[Senate Hearing 112-433]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-433
 
 A YEAR AFTER THE DEEPWATER HORIZON OIL SPILL: THE STATUS OF RECOVERY 
                           EFFORTS IN FLORIDA

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



                                 FIELD

                                HEARING

                               BEFORE THE

            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 11, 2011

                               __________

    Printed for the Committee on Small Business and Entrepreneurship


         Available via the World Wide Web: http://www.fdsys.gov




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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                      ONE HUNDRED TWELFTH CONGRESS

                              ----------                              
                   MARY L. LANDRIEU, Louisiana, Chair
                OLYMPIA J. SNOWE, Maine, Ranking Member
CARL LEVIN, Michigan                 DAVID VITTER, Louisiana
TOM HARKIN, Iowa                     JAMES E. RISCH, Idaho
JOHN F. KERRY, Massachusetts         MARCO RUBIO, Florida
JOSEPH I. LIEBERMAN, Connecticut     RAND PAUL, Kentucky
MARIA CANTWELL, Washington           KELLY AYOTTE, New Hampshire
MARK L. PRYOR, Arkansas              MICHAEL B. ENZI, Wyoming
BENJAMIN L. CARDIN, Maryland         SCOTT P. BROWN, Massachusetts
JEANNE SHAHEEN, New Hampshire        JERRY MORAN, Kansas
KAY R. HAGAN, North Carolina
  Donald R. Cravins, Jr., Democratic Staff Director and Chief Counsel
              Wallace K. Hsueh, Republican Staff Director
                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Rubio, Hon. Marco, a U.S. Senator from Florida...................     1
Broxson, Hon. Douglas V., a Representative in the Florida House 
  of Representatives.............................................    39
Ingram, Hon. Clay, a Representative in the Florida House of 
  Representatives................................................    39

                               Witnesses

Putnam, Adam H., Commissioner, Florida Department of Agriculture 
  and Consumer Services..........................................     4
Zales II, Robert F., President, National Association of 
  Charterboat Operators..........................................    16
Gilchrist, Joe, Owner, Flora-Bama Lounge, Package, and Oyster Bar    29
Merrill, Collier, Chairman, Pensacola Chamber of Commerce........    33

          Alphabetical Listing and Appendix Material Submitted

Brigman, Bobbie
    Letter.......................................................    62
Broxson, Hon. Douglas V.
    Testimony....................................................    39
Gilchrist, Joe
    Testimony....................................................    29
    Prepared statement...........................................    31
Ingram, Hon. Clay
    Testimony....................................................    39
Merrill, Collier
    Testimony....................................................    33
    Prepared statement...........................................    36
Nelson, Hon. Bill
    Prepared statement...........................................     3
Putnam, Adam H.
    Testimony....................................................     4
    Prepared statement...........................................     7
Rubio, Hon. Marco
    Testimony....................................................     1
Zales II, Robert F.
    Testimony....................................................    16
    Prepared statement...........................................    19


 A YEAR AFTER THE DEEPWATER HORIZON OIL SPILL: THE STATUS OF RECOVERY 
                           EFFORTS IN FLORIDA

                              ----------                              


                         MONDAY, JULY 11, 2011

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                     Pensacola, FL.
    The Committee met, pursuant to notice, at 9:34 a.m., in the 
Amos Performance Studio, Pensacola State College, 1000 College 
Boulevard, Pensacola, Florida, Hon. Marco Rubio, presiding.
    Present: Senator Rubio.

  OPENING STATEMENT OF HON. MARCO RUBIO, A U.S. SENATOR FROM 
                            FLORIDA

    Senator Rubio. Good morning. First of all, thank you all 
for welcoming me here to Pensacola. It is a pleasure to be 
here, despite the serious discussion before us. I would 
particularly like to thank the Pensacola State College for 
allowing us to use this beautiful studio. The air conditioning 
works well--thank you very much--and the staff here has been 
immensely helpful in helping us prepare for this event.
    And I do want to thank some of the people who were not able 
to attend today's field hearing but who made this possible, 
Senator Landrieu of Louisiana, who was instrumental in making 
this possible, as well as Senator Snowe, and their hard-working 
staffs who are here with us today, for allowing me the honor to 
conduct this field hearing before the Committee on Small 
Business and Entrepreneurship.
    I particularly want to single out Senator Landrieu for the 
hard work she has done in keeping folks up in Washington 
engaged on this much-needed long-term recovery in the Gulf. I 
was recently asked about--just a few seconds ago asked about, 
well, has the world not moved on? Have people not forgotten 
about this? And the answer is, for most of America, this is 
something that happened a year ago. But for folks, particularly 
in the Gulf region and here in northwest Florida, this is 
something that is still happening, and that is why this is so 
important that this hearing take place and that we continue to 
talk about this.
    A little over a year ago, on April 20, approximately 4.1 to 
4.9 million barrels of oil began spilling into the Gulf of 
Mexico. As a result, the Federal Government closed 
approximately 88,500 square miles of Gulf fishing. That 
negatively impacted 131,000 jobs supported by a $12.8 billion 
year industry.
    Subsequently, the tourism industry in Florida, the state's 
largest industry, significantly declined as people canceled 
their summer vacations in fear of oil-slicked beaches. There is 
one study that says that 45,000 jobs linked to tourism in 
Florida's counties along the Gulf of Mexico were impacted. 
Summer home rentals were down by 80 percent between April 20 
and the end of May of 2010. And while the oil-slicked beaches 
were never realized, I am certain those of us in this room did 
not need statistics to prove the impacts both on the state and 
on everyday lives, including the everyday lives of people who 
find themselves here with us today.
    In some way, each of you have lived daily with the impacts 
from this spill. As of July 7, the Gulf Coast Claims Facility 
received 184,591 claims and paid over a total of $1.8 billion. 
In total, BP has paid $2.133 billion to the State of Florida. 
But I think what we are going to hear today is that that is not 
enough. While tourism has increased over the past year, there 
is still more to be done, and the long-term effects on our 
fisheries, an industry vital to both our economy and our 
tourism industry, may not be known for decades.
    I am here today for one reason and one reason only, and 
that is I want to hear from those worst impacted by the spill 
on how I can best assist them in my role as the junior Senator 
from Florida, and I am here to listen.
    I understand that there are still significant frustrations 
regarding the claims process, and I would like to understand 
specifically what those frustrations are at this point and how 
you feel they can be best addressed. I would also like to 
understand what impacts continue to be felt throughout the 
tourism industry, the seafood industry, and the fishery 
community so that I can help guide the Federal discussion on 
how best to assist these industries so vital to our state's 
economy.
    Specifically, I have been working with all of my Gulf state 
colleagues on legislation spearheaded by Senators Landrieu and 
Shelby that would redirect to the Gulf states the Clean Water 
Act funds that BP will likely pay as a result of the oil spill. 
And in that, I also want to recognize my senior Senator from 
Florida, Senator Nelson, who has been intricately involved in 
this conversation, as well. He could not be here today. He had 
a prior commitment, but he expresses his desire to have been 
with us here today, and I assure you we are working together on 
these issues that impact our state.
    [The prepared statement of Senator Bill Nelson follows:]
    [GRAPHIC] [TIFF OMITTED] 71270.026
    
    There is no doubt in my mind and in his mind, and I think I 
can speak for him when I say this, that all this money should 
be sent to the Gulf states. There is no doubt that Florida 
deserves and must receive their fair share of this recovery 
money.
    So today, I would like to hear from each of our witnesses 
how this money can be best directed to the recovery efforts 
that should have started yesterday so that these efforts can 
start tomorrow. I am here to listen.
    I want to quickly recognize two members of State government 
that are with us here today, elected to represent this region, 
State Representatives Clay Ingram, who is here--thank you, 
Representative Ingram-and Doug Broxson, who is here. Doug, 
thank you for being a part of this, as well. I appreciate both 
of you being here today, and we are going to open it up after 
the second panel of witnesses. I would love to hear your 
perspective on this, as well. I think it is important that we 
have a strong partnership with our State government officials.
    And with that, I segue to someone we are very proud is with 
us here today, who is on the leading edges of many of these 
issues that we are dealing with, and this is Commissioner 
Putnam who joins us here today. Commissioner Putnam has both 
more Washington experience and now more Tallahassee experience 
than me and he is younger than I am, which is a small group of 
people in politics. But he is someone that is uniquely 
qualified to speak on these issues. He is doing a phenomenal 
job on behalf of the entire State of Florida, but particularly 
on behalf of aquaculture, which is a critical part of our 
economy.
    Commissioner, thank you for being a part of this and for 
sharing your input and insight and for being an excellent 
partner on these issues with us. Thank you.

