA has an ability to review those permits and 
to make comments on them at the proposed permit stage, if there 
is any----
    Mrs. Capito. Once it has been finalized. Once the----
    Ms. Keehner. Well, EPA has the ability under 404 to 
potentially veto a permit. But that is very rarely used.
    Mrs. Capito. Right. The other question--I mean we have had 
just such difficulty. We have got people who are withdrawing a 
lot of their applications, capital investments not going 
forward in our coal mining region because of the difficulty 
with the permitting issues. You are both well aware of this, I 
am not telling you something you don't know.
    But, you know, since the hearing here is about whether the 
States would take over the 404 permitting, I noticed my State 
was noticeably absent in the listing of the States. Would you 
like to say why West--I don't know why West Virginia is not one 
of those. I would have to say the complexities involved may be 
why the State doesn't want to take this on. I don't know. Would 
you----
    Ms. Darcy. Well, I don't know either, Congresswoman. The 
States who were represented here this morning did point out 
some of the reasons why the State assumption is difficult. One 
of them was funding, one of them was having to redo your own 
regulations to be consistent. I mean they raised those 
concerns.
    Mrs. Capito. I would like to ask Ms. Keehner--did I say 
that right?
    Ms. Keehner. Yes, Keehner. Yes.
    Mrs. Capito. Keehner. Yes, thank you. As you know, EPA's 
objections have drastically impacted the ability of our State 
to run our own NPDES permitting under Section 402. Is there any 
hope that EPA would show greater deference to a prospective 404 
permitting program if the State takes it over, than it has for 
the NPDES State program?
    Ms. Keehner. What I can comment on is that the relationship 
we have with the State of Michigan and New Jersey, as they have 
implemented the 404 program, has demonstrated that EPA reviews 
and comments on less than 2 percent of the permits that those 
States move forward under the 404 program. And over the history 
of both of those programs, there have been only three cases 
where objections, EPA objections, were maintained and those 
permits moved over to the Corps of Engineers. So I think that 
is a good indication of EPA's--how EPA, in practice, oversees 
State programs that--under 404 that have been assumed.
    Mrs. Capito. With the court striking down the enhanced 
coordination procedures that were put into effect by the EPA, 
has there been any activity in the EPA to reconstitute these 
under a different form?
    Ms. Keehner. No.
    Mrs. Capito. Good answer.
    Ms. Keehner. We respect the rule of law and the judge's 
decisions.
    Mrs. Capito. Good. And then for the Corps, on the back log, 
I know staffing has been an issue sometimes at the Huntington 
Corps, they are working like crazy. I realize that. There is a 
lot of activity, and the colonels have done a great job. I 
would concur with my colleagues who--you can't meet a finer 
group of people, really, and I have great respect from them. 
But what are you doing to address the backlog at the Corps 
level in those particular districts that I am concerned about?
    Ms. Darcy. We are trying to be more efficient within the 
resources we have. We are also looking at ways that we can, as 
we talked about, streamline the process, maybe be in touch with 
those people with whom we need to coordinate earlier in the 
process. And also, we have a dedicated group of folks in those 
district offices trying to process those permits, and there are 
a lot of permits.
    Mrs. Capito. Thank you. Thank you, Mr. Chairman.
    Mr. Gibbs. A couple more questions here. The Corps reissued 
its nationwide permits under Section 404 of the Clean Water Act 
in February of 2012. And shortly before the Corps reissuance, 
the National Marine Fishery Service issued a jeopardy 
biological opinion under the Endangered Species Act on the 
Corps' nationwide permit program.
    In August of 2012, the Center for Biological Diversity 
notified the Corps of its intent to file a lawsuit in 60 days 
to challenge the Corps' nationwide permit program, alleging 
that the nationwide permits reissuance violated the Endangered 
Species Act. How might this Endangered Species Act litigation 
impact the nationwide permits and overall 404 program?
    Ms. Darcy. Well, as you say, they have issued an intent to 
sue.
    Mr. Gibbs. Yes.