 STATEMENT OF ADAM H. PUTNAM, COMMISSIONER, FLORIDA DEPARTMENT 
              OF AGRICULTURE AND CONSUMER SERVICES

    Mr. Putnam. Thank you very much, Senator Rubio, and most 
importantly, thank you for being here and physically bringing 
the attention of the United States Senate to northwest Florida.
    As you know, Congress has the attention span of a 20-minute 
sitcom. A year out, it is critically important to continue to 
remind our Federal policymakers of the damage that continues to 
reverberate throughout these Gulf Coast communities. And you 
have got a great panel of witnesses here and a great 
legislative delegation that is going to share some thoughts on 
how Tallahassee has positioned itself and what the continued 
harm is to our charter boats, to our hotel and restaurant 
industries and tourism in general.
    I wanted to focus my remarks on the seafood side. As 
Commissioner of Agriculture and leader of the Department of 
Agriculture and Consumer Services, we are the lead agency in 
the State for food safety. We are also the lead agency for 
promoting what we grow and what we raise in the State of 
Florida through our ``Fresh From Florida'' campaign. So if I 
could, I will just take a few minutes and go over what our role 
in that is.
    I would like to begin by just thanking the legislative 
delegation and Senator Gates, who is also in that northwest 
Florida delegation, for passing the Deepwater Horizon Oil Spill 
Economic Recovery Act that, in essence, says whatever fines and 
settlements do come forward as a result of this horrible 
tragedy, 75 percent of that will stay in the most impacted 
communities here in northwest Florida. I mean, it is a no-
brainer, but I am glad they codified it in the law, because the 
last thing we want is for those fines and settlements and 
recovery restoration monies to turn into a slush fund for other 
communities that did not have the harm, the real harm, that 
these eight counties in northwest Florida had.
    The seafood industry for the State of Florida is $600 
million of economic impact. Fishing, in general, is $8 
billion--$8 billion. And so this is an enormous industry for 
our state and it is one of these great examples of where the 
health of our environment directly impacts the health of our 
economy.
    In the aftermath of the spill, seafood sales declined 
between 35 and 40 percent, and over 60 percent of all seafood 
buyers polled in the immediate aftermath of the spill said that 
they had lost confidence in the safety of Gulf seafood. A year 
later, we really have not seen that public confidence number 
move.
    Our responsibility in the Department, and we have 
negotiated a settlement with BP for $10 million for additional 
food safety testing, and when it is fully ramped up, we will be 
testing 200 samples a week--excuse me, 200 samples a month. We 
have now run a year out, using existing capacity, we have run 
several hundred samples and there has been no indication 
whatsoever of any level of oil residue or dispersant residue, 
the two things that people are most concerned about, in Florida 
seafood. So it is a perception problem, not a substantive 
problem. But the brand that our charter boat captains and our 
commercial fishermen and our oystermen in Appalachicola and 
throughout the State of Florida had built over decades and 
generations was destroyed overnight by the spill. And so our 
efforts are focused on aggressively ramping up that testing 
capacity.
    We have a world class laboratory in the State of Florida. 
It is one of the few in the nation that is a state lab also 
recognized by the U.S. Food and Drug Administration (FDA) and 
National Oceanic and Atmospheric Administration (NOAA) for 
seafood safety. We are making investments in that equipment and 
ramping up the pace of testing, but we have not found any 
evidence whatsoever that there is a problem with the quality of 
Florida seafood. But that perception, that brand damage, 
lingers.
    We negotiated a second component to a settlement with BP 
that involves $10 million in promoting and marketing to undo 
that harm, and as you know, having run an expensive statewide 
campaign, that is a--to rebuild a national brand, it is a drop 
in the bucket. But that $10 million is targeted toward the 
seafood buyers around the country--Philadelphia, New York, 
Chicago, the big brokers--and the people who go into 
restaurants and the people who travel to the State of Florida 
in those key markets.
    Many of you have a copy of the latest edition of the Guy 
Harvey Magazine. We have partnered with Guy Harvey, who is a 
world renown artist, but also a researcher and conservationist, 
to highlight the safety of seafood. You will see in regional 
publications--Coastal Living, Southern Living, those types of 
regional markets--a ramped-up presence of Fresh From Florida 
seafood. You are going to hear later from Collier Merrill, who 
took a road tour of chefs up to New York to highlight for them, 
and I do not want to steal their thunder, but the idea here is 
that we work in concert with all the different entities so that 
it is not the Department of Agriculture doing one thing and 
Visit Florida doing another and the northwest Chamber is doing 
another, to bring harmony to that on the marketing piece.
    It is our goal to begin to bring those confidence numbers 
back up, and part of the challenge and part of the market in 
bringing those numbers back up is right here in Florida, 
because half of Florida seafood is consumed in Florida. And so 
a lot of the story that we have to tell is with our own 
Floridians, and the studies have shown that the closer people 
are to the water, the higher their confidence in Florida 
seafood.
    If you look at the polling, the market research, it is 
communities like Gainesville, Orlando, places interior, that 
have a lower confidence in Florida seafood than coastal 
communities like Tampa or Jacksonville, Pensacola, Panama City, 
Miami. Those all have higher numbers.
    Restoring that confidence is a key part of our effort, but 
also having the world class testing facilities so that we can 
say with confidence that there is no residue, that it is safe.
    It is important, I think, and this is something that Doug 
Darling is here from the Governor's Office as his Deputy Chief 
of Staff, and I know he has worked real hard on the Natural 
Resource Development Assessment (NRDA) process. It is important 
that at the end of this saga, at the end of this tragedy, that 
whatever has been done, we can look back ten years from now, 15 
years from now, and say, this is a permanent benefit to these 
communities in northwest Florida. I do not think any of us want 
to see a situation where we look back and say, well, we spent a 
lot of money on billboards and magazine ads and we do not 
really have anything to show for it. There are conversations 
out there about real infrastructure investments that will 
improve the quality of the fishery, improve our ability to 
continue to bring in charter business, commercial business, 
continue to do good things with our tourism business and our 
seafood business. That more permanent view of how we use those 
dollars most wisely is critically important to protect that $8 
billion industry and expand it even more.
    And so with that, Senator, thanks for letting a House guy 
come to a Senate hearing, and thank you for your commitment to 
restoring these communities to their pre-spill levels and, 
frankly, even using this as an opportunity to make some 
improvements. But from our standpoint, we have a great story to 
tell. The science is with us. The harm is not there from a 
scientific basis. The harm continues to be there, though, from 
an economic basis, and that is what these communities and small 
businesses have to live with every day, one year out.
    [The prepared statement of Mr. Putnam follows:]
    [GRAPHIC] [TIFF OMITTED] 71270.001
    
    [GRAPHIC] [TIFF OMITTED] 71270.002
    
    [GRAPHIC] [TIFF OMITTED] 71270.003
    
    [GRAPHIC] [TIFF OMITTED] 71270.004
    
    [GRAPHIC] [TIFF OMITTED] 71270.005
    
    [GRAPHIC] [TIFF OMITTED] 71270.006
    
    Senator Rubio. Well, thank you, Commissioner.
    First of all, the Commissioner has a big state to serve and 
so he does a lot of driving these days. He drove all the way to 
Tallahassee last night and drove all the way over here this 
morning. I know he has to drive back and continue the hard 
work, but I do have a few questions, Commissioner, that I hope 
you can help us with.
    One is one you understand very well, and that is that as 
Congress begins to consider what to do with the money that 
comes from these fines--this is a big pot of money, and as you 
can imagine and I know you know well, once there is a big pot 
of money available in Washington, people get all kinds of 
ideas. So that is the first thing we are going to have to 
confront. Obviously, I think there will be consensus in this 
room that that money from those fines should be specifically 
targeted to those states and those regions that were most 
directly impacted by this bill because that is why the fines 
happened.
    The question I have is, and you have already kind of 
alluded to it a little bit, the second part of our conversation 
is that once we decide, yes, this money should be designed 
specifically for those regions that were impacted by the oil 
spill, what kind of projects should we be prioritizing? What 
kind of expenditures should we be funding? I think what you are 
going to hear is all kinds of arguments, and not necessarily 
from our delegation, or from anyone, for that matter, elected, 
but extended to its most absurd conclusion, you could argue 
anything is economic development if you really wanted to.
    So, in essence, where do you think we can get the most bang 
for our buck? I read this morning an editorial here locally 
that talked about how we should focus on environmental clean-up 
issues, that, in fact, the environment is directly linked to 
the economy. I think that is a valid point. Others, I think, 
will tell us today that there are some economic incentives and 
economic development projects that could potentially help to 
offset or diversify or balance out some of the losses. I think 
you have talked about some of the things that maybe not enough 
attention is being paid to, and it is just maybe public 
perception, public awareness-type campaigns, where, in fact, 
where there is not a problem but people think there is a 
problem, that one of the things we should be doing is educating 
people to the fact that there is nothing wrong with our 
seafood, that there is no reason why you should not be coming 
to our beaches.
    What is your thought process in terms of what I should be 
saying on where we should be prioritizing the type of 
projects--the types of projects that we should be prioritizing?
    Mr. Putnam. Well, I think that is the key question, and as 
you alluded, it is important that the non-affected states, the 
non-Gulf states, not have their finger in the cookie jar. We do 
not want to see research and development opportunities diverted 
to other universities because there is an oceanography 
department in Indiana. I mean, that is the classic 
Congressional ploy that we have all seen before, where a well-
placed person will use it as their earmark fund, and that 
cannot be allowed to happen. Those funds need to come to the 
impacted states and the impacted communities within those 
states.
    I think continued research is critical. Even before the 
spill--and I suspect that Captain Zales is going to touch on 
this--even before the spill, a lot of our fishermen were under 
assault by Federal regulations based on flawed models that had 
dramatically curtailed their ability to harvest. And so I think 
that there is, frankly, an opportunity and a nexus between the 
resource and the harm, the tragedy done by the spill, that 
funds go into stock enhancement and development activities, 
such as continued reef development.
    There have been some ideas floated about locating buoys and 
markers a certain number of miles offshore to build the bottom 
fishing, to create the artificial reefs, to guarantee that it 
takes pressure off some of the more near-shore areas and gives 
charter boat captains a place to go. Reef restoration for your 
shellfish, for scallops and oysters. A lot of those reef 
development opportunities are out there.
    Other stock enhancement things include hatcheries, which 
other states have been doing for a long time and Florida has 
been doing successfully on the fresh water side, but I think a 
hatchery-type situation is a permanent gift that keeps on 
giving. It continues to build that ecosystem and build that 
fishery that draws people here for world class fishing, world 
class beaches, world class seafood, and you have all of those 
things interconnected and there is a nexus between that gain 
and the harm that was done by the spill.
    So those types of permanent things, I think, are important. 
It is critical for the local communities, the local lawmakers 
and commissioners to have some say in that. I think that this 
is not a situation where Washington should dictate what all of 
these projects are. I think Florida has done a good job 
developing a consortium of all of our state universities to 
avoid them fighting with one another over research dollars. I 
think that that consortium concept has worked fairly well in 
terms of channeling the research and development dollars that 
have already come and creating a model for future dollars.
    So those are some of my thoughts on how we proceed. But I 
do think it is important that workforce development and 
retraining efforts, the research and development pieces, and 
the restoration and stock enhancement pieces of that puzzle be 
a part of that final use of those dollars.
    Senator Rubio. I think the only issue that I think is--
that, again, has a political dynamic to it, as well--is once 
the money, God willing, reaches the State of Florida and that 
money begins to be spent through state entities and counties, 
et cetera, are some of the regional conflicts that begin to 
emerge with regards to how that money should be spent and who 
was impacted more and so forth and so on. Kind of the direction 
I have been headed in my thought process, and I would be 
interested to see your input on it because I am open-minded on 
all these things, is that what we need to decide is on the type 
of projects you have just outlined, a bunch of them, and let 
the money chase the projects as opposed to the money simply 
chasing the geography, and I think what you will find if you do 
that, if the money goes after the projects rather than just the 
geography, you will find that the geographical areas that were 
more impacted are going to see themselves being treated fairly.
    But that is an issue that has become recurrent and I would 
not put the horse too far ahead of the cart here, because I can 
assure you that this issue of how the money is going to be 
spent is going to be--it has some ways to go in Washington, and 
the direction it is headed in some regards has been 
interesting, to say the least. It is a crash course for me in 
the politics of how money is spent up there.
    But just any thoughts about how we manage that once the 
money gets here, between regions? When I mean regions, I think 
there is general consensus, by the way, in the state, from 
everyone I have talked to, that we are talking about the Gulf 
region. We are talking about regions within the Gulf region. We 
are not talking about people down in Key West thinking they 
should be at the table the same way that people in the Gulf 
region are with regards to oil spill impact. I am talking about 
different counties and different potential projects that may be 
competing with each other here in this region for the same 
availability of funds.
    Mr. Putnam. Well, you know, I think, clearly, this tragedy 
did impact the entire state. There were lost bookings 
throughout the state and a perception problem throughout the 
state. But the bulk of the actual harm is in these eight 
counties, and because of the leadership of the legislative 
delegation, there is now some certainty that the bulk of the 
funds from fines and settlements will come to northwest Florida 
and to these eight counties.
    The eight counties, and I think your point is well taken, 
they need to be wise enough to understand that this is one of 
those moments for regionalism. This is not the time for the 
Panama City versus Destin versus Pensacola fight. I mean, this 
is what do we do to market our region? What do we do to repair 
our region? What do we do to build our resources that are the 
reason why people come to our region? And I know that that is 
easier said than done with a lot of impacted parties and a lot 
of sub-units of government.
    But this is one of those times when all of us need to step 
up as a region and say, this is what we need to do for 
northwest Florida and all of us will benefit if we have 
something that channels our energy in the same direction 
instead of splintering off, because if we splintered off, in 
five or ten years from now, we are going to look back and say 
the State of Florida got over $100 million and what do we have 
to show for it? Do we have new pilings at the marina? Do we 
have waitresses and waiters who were given $8,000 to $15,000 
that was a shot in the arm in the economy for a short period of 
time, but we have not done anything to fundamentally strengthen 
our economy and build on the pillars that we have with seafood 
and tourism and the military to really build that generational 
difference, and that is why we have got to think regionally on 
this one.
    Senator Rubio. Commissioner, I appreciate your time. I know 
how busy you are. As we told you at the outset, you are welcome 
to stay the whole hearing. I know you have other commitments 
and places you need to go, so we are just grateful you made the 
drive to be a part of this day and we look forward to continue 
to work with your office on these issues.
    Mr. Putnam. Thank you for the great work you are doing for 
the State of Florida in Washington, and more power to you.
    [Laughter.]
    Senator Rubio. Better me than you, right?
    [Laughter.]
    Thank you.
    Mr. Putnam. I appreciate it.
    [Applause.]
    Senator Rubio. We are going to call our second panel now 
and I will introduce them.
    First is Mr. Collier Merrill. All of you know him well. He 
is the Chairman of the Pensacola Chamber of Commerce. We have 
Mr. Joe Gilchrist, who is the owner of the Flora-Bama Lounge, 
Package, and Oyster Bar, and Captain Robert Zales is the 
President of the National Association of Charterboat Operators. 
They are going to take their seats up here and----
    [Pause.]
    Captain, why do we not start with you. Are you ready?

     STATEMENT OF ROBERT F. ZALES II, PRESIDENT, NATIONAL 
 ASSOCIATION OF CHARTERBOAT OPERATORS AND PANAMA CITY BOATMEN 
                          ASSOCIATION

    Mr. Zales. That is all right with me. I am ready. Thank you 
very much.
    Senator Rubio. All right. Thank you for being a part of 
this.
    Mr. Zales. Thank you. Senator Rubio, my name is Robert F. 
Zales II. I am appearing today on behalf of the National 
Association of Charterboat Operators and the Panama City 
Boatmen Association. NACO and PCBA thank you and the committee 
for your kind invitation to present testimony on the critical 
issue of the impact of the Deepwater Horizon oil spill and 
status recovery efforts in Florida.
    NACO is a nonprofit 501(c)(6) association representing 
charterboat owners and operators across the United States, with 
a substantial number in Florida. PCBA is a local association 
representing the local charterboat fleet in Panama City. I also 
wish to point out that I am a simple charterboat operator and 
not accustomed to providing formal testimony such as this, so 
please pardon my rambles in what I provide.
    Charter, commercial, and saltwater recreational fishing is 
extremely important to Florida and the Gulf of Mexico, both 
economically and socially. In 2008, there were 90,000 
Floridians directly employed in recreational fishing-related 
businesses. Florida alone accounts for 40 percent of all marine 
recreational fishing nationally, with $9.7 billion in total 
sales from recreational fishing in 2008.
    As a result of the blowout, charter fishing customers began 
canceling their trips and family vacations. This began the end 
of the fishing season, which had begun as a promising season 
after the last two years of overly restrictive Federal 
regulations and sour economies. The Gulf Coast Claims Facility 
(GCCF) was established to provide those affected by the impacts 
of the spill with their economic losses. To many of us, the 
GCCF has been a massive failure, as our claims are either still 
in review or ridiculous offers have been made. We see recent 
reports from commercial and recreational fishermen of harvested 
fish being seen with several health issues, and according to 
the National Marine Fisheries Service (NMFS), possibly infected 
with Vibrio vulnificus, very harmful to humans. More important, 
more studies are now underway to determine the extent of this 
issue and to attempt to discover the cause. This year, Mother 
Nature has provided great weather. Our waters appear to be 
clean and free from oil in areas we can see. Our fishing, with 
the exception of the sick fish, has been as good as ever and 
business has been good for most. Still, we live in fear of the 
future.
    Millions of gallons are still unaccounted for and located 
somewhere. The fish we see harvested are from year classes 
prior to the blowout. The 2010 year class for many of the prime 
species is highly questionable. Contrary to a report produced 
by Mr. Kenneth Feinberg released on January 31, 2011, stating 
harvest levels will return to normal by the end of 2012, 
several renown fishery biologists say it will be a minimum of 
three and could be five years or longer before we have any real 
knowledge of the impact of these species.
    Our future needs: It is imperative that the fines that will 
be assessed as per the Clean Water Act (CWA) for this disaster 
in the Gulf are dedicated to the Gulf. You will hear from many 
organizations, communities, states, and others, all with their 
respective hands out for funding. Charterboat owners do not 
have organizations with the infrastructure to seek this 
funding, so we ask for your assistance to help us. We do not 
seek individual economic help from the CWA fines, although we 
should--should we find in three to five years that the fish 
species we seek are in dire straits, we will certainly need 
financial assistance to survive.
    Our needs are resource oriented. We must have an ecosystem 
that is capable of sustaining our fishery resources. We must 
expand funding for cooperative independent research of our fish 
which will utilize vessels from the charter fishing fleet. This 
data is recommended by the NMFS and can be done through grants 
to nonprofits in conjunction with universities and state 
wildlife agencies.
    Funding for improved and yearly stock assessments should be 
provided. In the Gulf, most fish stock assessments are 
conducted only every five to seven years. We need adequate 
funding to ensure our natural and artificial reefs are clean 
and intact. Enhancing our artificial reef system is a priority.
    Research funding to further study fish health must also be 
a priority. Our prime interest is to ensure that the fish we 
harvest are safe to handle and consume. We must know with 
reasonable certainty that any fish that appears to be unhealthy 
is properly handled and tested so that consumers can have 
confidence that are catching and eating quality Gulf seafood. 
Many of the fish health issues have never been observed before 
the blowout, so it is a must that the cause of any health 
issues be known as soon as possible.
    Funding from the CWA should also be used to advertise that 
the charter fishing fleet is alive, well, and ready to serve 
the public. I suggest that a panel of a variety of stakeholders 
be created who will be responsible to distribute CWA funds for 
the various needs of the gulf. Politics and the buddy system 
should be removed from the process. Once the funds are received 
and proposals for the various research and renewal projects are 
provided, the panel should be charged to make recommendations 
that will ensure the most important and effective projects are 
funded and activated. There must be stipulations that the 
charter fleet will be actively involved in fishery independent 
research.
    In closing, I wish to state that the Gulf Charter Fleet was 
once a viable, productive, and sustainable group of small 
business owners. We provide a necessary service to individuals 
who want to fish and enjoy our natural resources. Over the last 
six years, the fleet has struggled and yet continues to 
survive. The impact from the Deepwater Horizon oil spill was 
almost the last nail in the coffin. It is imperative that the 
CWA fines be dedicated to the Gulf, that they be properly 
utilized to ensure the health and safety of our Gulf, and 
ensure the sustainability of the charterboat fleet.
    The charterboat fleet owners, operators, and crews are the 
first responders to any issue on the water. We care for our 
Gulf and all things within and around.
    Senator, this concludes my testimony. Again, I appreciate 
the invitation and opportunity to provide you and the committee 
with this information and I will be pleased to answer any 
questions.
    [The prepared statement of Mr. Zales follows:]
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    Senator Rubio. Thank you, Captain.
    We will move next to Mr. Gilchrist. Thank you for being 
here today and being a part of this field hearing.

STATEMENT OF JOE GILCHRIST, OWNER, FLORA-BAMA LOUNGE, PACKAGE, 
                         AND OYSTER BAR

    Mr. Gilchrist. Thank you, Senator Rubio. I wanted to make a 
couple of remarks before I got into my prepared statement.
    One was I agree with Mr. Putnam that long-term investment 
in our communities is critical. At the same time, we have 
short-term needs and promotion for the communities to rebuild 
the economic and tourism structure and others. Obviously, what 
we need long-term is a balance between environmental 
investments, including artificial reefs, and shorter-term 
promotions of the area.
    And I will also say that I went snapper fishing last week 
and caught an excellent red snapper to eat. Obviously, I am not 
starving.
    One of the concerns of our coastal communities--and these 
are as relayed to me by my employees and customers and people 
that I meet from all over the world--relating to the disastrous 
oil spill was, frankly, that poor stewardship by the United 
States Government got us here. With all the money that has been 
cycled through Federal, State, and local agencies, to have no 
one be prepared for something to go wrong is not logical. In 
fact, the planning and protection of our society has been a 
disappointment to a lot of Americans.
    Sadly, also, news media in America. I saw the same picture 
on TV of a pelican in Louisiana for 90 straight days. That 
pelican survived, but it did not seem to be proper stewardship 
of the nation's best interests. I have no problem with accuracy 
in news reporting, but it seemed like the only goal of many 
people in the news media was to get more people to watch.
    BP and the other companies have all created a resolution 
process that has been very favorable to some people, and they 
are happy. Some people have abused it. But, unfortunately, 
there is a residual number of people and businesses that have 
not had resolution to this and I do not think that is 
successful for our society. I would like to encourage some 
outside-the-box thinking to help get some resolution, perhaps 
some ombudsman intermediary between Mr. Feinberg's team and the 
people that are not able to reach resolution, because it seems 
an awful lot of arbitrary decisions are being made by people 
that nobody can find, nobody can document, and nobody can hold 
accountable.
    My business is fairly representative of the coastal 
communities, I believe, along the coast from Louisiana through 
Florida. We deal with tourists from all over the world and in 
our regions, and I think we were looking at a 10- to 15-percent 
gross increase in each of 2010 and 2011. We went from being 
about 15 percent ahead of prior year's business in April to 
where we were 15 percent below in 2010. The net result is that 
at this point in time, our businesses and the ones that I 
oversee, look at, are only up six to eight percent over 2009, 
and since most net income comes from the last 20 or 30 percent 
of your gross income, it severely impacted our ability to grow, 
pay for ourselves, and, of course, pay for the 50 percent of 
our gross that goes to Federal, State, and local governments.
    And our real estate, construction, and recreational 
communities were and are still struggling with after-effects of 
this. I think some more longer-term, medium-range investments 
in the coastal communities will probably be helpful. Of course, 
this is all in the middle of our current economic challenges 
that everyone has across the country.
    Finally, we should not forget that BP promised to make our 
communities whole, and I think this is a difficult project to 
do, but I believe that it requires more time to do so and so I 
would encourage us to look at two- to five-year time frames of 
periodic investments in the communities.
    Finally, I just end up with some questions. As a new storm 
season approaches, nobody can predict what will happen and what 
the consequences will be of what is in the Gulf. I personally 
think it was a mistake not to allow oil to rise to the top, be 
skimmed by skimmers that are part of the international oil 
community. We did not avail ourselves very effectively of that. 
So the longer-term effects of correcting it and trying to keep 
oil from rising to the top may be, as many people discern, a 
longer--a bigger problem. The fact that there is no solution 
that would allow a wellhead to be covered and oil to be 
recovered at the top to me makes no sense.
    As clear as it is that BP and its partners did not act 
responsibility, the Government of the United States has also 
failed in some of its responsibilities. So I guess the final 
question is, at what point in this process should the average 
citizen or business feel like we are moving toward a just 
conclusion?
    Thank you for your time.
    [The prepared statement of Mr. Gilchrist follows:]
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    Senator Rubio. Thank you.
    Mr. Merrill.