    Ms. Darcy. I don't believe they have actually filed a 
lawsuit yet. I would have to check. We will continue to operate 
under our nationwide permits as they have been approved. In 
light of the litigation stopping us from using them, we are 
going to proceed under the nationwides as they have been 
adopted.
    Mr. Gibbs. OK. I think we are good. Just to follow up, I 
know last year, before you came before this committee, we were 
talking about the permits and the revocation of the one permit 
in said State, and you said that the EPA said they had the 
authority to do that. Apparently, the--at least in the first 
round court decision, they didn't have the authority. I just 
wanted to reinforce that. And I know the administration is 
moving forward, which is unbelievable to me, but I just had to 
get that in.
    I want to thank you for coming today. Oh, OK. The--you 
know, this hearing and our first panel, you know, we are really 
trying to figure out how we can do things better and--because 
when I am out in Ohio and elsewhere, one thing you hear from 
businesses and, you know, our customers, that, you know, we 
can't get our permits, permit delays, or--I think 
Representative Herrera Beutler said it too, sometimes they 
don't get back. Lots of times I hear instances where they say, 
``Well, we haven't heard back. We inquire, it's been months, 
and we can't get, you know, any feedback, we don't even know 
what the status is.''
    And, you know, they might need more information but, you 
know, I think you really need to get filtered down through the 
agency that there are customers and they are the ones that 
create the jobs and grow the economy. And we certainly don't 
want to be putting more barriers, making it more difficult, and 
streamline the process when we can. So hopefully we can, you 
know, out of this hearing today we can figure out how we can do 
things better.
    And I guess one quick question just comes to mind. If a 
State wants to come in and do this, what is the position of the 
Army Corps to--you know, don't have a position, or are you 
just--are you going to facilitate the needs, what they want?
    Ms. Darcy. If the State requires information for us to 
review in order to submit the application to EPA, we would be 
happy to--and we support that.
    Mr. Gibbs. Yes, I figured you did, I just wanted to make 
sure.
    I guess just another quick thought. We have had hearings in 
this committee on our entire maritime transportation system, 
especially in the waterway and the ports, you know, it is 
really critical, and we have had a lot of discussion about the 
aging assets, you know, our locks, levies, and dams, and then, 
of course, flood mitigation.
    When we are looking at Corps personnel, can you kind of 
break down, you know, where the emphasis is? I mean I will just 
tell you. My strong belief is I think the Corps' top priorities 
ought to be the maritime transportation system and flood 
mitigation. And would it be better if the Corps was relieved of 
this responsibility to do some of these 404 permits that really 
don't pertain, as such, maybe to those--that--those two issues?
    Ms. Darcy. As far as focusing our program on what those 
priorities are that you mentioned, I think if you look at our 
budget over the last several years, we are spending more on 
operation and maintenance than we are on most other business 
line functions, and that is because of the aging 
infrastructure, and because of the importance of the maritime 
system to this country.
    You know, as far as the 404 program, our regulatory program 
is about $185 million of our entire $4.7 billion budget. So it 
is not a huge part, but it is a really important part. And I 
think we have been doing it pretty well. I mean it was given to 
us in 1972 by the----
    Mr. Gibbs. When the Clean Water Act was----
    Ms. Darcy. Passing the Clean Water Act for the dredge and 
fill materials. So I think it is operating well, but you know, 
with the increased needs of not only permits, but also the 
increased needs of the navigation system, we need to weigh 
where we are going to put our money.
    Mr. Gibbs. Yes. No, I agree, and we got serious challenges, 
because I have always made the argument if we don't have the 
correct transportation system and maritime--essential cog of 
that, our total transportation system, that, you know, our 
economy will suffer and then we won't have the resources to do 
some of these other things, you know, eco-restoration and all 
the other programs you do.
    So, anyway, thank you again for being here today, and we 
look forward to seeing you in the future.
    Ms. Darcy. Thank you.
    Mr. Gibbs. This concludes this hearing.
    [Whereupon, at 12:13 p.m., the subcommittee was adjourned.]
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