 STATEMENT OF COLLIER MERRILL, CHAIRMAN, PENSACOLA CHAMBER OF 
                            COMMERCE

    Mr. Merrill. Thank you, Senator Rubio, and I, too, want to 
echo I appreciate you being here. I know it is unusual to have 
a Senate hearing outside of Washington, but we appreciate you 
coming down and doing that and we certainly appreciate 
Commissioner Putnam being here.
    I am going to jump right in with what Mr. Gilchrist ended 
with, on the efforts that happened after the spill. A year ago 
today, we were still having two million gallons of oil pump 
into our gulf every day and it was disheartening not to know 
where that end was. Every day, two million gallons was going 
into there, and you touched on it, Senator, at the beginning, 
of how many barrels were going, total barrels, five million 
barrels. But it came down to two million gallons every day, and 
it went on for 85 days.
    And there has got to be a way to stop that, whether we have 
a--put a billion or two billion into some kind of recovery 
vessel that is parked somewhere and takes even a week to get 
there. It is better than sitting every day, day after day, and 
you see those--when BP finally released the videos a month into 
it of the oil spewing out of the bottom of the gulf. And that 
was such a damper to people, as I had workers quit and leave, 
not knowing when it is going to end, and we have to go home at 
night and just watch it continue to spew, and with no recovery 
planned. They are going to drill this well down and release 
pressure or do whatever.
    So I want to echo what Mr. Gilchrist said. If nothing else 
comes out of this going into the record of trying to enforce, 
there is a lot of oil wells out there across the world and 
nation, to put some kind of fund, that they have some kind of 
recovery vessel. I have paid a lot of money over the years, 
taxes, for fire trucks. I have never used one. Thank God, I 
have not. But they are out there and they are ready to go 
should something happen, and we need to have some kind of 
recovery vessel, I would believe, for offshore, as Mr. 
Gilchrist talked about, that can come out there, and I do not 
know what they do--I am certainly not a scientist--that can do 
something. For that kind of money, somebody could build a ship 
that could go down and cover that until the oil was--relief oil 
well was drilled and release the pressure or whatever, but 
somehow to funnel that oil back to the surface and be able to 
pick it up, build the ship, whatever is out there.
    Like I said, I am not a scientist and we will leave that to 
people that are, but hopefully, so that the next time something 
like this happens, and I think it is just going to have to 
happen--at some point, it will--there is something there 
besides we are trying a test well that hopefully will relieve 
the pressure, as we just sat over here in the Panhandle and day 
by day watched two million gallons a day, every day, spill into 
there.
    Second, and everybody has touched upon it on this panel and 
the earlier panel, on the fine money, and I, too, want to thank 
Senator Gates and our delegation for leading the effort, 
getting this Oil Recovery Act passed. We are in a tough time 
here in the State of Florida, and to get $10 million a year was 
no small feat and I appreciate it, and it is $10 million a year 
this year, next year, and the year after. So we have got $30 
million that we are going to help diversify our economy with.
    Then I heard you, Senator Rubio, ask Commissioner Putnam 
about, what are we going to do with this money? Where is it 
going to go? You know, we have already got a plan in place that 
was passed with this bill, as you said, on the 75 percent of 
the fine money will also go to the eight counties affected by 
oil. And we ask you, Senator, to try to make that happen at the 
Fed level, as well, as money comes in. That is where it needs 
to go.
    The plan as it stands now, and it is still in the works, of 
exactly what this $10 million will go to, and hopefully the 
fine money will follow suit, is kind of what was said earlier, 
you know, the project. The money will follow the projects. And 
the money right now is going to be administered through the 
Governor's office, come to the University of West Florida 
through the Haas Center, and Dr. Rick Harper and his staff 
there will be in charge of vetting these projects out as the 
Governor and his department--Grace Wupu is running that, will 
be here in a couple weeks and continue to work on how exactly 
that system will work.
    But there will be procedures in place, and as Senator Gates 
very eloquently said, if there is a lot of infighting here in 
these eight counties, he will march down to the Senate floor 
and take the money back, and he will. So hopefully that process 
will be in place. It will knock out any infighting, and it will 
be what is best for the eight counties and not individual 
counties or cities or anything else. And we are excited about 
that.
    Senator, in the previous Administration, some of the money 
that came in early, last year, was sent to other parts of the 
state. Some marketing money came in. There was an ad that came 
out somewhere in South Florida, it had somebody covered in 
lotion and it said, ``The only oil on our beach is suntan 
oil,'' and it was just a direct market against Pensacola, and 
that happens. Cities market against each other, but there is a 
good chance that that ad was paid for by BP money, because that 
money that was supposed to come up to us was sent to other 
parts of the state and it is just wrong. It was wrong. Twenty-
five million came in early and it was not handled correctly up 
to the eight counties that actually were affected by oil. And I 
heard you say loud and clear, I heard Commissioner Putnam, and 
I appreciate your efforts on that, that the money that comes in 
is spent to the places that need that.
    And the last thing I want to touch on briefly is what has 
also been said here is the accountability of BP needs some 
teeth behind it somewhere, because we continue to hear, and I 
am not speaking on behalf of the Chamber or anybody else, but 
just from what I hear out there is that they continue to tell 
the same story, well, you are going to hear something in 60 
days. You are going to hear something in 90 days. And those 
things come and go and, well, we did not hear anything. Maybe 
later.
    The last time--I speak from personal experience--that we 
were going to hear something in February, and then in February, 
they said, okay, you need to redo all your claims, and we had 
several different organizations that had claims in. Redo your 
claims and then in 90 days, this new system we have now--90 
days from now. I know you are not happy because you waited 
since last September, but now redo them all and in 90 days, we 
are going to have the fix. That is 140 days ago, and nothing.
    If you could at least have somebody to talk to and say, 
well, this is where you are and we need these questions 
answered, but it is under review, it is under review. Can you 
give me somebody to talk to? There is nobody ever to talk to.
    And I heard Mr. Feinberg say, ``Well, we were just 
overwhelmed by so many claims,'' and we started hearing that a 
year ago, how many claims they are overwhelmed by. Well, hire 
more people. You know, we told him that last year. We told him 
that in December. We told him at the February meeting when he 
said he is still overwhelmed by the number of claims that have 
come in.
    After Katrina, 1,600,000 people filed claims with their 
insurance companies. They hired 15,000 adjustors and they came 
out and knocked out 98 percent of those claims in a year. You 
know, that is what you have got to do, and they come in and 
they--nobody wants a hurricane, and everybody is not exactly 
happy with the insurance companies, but they come up with a 
settlement, they do it, and they get on with their lives. As 
Mr. Gilchrist said, this just continues to linger and linger 
and linger.
    I want to end with, once again, we appreciate you being 
here and I am here for questions. Thank you.
    [The prepared statement of Mr. Merrill follows:]
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    Senator Rubio. Thank you.
    I think before we have further questions, and it is kind of 
not in the script, but I would like the two members that are 
here from the legislative delegation to provide their brief 
input. I do not know how we can do that. We have a microphone 
here if you guys want to share it, and maybe get an extra chair 
because we talked so much about the Oil Spill Recovery Act a 
little bit here early on, so I am interested in how that played 
out in terms of the view on the $10 million the state is 
putting forward.
    One of the things, A, I think if there are some projects 
that are already in mind and the $10 million acts as seed money 
to that, that we can make sure that there are not redundancies. 
On the other hand--I guess what I am trying to say is I want to 
make sure that whatever we do at the Federal level complements 
the intent of the state legislation, not contradicts it or in 
some ways duplicates it in an unnecessary way. So thank you for 
being a part of this, both of you. You both entered the same 
year, did you not, so I do not even know who is senior. Who 
wants to go first?
    Mr. Ingram. He is better looking. I will let him go first.
    [Laughter.]

 STATEMENT OF HON. DOUGLAS V. BROXSON, A REPRESENTATIVE IN THE 
                FLORIDA HOUSE OF REPRESENTATIVES

    Mr. Broxson. Senator, thank you very much for being here. 
Our delegation has taken a fairly active position in dealing 
with the Gulf Coast Claims Facility, and first of all, I want 
to applaud BP for stepping up and offering the gulf coast $20 
billion. I think they were on a guidepath to pay families and 
businesses for their loss. However, it is our strong opinion 
when they retained Mr. Ken Feinberg to administer the Gulf 
Coast Claims Facility, he created a network of rules and 
regulations that virtually shut down the process.
    To date, BP has paid about $4 billion of the $16 billion. 
Last year, they wrote off $38 billion in losses, considering 
the anticipated payout they have not made. And what we would 
like to see is that the remaining $16 billion go to a new 
claims network of the states and counties represented by the 
oil spill to filter this money back to the citizens and 
businesses of the area. And I would pray that you do not allow 
this money to go back into the coffers of BP, that this money 
that they promised us, that should have been paid out, was not 
paid out, and we expect them to fulfill their obligation to the 
gulf coast.

STATEMENT OF HON. CLAY INGRAM, A REPRESENTATIVE IN THE FLORIDA 
                    HOUSE OF REPRESENTATIVES

    Mr. Ingram. Thank you, Representative.
    And then, Senator, thank you so much for coming here and 
bringing the spotlight of Washington here on this problem. It 
means a whole lot to me and I know the rest of the delegation.
    There is not a whole lot more I can add than what you have 
heard directly from the folks that were affected the most, but 
a few things I would like to echo.
    First of all, from the delegation's standpoint and State 
government's standpoint, we did, I think, what we could do with 
the Oil Spill Recovery Act. I think it was a step in the right 
direction and the right thing to do. It had support from home, 
and then the Governor's office helped. Senator Gates 
spearheaded the effort, and I think it was great that we could 
do that from the standpoint of State government.
    The other two things I would like to echo, and this 
piggybacks on what Joe Gilchrist said, is I hope that as you 
take this back to Washington, the Federal Government looks at 
the nuts and bolts of what happened and can be prepared from 
the emergency standpoint. I know Collier alluded to that, too, 
comparing this to lessons we learned from other disasters, 
hurricanes and things like that. After some of the hurricanes, 
President Bush, I know, waived the Davis-Bacon requirements to 
allow things to be rebuilt faster. Maybe at the Federal level 
the next time--knock on wood, we hope this never happens 
again--but being able to waive portions of the Jones Act to 
allow foreign vessels to come and aid in cleanup and making 
things go faster. If we can look at those nuts and bolts things 
we can do to make cleanup happen a lot faster and prevent oil 
from getting to the shores, I think that would be tremendous.
    And the other aspect, and Representative Broxson alluded to 
this, is that the folks who were affected the most, you know, 
the fishing boat owners, business owners like these guys 
sitting here at the table, if they are not paid by the Federal 
Administrator, for some of these folks, it is too late if they 
do not have the money in their hand. They have already been 
foreclosed on. They cannot eat. Their kids are going without. 
So from the standpoint of being a United States Senator and 
being able to maybe put pressure on the Administrator to make 
those payouts now, because I think there becomes a point where 
it is just too late. If you have been foreclosed on or you 
cannot feed your family, the promise of getting a payout down 
the road does not matter. So for some of these folks, it is too 
late, but whatever we can do from this point forward to put 
that pressure on the Federal Administrator, I think is very 
important.
    So thank you.
    Senator Rubio. Well, let us--here are some questions that I 
have, and I want to break it up into two parts. I mean, let us 
close the loop on the claims process because it is still a very 
sore subject for obvious reasons.
    My perception, based on what I have heard in the past 
before coming here today, is that the problem is the process 
itself. It takes too long and no one is given a reason--there 
is no clear understanding as to why it is taking long. Collier, 
you talked about recently where people had submitted claims, 
had filled out the paperwork, and then were told, we have 
created a new form and a new process. Fill out this form and 
that will be done. It will be faster and move quicker than the 
other one did. They have done that. They are still waiting.
    Is it--and I do not know. In your mind, what is the biggest 
problem? Is it just a time frame, the length of time that it is 
taking to pay the claims? Is it a combination of that and some 
of the people that have been denied, some of the rationales 
behind the denials do not make sense? What would you identify 
as the two or three real sore points with regard to the 
existing claims process?
    Mr. Ingram. The thing we hear a lot is that there is fraud 
in the system, and I am sure there is, that people try to 
make----
    Senator Rubio. I am sorry, that you hear a lot----
    Mr. Ingram. From BP.
    Senator Rubio. Oh, from BP. I beg your pardon.
    Mr. Ingram. Collier may be better able to answer that, or--
--
    Unidentified Speaker. About the fraud allegations, you 
mean?
    Unidentified Speaker. Payouts from [indiscernible], I 
guess. I mean, I guess what they are on the lookout for are the 
fraudulent claims, and that is a legitimate concern----
    Senator Rubio. Right.
    Unidentified speaker [continuing]. No doubt about it, but 
to allow that to hold up all payouts, or most legitimate 
payouts, I think is probably something that ought to be looked 
at.
    Mr. Broxson. I think Collier mentioned that we are equipped 
to handle major storms and companies bring in a massive amount 
of adjustors. The thing that you have there is you have a 
contract. They know what they are supposed to do. The reality 
is, the problem with the Gulf Coast Claims Facility is that 
there is no contract. One person goes in with one set of 
circumstances and gets paid. Another person goes in with the 
same circumstances and does not get paid.
    If there was a ground of understanding of what their 
expectations were, this would help. I have spoken to Mr. 
Feinberg two or three times and encouraged him to do that, also 
to have someone from the Department of Insurance here in 
Florida to shadow his procedure to see that people are being 
paid properly and fairly. In some cases, they were paid 
unfairly. The concept of paying out $25,000 to a business, if 
that business received $10 in compensation that they justified, 
they are entitled to $25,000. But a business that has a $1 
million loss of income is still entitled to $25,000. That makes 
absolutely no sense.
    But, frankly, I do not think there is any salvation for Mr. 
Feinberg and the GCCF. I believe we have to create a new 
entity, and the $14 billion that is left should be reinvested 
back into the five States that were impacted. And Florida, 
which we are not an oil producing State, we need our 
proportionate share that 19 million people bring to the table.
    Senator Rubio. In terms of the--one of the things I am 
interested in about the claims payments, those are not tax-
exempt, correct? If a claimant receives payment, they pay taxes 
on that money, is that correct?
    Mr. Broxson. That is correct, both those individuals and 
businesses.
    Senator Rubio. Right. So I would imagine I know the answer 
to this. This is what they call a leading question. Would it be 
helpful if those claimants were tax exempt?
    Mr. Zales. If I could, and in the last Congress, we tried 
to get a bill through Congress to make the payments from not 
only that, but the emergency payments that started right after 
the spill through the claims and final payments, to have them 
tax exempt, and we were unsuccessful in doing that because of 
all the issues that you are well aware of.
    Senator Rubio. The revenue adjusted----
    Mr. Zales. Right, and--but it would be a tremendous help if 
something like that could come across and then, you know, you 
can make it retroactive to last year and the payments that 
people have made on their taxes, which in many cases the money 
that they received which got them through the year, they had to 
pay back to the Federal Government, and so they are right back 
at square one. So that would be a tremendous help, if something 
like that could happen.
    Senator Rubio. I think that--let us move beyond that. It is 
pretty clear, and I think your statement, you all--there are 
some people that have been helped by the claims process. They 
have gotten their money, obviously not in a tax-exempt way, and 
they have moved on. There are many others that have had 
denials. They have gone in and basically there are two claims 
that are virtually identical or very similar. One gets paid. 
One does not. There is no rational explanation for it. Some 
people are waiting forever with no clear explanation as to why 
it has taken so long to pay them. It sounds like it is a 
combination of no clear, at least in the minds of those here, 
from the testimony here today, no clear parameters as to how 
they are making these decisions. It also sounds like 
potentially it is a manpower issue. Have they hired enough 
processors on the claims?
    Mr. Merrill. I do not know how many they have hired. 
Representative Broxson might know. He tried to pay a visit at 
their office one time and did not find a lot of people working, 
and I will defer to him on how many people they have hired. But 
what we hear is, ``We are overwhelmed by the number of 
claims,'' and I get that. So hire more people. You know, we 
heard that back in August a year ago, back in July a year ago, 
and then in August, September, and we just continue on. Then 
hire more people.
    And then, as Representative Broxson and Representative 
Ingram said, they would come up with these different formulas. 
All right. We are going to start over. We are going to start 
over. So we bought into that a couple of times. Now, here we 
are. We were going to start over in February and we are going 
to have 90 days. ``We hate telling you that again because we 
know you have been waiting,'' is what their response was. Maybe 
60, but by 90, you are good. Well, that was, for me personally, 
it was 142 days ago that they received my claim, verified they 
received my claim, on several different businesses, and we just 
cannot tell you what is going on. We do not know.
    So I will defer to Representative Broxson on the number of 
employees they have.
    Mr. Broxson. Well, originally, they had 3,500, and they 
had--they went--and I do not want to be a complainer, because 
it is really over, but they promised those jobs would be on the 
Gulf coast. They were in Ohio, Virginia, and Washington, the 
State of Washington.
    Senator Rubio, I do want to tell you this. I admire you for 
being here. I think it is a great step. However, no matter what 
you do or what any other Senator or Governor or Representative 
has done, the process and Mr. Feinberg have total immunity from 
our criticism. He will tell you, and he probably has told you, 
that his boss is the President of the United States and that 
when he complains, he will listen. That is a pretty high hurdle 
to get over when you are trying to deal with someone to get 
them to adjust to a procedure. That is why I believe that we 
have to move on beyond that process and establish a new one to 
administer the balance of that money.
    One of the Justice Department attorneys of the Southeast 
did say that he did not think it was fair for that money to go 
back into the coffers of BP, and I would strongly pray that you 
do not allow that to happen. I mean, they, in fact, have taken 
the tax advantage for spending that money that they did not 
spend. So whatever influence you can levy from the Congress 
would be a great help to us to----
    Senator Rubio. Just to be clear, your concern is that BP 
after a while will say, ``We reviewed all the claims that are 
worthy and we still have money. It did not add up to the total 
amount of money we had set aside, and so we are going to 
reclaim this money back into our coffers.''
    Mr. Broxson. Exactly.
    Senator Rubio. Okay. Well, we are going to--all of this 
testimony here is on the record and we will, as we move 
forward, we are going to talk to some of the other Senators 
involved on these issues and figure out how we can try to 
influence Mr. Feinberg's boss, and we have some ideas and we 
will--yes, I am sorry, Captain.
    Mr. Zales. If I could add, because I am one of the people, 
I have had a final claim in since February, and as far as I can 
see on the Internet, it is still under review. But there are a 
lot of people in this same situation, and I was a member of 
Governor Crist's Economic Recovery Task Force and Mr. Feinberg 
came to us several times. I am glad to hear finally he has a 
boss, because he told us at every meeting he did not have one. 
He was completely independent, like he was king, which is 
essentially how he plays.
    So, clearly, some kind of oversight needs to be put there 
because there is absolutely no transparency in the process at 
all. You cannot find anything out about your claim from 
anybody. It is--I do not--it is worse than pulling hen's teeth. 
So that is the process that everybody is in, and there is no 
rhyme or reason to it. It is like somebody else said here. One 
person can go in--you can have two identical sets of records. 
One person can go in, they come out and they are taken care of. 
The other person will go in and they do not get anything at 
all. There is no standard to the process.
    Senator Rubio. Well, again, and I do not want to put 
something--I am not committing to something, because I have not 
thought about it, we have not thought about all the 
implications, I have not talked to anybody about this yet, but 
one of the things we can consider is whether, if a bill moves 
forward, as I anticipate it will, with regards to the fines 
under the Clean Water Act, whether this claims process will be 
pulled into that legislation and somehow some mechanism be made 
a part of that legislation that helps close out the rest of 
these cases that are out there and prevents exactly what it is 
you are concerned about, which is the money being reabsorbed by 
the company.
    And again, that is not something I have talked to anybody 
about. It is just a spur of the moment thought based on the 
testimony I have heard here today and how perhaps this bill 
could act as a vehicle to try to address these things and 
define, moving forward, how we are going to close out this 
process a year and whatever after it has already happened.
    So let us move on to the Clean Water Act, and I will 
explain to you, frankly, what some of my concerns are. There 
are a couple of hurdles to be overcome in a bill in Washington 
to take this fine money and assign it to the States.
    The first is kind of a philosophical/ideological argument 
by some that this money should not be assigned but rather 
should be absorbed into the General Treasury of the United 
States. I am not sure that is a majority position, but I think 
there are some that will have that position and there will be a 
debate about that. In what form and in what set-up, I am not 
sure, but there will be a debate among some that will argue 
that it is not right for this money to be assigned to a special 
fund, but rather that the money should go the way the money 
would normally go, and that is the General Treasury of the 
United States.
    So I think it is critically important that the Gulf states 
are united in presenting a united front on why it is important 
this money be assigned, and the argument is this is not general 
revenue. This is not the money that is normally collected. This 
is money that is being collected because of a specific 
incident. It is a fine related to a specific incident that 
occurred, and, therefore, the funds from that specific incident 
should go toward the damage caused by that specific incident 
and to prevent such incidents from happening in the future. 
That would be our argument. Others will argue differently. So 
we need to be careful about that.
    The second danger is that this huge pot of money is going 
to be sitting out there, and I assure you that there are those 
who already have designs on it, including those who are far 
removed from the spill. There are Senators and Congressmen from 
all over the country that see this as an opportunity to fund 
something they have had their eye on for a very long time, a 
condition of their vote, unfortunately--and I say this--let me 
rephrase that. And a condition of their vote may be that 
somehow this money, that a portion of that money be made 
available to them, to their state, to their project, even 
though it is far from home.
    And the reason why I put that at the table is because 
looking three steps ahead, you can very quickly find yourself 
in a situation where our choice may be a bill that has most of 
its money to the Gulf region but has other areas of the country 
picking at it, getting their piece of the money, because 
otherwise they are not going to let the bill move forward, or 
no bill at all. And I lay that on the table because there is no 
way we are going to avoid that debate. There is just too much 
money sitting out there for it not to be attractive, like a 
shiny object.
    So I want to lay that out there because that conversation, 
at some point, could happen, where we are going to have--we may 
have to make a decision about whether we do not vote for this 
thing at all because we think it is wrong that money that comes 
from a BP oil spill in the Gulf is going to fund some project 
on a lake, you know, 1,500 miles away that had nothing to do 
with the oil spill, or worse, going to fund some new airport 
somewhere else in the country.
    I know this may sound nonsensical to you. I have been in 
Washington six months. I am learning. These things happen, 
unfortunately. So I want to lay that on the table because I do 
think that you may hear about that, that it may happen. And I 
am not committing one way or the other, other than to tell you 
that it is disturbing to think that we may have to vote for a 
bill that would have that kind of stuff in it when it goes 
against all of our principles and where we think that 100 
percent of this money is the result of the BP oil spill, 100 
percent of the money should go toward that.
    Now, that being said, I want to explore a little bit more 
how--what kind of projects we should be funding, because I 
think that is going to be an important part of how this bill 
gets put together, and what I heard today, moving forward, are 
three different directions for the money to be spent. And I 
think I heard arguments from most of the testimony here today, 
and we are going to open it up to the public, but in favor of a 
combination of all three.
    The first is ecological concerns. There is a bunch of oil 
that is still missing. Where is it? What does it mean moving 
forward? How can we restore some of these reefs, particularly 
the artificial reefs, so that they are productive and attract 
people here? So I think that is the first part of it.
    I think there is a consensus that there be some ecological 
spending. Again, there was an editorial this morning, I 
believe, in the Pensacola News Journal that said most, if not 
all, of the money should be spent on ecological programs, that 
enough has been spent on the economics. I think that is a 
debate that will be had, and depending on where you fall on 
these environmental issues, there are some that are going to 
argue for more money for preservation-type and conservation-
type projects. But I think there is a consensus that at least 
some significant portion should be on ecological concerns and 
things of that nature.
    The other is research, research about things like how to be 
prepared and prevent future spills, but also research on things 
like fisheries. One of the things we kept hearing about from 
the fishermen is how poor the data is, and yet some devastating 
decisions on catch limits are made based on this poor data. And 
I know Senator Nelson, for example, has worked very hard on 
securing funding as part of this for better data, so that if 
someone is going to come in and say, you cannot catch any more 
after X-date, it is not just because some guy decides some 
computer model told him this, but, in fact, it is based on some 
real research that is based on some real facts and that you are 
not destroying people's livelihoods based on an educated guess, 
but rather on data that actually has some substance.
    And then the last part that we have heard is some economic 
investments, obviously things like promotion, promotional-type 
things, because so much of the problem that we are facing in 
the region is directly related to perception, whether it is 
perception about the safety of the seafood or maybe ongoing 
perception about the quality of the beach and the water. There 
is a perception issue out there that needs to be overcome.
    The sad truth is that last year, a lot of people canceled 
their vacations, a fishing trip or a stay on the beach, and 
went somewhere else, and maybe they really liked it and they 
went back again this year. In essence, they have started 
establishing a new tradition. If I am wrong, you are going to 
correct me, but just knowing human behavior, you go to the 
same--you make a family tradition of going to northwest Florida 
year after year for the summer, but one year, you cannot go. 
You have to go somewhere else and you end up liking it and all 
of a sudden you have got a new family tradition going, and so 
we have got to reverse that. And one of the ways you reverse 
that is through promotion of the region.
    And then, obviously, the possibility of some 
diversification. Maybe this is an opportunity to provide some 
stability moving forward by finding some new economic 
activities and from this bad thing something good can come, in 
essence, the birth of a new industry.
    That is my sense of kind of the testimony I have gotten 
today. I am not sure I touched all the bases or got them all 
right, but it sounds to me like the two things that we are 
focused on are, one, the BP claims process that is ongoing and 
how we can get that closed out, which is basically what 
everybody wants. Let us get this closed out. And number two is 
moving forward, what to do with this money if and when it 
comes, gearing it toward these kinds of projects, ecological 
restoration, research on prevention, and other things like the 
fish catch limits, et cetera, and, of course, investments in 
our future.
    Is there anything the panel would like to add to that in 
terms of how I have summarized it? I may have missed something 
or maybe misstated it.
    Mr. Zales. You are very perceptive. I think you hit the 
nail on the head with all of it. In the fishery research part 
of it, I would encourage a substantial amount to go toward fish 
research for the Gulf. Dr. Steve Murawski used to be with the 
National Marine Fisheries Service. In a meeting with him about 
two months ago about some research they were doing, he made the 
statement that if red snapper was in the Bearing Sea, we would 
not have a problem with red snapper because of all the money 
prior to the time you got to the Senate that used to come to 
the State of Alaska and the northwest Pacific. They do yearly 
stock assessments on their fish. They have an abundance of data 
that is there. And so their fish are--the data on them is 
relatively good and they do not have the problems that we have 
here.
    And so it is like I said in my statement. Generally, stock 
assessments here happen every five to seven years in the Gulf. 
Forty percent of the recreational fishery in the United States 
is in the State of Florida. That is substantial. And so we do 
not get near the funding out of Washington for that type of 
activity that we deserve because of the effort that is put 
here. And so anything that can be done along that line would be 
very well liked.
    Mr. Gilchrist. Senator, the only thing I would say is that 
it appears clear to me that there have been plenty of tools 
available to government entities to work with and solve these 
problems and plan ahead. The ineptitude of governmental 
entities cannot be understated, in my opinion.
    [Laughter.]
    Senator Rubio. You will find no disagreement.
    Do you want to add something, Collier?
    Mr. Merrill. Only, Senator, on the first two, ecological 
and research, that is certainly a component. You did mention 
research on how to prevent that. Hopefully, we will not use our 
fine money doing that. I mean, the people that are drilling 
should be working on that themselves, and they should----
    Senator Rubio. I apologize. What I meant by prevention is 
preventing the bad response that existed. I heard--I think you 
commented on, and I thought it was a good analogy, you have 
been paying for fire trucks all these years, but what I meant 
to state was if we never want to see this kind of late response 
again, in essence, if this were to ever happen, God forbid, in 
the future, we want to make sure that we have in place the 
technologies and the mechanisms to prevent the spill from 
getting out of control the way this one did, some way to 
address it.
    Mr. Merrill. Yes, sir, and I think the oil companies need 
to pitch in to some fund. As I was referring to, I pay taxes to 
buy fire trucks, and they are ready there if we need them. The 
oil companies need to pitch in, I do not know how, whatever, to 
come up with some kind of emergency vessel, whatever it is. A 
couple billion dollars, you can come up with something to 
surround this oil spill until they--then they can spend 82 days 
drilling a well like they did this last time, but at least two 
million gallons are not coming up on our beaches at that point. 
So I appreciate that clarification.
    And ecological, I will not touch on, but the economic 
investments, yes, we do need to diversify and that is what we 
are talking about, what we are going to do with the $10 million 
a year for three years, and as the fine money comes up here, as 
well, we can put it through that same pattern of qualifications 
and preventing and fighting and trust you to get as much of it 
down here as you can.
    Mr. Broxson. Senator, I think your big battle is time. The 
longer it goes before you have a resolution in Washington, your 
battle is going to be dealing with the memory of the oil spill. 
If something does not happen this year, your battle will be 
greater next year because this money will filter away. BP spent 
over $200 million telling the nation that we had recovered and 
we were back to normal, and this would be the battle you will 
have with your colleagues, to convince them that we deserve to 
have money come back here when the economy has completely, in 
the minds of the public, been put back the way it was prior to 
the oil spill.
    Senator Rubio. Well, just as an update on that, let me 
state that I am pleased by the unity and progress that has been 
made by numerous members that have been working on this. 
Senator Landrieu has taken the lead, along with Senator Vitter, 
Senator Shelby, Senator Nelson, myself. All the gulf State 
Senators, for the most part, have been working well together. 
Now it becomes the bigger battle, and that is going to the rest 
of our colleagues and encouraging them to be a part of this 
process. In an ideal world, this bill would be written the way 
the Gulf state Senators want it and spent that way. My sense is 
that it will probably develop differently. Nothing in 
Washington moves very quickly, certainly not in the Senate, 
which takes great pride in taking a long time to do everything. 
But I am just learning it as I go.
    I think there is real unity behind the Senators in the 
region. I think outside of it, it has yet to be seen how it all 
plays out, including the positions I have outlined. There are 
some who are going to argue that this money should go to the 
General Treasury of the United States, that it should not be 
assigned and directed in this way, and others that argue 
differently, and then yet others that see this as a big pot of 
money that maybe they can dip their beak a little bit in and 
get some for themselves and their States. So we will figure out 
how this all plays out. It should be interesting.
    I wanted to--unless there were any other comments from the 
panel, I wanted to--I know we have a--what are we going to do 
with the roving microphone? So we have about 40 minutes, and 
what I would like to do is take any public input that may be 
out there. I know we have a lot of folks that are attending and 
have some thoughts. I would encourage you, if you have a 
question, there is a question. If you have a statement, make 
your statement. If you have both, that is fine, as well. Be 
considerate of the other folks who are waiting who may have 
something that they want to add, as well, in the next 40 
minutes. And, obviously, thank you for being a part of this.
    Who wants to go first?
    Mr. Dixon. My name is John Dixon [phonetic], Port St. Joe, 
Florida. I would like to thank Senator Rubio and everyone for 
organizing this. It does seem like this bill has sort of fallen 
out of the national limelight and I appreciate your helping to 
bring the light back on it.
    The way I read this and the way I see it, Thursday, last 
week, July 7, BP basically declared war, in a sense, on Florida 
tourism. The comments that they provided to the Gulf Coast 
Claims Facility (GCCF) attempts to use the Oil Pollution Act 
(OPA) '90 as that geography and causation is reason not to pay 
those claims. The original saying BP had was ``BP will pay all 
legitimate claims.'' They have now changed that as of last 
Thursday and it says, ``BP remains committed to paying all 
legitimate claims under OPA.''
    So we have a corporation--the Alaska pipeline, the Texas 
City oil refinery explosions, the Gulf of Mexico--had a 
corporate culture that seemed to put profits above human life, 
safety, and the environment, and we thought maybe what happened 
in the Gulf was a moment for them to turn their corporate 
culture around. They met with the President and put money into 
the fund and it seemed like, okay, they understand now. They 
get it. People, safety, and environment should be before 
profits.
    Last Thursday, it looks like that progress was lost and 
they are now back to profits before people, safety, and the 
environment. OPA '90 is Federal legislation that in no way 
should be used to not allow Florida tourist business to recover 
from the claims. So I would hope, I guess--my prayer is that, 
Senator Rubio, you could go back and perhaps whatever loophole 
BP is trying to use in OPA '90 to not pay Florida tourists is 
closed, very clearly.
    Senator Rubio. We talked about that briefly yesterday, and 
that is a new development as of last Thursday, I believe, 
right? So we are going to--that is now part of the committee's 
record and we will delve into that issue as soon as we return 
to Washington tonight.
    Male speaker. Thank you for coming to our great town of 
Pensacola. I was up and visited your office last week and got 
to meet with Miss Sarah and we had some issues about what we 
are still uncovering in the Gulf of Mexico, and this is one of 
my largest concerns.
    As of today, as a commercial fisherman--I have been a 
lifelong commercial fisherman, ever since I was 16 years old--
they have not cut our quotas and we are catching fish. But it 
is like coming into your home and somebody has been there. 
Things are out of place. Things are not normal. We are seeing 
some disturbing things that we see as a lifelong commercial 
fisherman.
    I was brought up on the beach. I played in these waters as 
a six-year-old kid. My mom used to light the lighthouse at 
Pensacola Beach before the Navy Yard told them they had to 
leave and move to another place.
    So my biggest concern is BP packing up and leaving before 
we can prove our losses. As Mr. Zales asked for stock 
assessments and money, what if our fishery collapse in two 
years, as it did in Alaska? Where am I left then if BP goes, 
``Okay, I am going to pay everybody off what you have lost 
today,'' and I am not saying BP owes me a bunch of money or 
anything at this time. Dr. James Cowan just last week did a 
study saying he found lots and lots of dead natural breeds, and 
these things are emerging daily.
    It is just hard for me to watch BP get on the horse and 
take off before we realize the consequences of the spill in the 
long term. Yes, my catch register does not ring every day like 
some people it does on the beach, and thank you for coming to 
our great home town.
    Senator Rubio. Just to restate here, because I think it is 
actually a very valid point and I think we heard it earlier in 
the testimony--I think Mr. Gilchrist talked about this, as 
well--is we do not yet--I think the argument is, while we are 
glad the oil is not spewing and we are glad that you do not see 
it on the surface and we are glad that people are coming back 
and fishing is going on and this, that, and the other, we are 
concerned that there is a bunch of oil that is still 
unaccounted for, and more importantly, we are concerned that 
the impacts of the spill is not something that may be fully 
felt for years to come.
    And what you are saying is, what happens if two or three 
years down the road, all of a sudden, we wake up and realize, 
my goodness, we are dealing with this new permeation of 
something that happened two or three years ago. There are 
plenty of precedents, by the way, out there for this happening. 
There are plenty of precedents for delayed impacts after a 
catastrophe or a cataclysmic event.
    What happens if this impact is felt two or three years from 
now, but to everyone's mind, it is ancient history and there is 
no money on the table to pay for it, and I think that is an 
issue that is going to have to be discussed within the context 
of the fine bill, because I think you have made a very valid 
point, and that is the full impact of the spill, particularly 
on those that depend on these waters, may not be known or felt 
for years to come. That is a very valid point.
    Ms. Esser. My name is Ruth Dupont Esser [phonetic]. I want 
to thank you, first of all, for being here today.
    Senator Rubio. Thank you for coming.
    Ms. Esser. This is clearly an environmental issue. I would 
like to ask if you would pay attention to EPA and its role in 
its contract with UNEP, United Nations Environmental Program, 
and please assure us that you will be watchful that the funds 
from BP do not go to EPA in order to commit to an agenda by 
UNEP, which is communistic in structure, so it is as anti-
American as it gets. We need these funds to come to our free-
market system, to the people that suffered from the 
consequences of this event, and we really need to be protected 
so that they do not go to an entity that does not intend to 
assist the American way of life.
    I believe that we do need environmental clean-up. I do not 
by any means think that we do not. We clearly do. But we need 
to have the funds in the hands of the free-market system and in 
the hands of environmentalists who are not working in 
conjunction with the United Nations. Thank you.
    Senator Rubio. Thank you. And I have gotten several e-mails 
about this topic, and let me just say that I think the 
intention of everyone, I hope--there might be a debate about 
this in Washington, too, but the purpose of the fine bill is 
not to advance any ideological view, but rather to deal with 
the fact that a bunch of people have been hurt really bad by 
the negligence of an individual company. And the law says that 
when you do something like this, you pay a fine for it, and the 
argument now is how should that money be spent, and the money 
should not be spent, in my opinion, to do anything. I am not 
even talking specifically about what you outlined, but in 
general, should not be used to make a point behind any 
ideological philosophy. The point of this money, my hope is, 
will be to address the damage that was caused by the specific 
incident, and that is the direction I hope we will head.
    Mr. Villmer. My name is Matthew Villmer. I am an attorney 
over at Emmanuel Sheppard and Condon out of Pensacola. We 
represent about 60 different individuals and businesses in 
their claims with the Gulf Coast Claims Facility.
    I just want to echo what the panel said today, that the 
biggest problem with the Gulf Coast Claims Facility is 
disparate treatment. So that would mean that different 
claimants with the exact same claims are treated differently. 
And I just wanted to figure out if your office can provide any 
assistance with shaping Feinberg's opinion or helping with 
individual claims that are treated differently underneath the 
Gulf Coast Claims Facility's rubric for compensation.
    And as a perfect example, our firm represents five 
individuals who all worked for the exact same business and have 
the exact same position. Last year, we filed a claim on behalf 
of all five that were identical, from top to bottom, 200-page 
claim packets that were identical. Two were paid, three were 
not paid. We then turned around and filed this year interim and 
final claims that were, again, identical from top to bottom. 
Two were paid, three were not paid and finally denied. The 
GCCF's position is that the two that were paid were properly 
paid and the three that were not paid were properly denied, 
which makes absolutely no sense.
    So if there is anything that your office can do to assist 
with individual claims in the GCCF claims process, I would like 
to know that.
    Senator Rubio. And other than what we do already, which is 
try to assist claimants who call us, but I think the process 
that you are outlining is--I think what we are learning, and 
increasingly being confirmed to us, is that the problem here is 
we have a flawed process, a process that has no uniformity. So 
two different people are viewing, for example, five claimants, 
as you have outlined--this is my guess, but it sounds like I am 
going to be right--five different people work in the same place 
and the exact same thing happened to them. But these five 
claims are reviewed by two separate people. Two claims are 
reviewed by one guy or gal and three claims are reviewed by 
somebody else, and the three get denied because that person has 
got a certain mindset and the other two get approved because 
the other person has a certain mindset, and that is the 
problem. It is a procedural problem that I think lingers.
    So I think part of--one of the things that has come from 
this hearing is, whether it is the Clean Water Act fine bill or 
some other mechanism, I think we are going to have to figure 
out a way to close this process out. It cannot continue in this 
process where you have a bunch of people out there who feel 
like their claims have been denied and would like to appeal 
that decision. You have others that are waiting in a backlog. I 
think the process of closing out the claims is going to have to 
be a part of any discussion moving forward, and what I can 
commit to doing is making sure that that happens.
    Yes, Collier, I am sorry.
    Mr. Merrill. I know there are--I see that I recognize, 
representatives in the audience from BP, so maybe they are 
taking the right notes and will do something, but do not hold 
your breath.
    And I say that--you know, in February, the procedure, you 
know, we were complaining. There was a group there meeting with 
Mr. Feinberg and complaining and he said, ``Well, I am hiring a 
group of law firms and each State is going to have some people 
representing that you can talk to,'' because I said, we cannot 
talk to anybody. You do not know where your claims are. And I 
was trying to help some people. Fortunately, we are able to 
survive, but I have got employees and other small groups that 
were having trouble getting anywhere, and they said, well, 
these people, you can talk to. And that is when they told us, 
well, refile. It is going to be 90 days.
    And so that came and went. I actually talked to this group 
here that is representing Florida on Thursday and I said, it 
has been 142 days. You said 90. What can you tell me? And they 
said, ``Well, all I can tell you is your claim is under 
review.'' So, I mean, it is the same thing that I would get 
from anybody else. I guess they do not have any authority, 
either. I do not know where we go from there, but it is--this 
frustration is what I hear every day when I walk around, just 
that you do not have any response. I was hoping that this 
latest development in February was going to work that, but it 
just has not. So I just wanted to echo that, as well.
    Senator Rubio. Janice.
    Ms. Gilley. Yes, Janice Gilley, University of West Florida. 
I think everybody else has said we are so glad that you came to 
Pensacola and would have this official hearing here.
    I wanted to speak a little bit more about the way the funds 
might come back to the states. I definitely agree with the 
environmental research and continuing to monitor the impact. 
Obviously, economic diversification for the region. But I would 
hope that we would also consider endowing some of those funds, 
because once they are spent, they are gone forever. Obviously, 
as everyone else has said, God forbid we ever have this type of 
situation ever happen again. But I think that we do need to be 
good stewards of those funds if--if--and when they are made 
available to our region and they are endowed so that we can 
continue for the decades, monitor these situations and have 
resources or have an opportunity for resources to continue the 
research and the diversification.
    Because my fear is that the funds may come, and, like you 
said, from a policy perspective, they are divided up 
nationally. If they are maybe somehow endowed, then you could 
only qualify for those funds if you are in the region, and it 
could potentially be in perpetuity. So that would be one of my 
concerns about the funds and maybe how they could be managed. I 
know that is a pipe dream, maybe, from D.C., but----
    Senator Rubio. No, no, it is not. It is a good suggestion. 
Have you worked in government before, Janice, or----
    [Laughter.]
    Mr. Diep. Good morning, Senator.
    Senator Rubio. Good morning.
    Mr. Diep. My name is Lan Diep. I am an Equal Justice Works 
AmeriCorps Legal Fellow working at the Mississippi Center for 
Justice. We are part of a five-state consortium from Texas to 
Florida that provides free legal assistance for folks who want 
legal advice dealing with the oil spill and dealing with the 
GCCF.
    In following the panel's discussion this morning about the 
GCCF, many of the issues raised, I feel, are important, but 
really have only scratched the surface. Our consortium has 
handled or in the process of handling about 3,000 or so claims. 
I, myself, have handled about 50 or so claims.
    And I think in terms of small businesses--the list goes on 
and on, but in terms of small businesses, specific points of 
contention with the Claims Facility right now are their loss of 
income calculations. Small business claims get discounted by 
what Feinberg calls a loss of income percentage, and what that 
percentage says is basically because you are not selling as 
much, you do not have to buy as much inventory, so you are 
actually saving money. So your claim is discounted. And that 
percentage, as far as I can tell, is somewhat arbitrary.
    People can provide specific numbers on their taxes, but 
then industry numbers are used. Very broad strokes are used. 
People are not really getting the full amount----
    Senator Rubio. I am sorry to interrupt. I want to clarify 
that in my mind. So the way it reads is, so I own a store that 
sells whatever and since I do not have as many customers, I do 
not have to have as much inventory. Therefore, I do not need as 
much money. That is the----
    Mr. Diep. Right. So that is kind of their thinking. So they 
discount all your claims by--it is an arbitrary number, and the 
number is hard to calculate. That is one thing.
    Two, the GCCF distinguishes you as a business or a small 
business from an individual claim by looking at your taxes and 
seeing whether you have a Schedule C. But recently, what we 
have encountered is that if on the Schedule C, which qualifies 
you as a business and guarantees you a $25,000 minimum payout--
--
    Senator Rubio. Right.
    Mr. Diep [continuing]. They are going back and they are 
looking. If you did not file individualized expenses, itemized 
expenses, they are going back and they are moving a lot of 
these folks back into individual as claimants. So if you did 
not file--if you just filed a Schedule C Easy, they might put 
you back as an individual claim. And so there are these sole 
proprietors and individuals, or deckhands, fishermen, who are 
getting put back in the wrong bucket.
    Senator Rubio. But are not--they are in, like, contract 
labor type situations, folks are--is that what you are--or is 
it----
    Mr. Diep. Right, like small business owners, cleaners----
    Senator Rubio. Right.
    Mr. Diep [continuing] Or sole proprietorships. They have a 
Schedule C which qualifies them as a business----
    Senator Rubio. Right.
    Mr. Diep [continuing] But because they did not file under 
taxes itemized expenses, the GCCF is right now going back and 
considering----
    Senator Rubio. Reclassifying them as individuals?
    Mr. Diep. Reclassifying them----
    Senator Rubio. Right.
    Mr. Diep [continuing]. And kind of denying them their 
$25,000 minimum.
    Senator Rubio. Even though they are not anyone's employee, 
per se, they are basically----
    Mr. Diep. Right. Right. Yes. There are problems with start-
up businesses, businesses that started right before the oil 
spill, January 2010, that do not have the 2008, 2009 documents 
to fit in their formula are having trouble navigating the 
process. So there is no real system to deal with those 
individuals.
    One problem that is of particular concern to me that might 
the cause of a lot of the delays that people are facing is that 
Feinberg, because he is overly cautious of fraud, is using some 
of the money, or I am not sure which of the $20 billion, but he 
is hiring private investigators to investigate claims of fraud, 
and I am not entirely sure that that is his place. He might 
refer those that they are suspicious about to the FBI or 
whoever. But I am not sure it is the GCCF's place to be 
investigating claims of fraud. Furthermore, he is not providing 
notice to the individuals being investigated, which might have 
some, you know, Fourth Amendment type concerns.
    Senator Rubio. Right.
    Mr. Diep. Finally--or not finally--the 90 days everyone 
keeps talking about, the 90 days comes from OPA. You have 90 
days to review. But from Feinberg's perspective, it is 90 days 
from when the claim is substantiated, which means you can turn 
in all your documents, but the 90 days does not start counting 
until they feel that they have everything that they need to sit 
down and review your claim. So you do not know when to start 
counting the 90 days. The standard review that they are using 
is a lot higher than you might even find in a court of law.
    And finally, just as to the point in your opening comments, 
you said that the GCCF has about 190,000-something unique 
claims. The number is, as of July 8, 520,386 unique claims, but 
only 196,644 have been paid. But what is of concern is that of 
that amount that has been paid, 118,314 are quick pays, which 
means they are the kind that just say, ``Fine, I give up. I 
want to take the money and just move on with my life.'' So I 
feel that because of the time delay, a lot of individuals are 
waiving their rights against BP and the other defendants----
    Senator Rubio. Because they need the money.
    Mr. Diep [continuing]. Because they need the money. So, 
thank you.
    Senator Rubio. The gentlemen standing next to you there is 
Captain Tande, who runs our office here. It sounds like you--I 
do not know if you wrote all that down during the hearing or if 
you have--but I would love to get something like that, not just 
for the record of the committee, but for our office if, indeed, 
we get involved in--as I expect we will--in some sort of 
reforms to the claims process, be they wholesale or partial. I 
would like to be able to point to some of the real world--I 
mean, it sounds like you have a wealth of knowledge, so if you 
could somehow communicate with us to get us a memo or something 
that outlines these points, that would be very helpful.
    Mr. Tande. He has my card.
    Senator Rubio. Oh, he does. Okay. Good.
    Mr. Kugelmann. Good morning, Senator. My name is Robert 
Kugelmann [phonetic]. I was an oil spill volunteer for Escambia 
County and also for the National Park Service.
    I wanted to encourage you in Washington to take what steps 
you can to review through oversight the effectiveness of our 
natural energy regulatory mechanisms. I think that public 
citizens have not been able to maintain confidence, not only 
based on the Gulf Coast oil spill, but also what has happened 
in West Virginia in the coal mining industry and the fact that 
it turned out here in the Gulf Coast that many of the plans 
that were submitted as part of the permitting process, many of 
the emergency plans were really not serious efforts. They 
talked about wildlife that was common in Alaska, but 
nonexistent in the Gulf.
    So we do want to encourage you and your colleagues up there 
to take a strong look to enforce accountability, and not only 
among public corporations that seem to need a heavy hand to 
comply with the spirit and letter of the law, but also with the 
Federal career service that is paid to review and to exercise 
oversight in these critical areas.
    So thank you all for being here today.
    Senator Rubio. Thank you.
    Ms. Dubis. Hello and thank you again for coming to 
Pensacola to see firsthand how we feel about what is going on. 
We appreciate it, Senator.
    Senator Rubio. Thank you.
    Ms. Dukes. My name is Dottie Dubis [phonetic]. I am a local 
resident and I do not own a small business, but since that is 
the focus for which this hearing was called, I want to call to 
your attention that there are a lot of small businesses that do 
not really fit into the tourism, fishery categories that you 
have spoken of but who were gravely impacted, and, in fact, 
many of whom have closed their doors and moved out.
    In the particular building with which I am associated, we 
had a manufacturing organization that manufactured windows and 
doors and aluminum items which survived between hurricane 
seasons by doing refurbishing for beach houses. Unfortunately, 
with the impact of the Horizon, no one wanted to redo their 
beach house because they could not even conceive that they 
might be renting them out for several months. And so this 
business has folded. The five positions that were there are 
gone. And if you look at the population base of Pensacola, it 
has depreciated since the Horizon impact.
    I was wondering if you might be able to somehow capture the 
funds that you do eventually end up with and assign them in a 
sort of a HUBZone, if you will, but maybe a Horizon Zone for 
the eight areas of Florida that were directly impacted, that 
that would be where a business would have to come and bring 
itself in order to benefit from it, rather than saying, we will 
spread it out and let it go elsewhere. If there is a company 
that is successful in Arkansas or Missouri or whatever that 
sees that they have an opportunity to do something that would 
impact positively, come and do it here. If you could somehow 
create an incentive program similar to the HUB and Empowerment 
Zones, but have it be a Horizon Zone, it might help.
    Senator Rubio. And it is a concept that we had discussed 
during the campaign. It was part of one of my ideas that we 
outlined. You have touched on one of the difficulties of this 
issue, and that is that you are absolutely right. There are 
the--and we are not discounting, because that is where the 
first wave of pain was inflicted, the hotels, the tourism 
industry, the fisheries, and all those sorts of things. But 
then from that, there is a spin-off effect. I mean, the bottom 
line is if one of your fishermen is making half as much money 
as they made a year ago, they have a lot less money to spend in 
the local economy, which ultimately impacts everybody. The 
trickle effect of it is very real.
    The challenges politically, as you can imagine, in creating 
that chain and justifying it become harder, but I think what 
you have touched upon is some sort of a regional incentive 
program that will hopefully attract, the way that the oil spill 
may have detracted people from coming here, maybe reverse 
course on that. I do not--I think that that is something worth 
having a conversation, maybe outside the framework of the fine 
bill, but one that should be discussed.
    Ms. Kraft. Good morning. My name is Bethany Kraft 
[phonetic]. I am the Director of the Alabama Coastal Foundation 
and I am here today on behalf of our Florida members. We share 
an incredible resource in the Perdido area and I thank you all 
for taking the time today to solicit input from your citizens.
    Just a couple of really quick comments specifically related 
to the Clean Water Act fine money. First, regarding your 
anticipation, Senator, of other members of Congress seeing the 
bright shiny object of fine money and trying to get a piece of 
that for their own constituents, I would really like to 
encourage you and your fellow Senators as you work on 
legislation and a bill reaching out on a regular basis to the 
nonprofit community who have extensive networks across the 
country and help us help you encourage citizens across the 
United States to continue to understand how important the gulf 
is to their life and how important it is for that money to come 
here for restoration.
    In the wake of the oil spill, just my organization and two 
others in Alabama alone received over 10,000 calls from 
citizens across the country looking to make a connection to the 
Gulf of Mexico. We still communicate on a weekly basis with 
those 10,000 citizens, letting them know what is happening here 
and why their input is still so important. So I encourage you 
to keep us involved in the process and let us help put pressure 
on those elected officials who might see dollar signs in their 
eyes. Their citizens know how important the Gulf of Mexico is 
to their own livelihoods and are committed to restoration money 
coming here to the Gulf of Mexico.
    Senator Rubio. Well, again, your statement actually is a 
great example of why these hearings are so important. That is 
actually a great strategy. The truth is that my sense is that 
many of my colleagues who are committed to conservation and the 
environment probably have conservation and environmental 
projects in their home state and they see this as an 
opportunity to take some money for that. And it would be 
great--I am not sure if I am being naive, but it would be great 
if the conservation and environmental community outside of 
government would tell them, thank you, we appreciate you doing 
that, but if this ever happens to us, we would like all that 
money to come to us, and since this is happening to them, we as 
a community have taken the position that this money should go 
to the Gulf region.
    I do not know if that is unrealistic. I do not know how 
hard it is for people to walk away from that. But that would be 
great, if that is the kind of national message that we could 
get out to our friends in the Senate and in the House.
    Ms. Kraft. Well, we are absolutely ready and willing to 
help you with that.
    Secondly, just really quickly, I was happy to hear the idea 
of the Clean Water Act fine money, the projects driving the 
money and not looking at it from a specific geographical 
boundary perspective. I think that the Gulf ecosystem as a 
whole deserves better and we have a responsibility to take 
advantage of what could amount to a huge opportunity for us to 
bring the Gulf of Mexico back to a place that will sustain not 
only us, but our children and our grandchildren.
    Toward that end, I would love to see the final Clean Water 
Act bill contain some basic guidelines that will help ensure 
that the projects are, first and foremost, in the minds of our 
politicians and our citizens and all of our community leaders, 
guidelines that look at the root causes of what has caused the 
Gulf of Mexico problems in the past five or six decades.
    When you are talking about habitat loss, when you are 
talking about why your fisheries have declined, which lead to 
restrictive regulations which make it more difficult to 
increase your catch limits, these are the things that we need 
to be looking at and putting that into the legislation, saying 
we want to address the root causes of degradation in the Gulf 
of Mexico. We do not just want to put band-aids. We want to see 
projects that build on each other. We do not want to see 
discrete little things that end up amounting to a non-scalable 
change.
    We have guidelines that we are putting forth in the 
environmental community, and I think that you could easily make 
the argument to do that on the economic side, as well. But 
coming up with some broad priorities at the Federal level 
within the bill will help ensure that that money does not just 
disappear into small projects that do not bring us forward as a 
community. Thank you.
    Senator Rubio. Thank you.
    We are getting close to wrapping up. We have probably time 
for one or two more statements or questions, if there is anyone 
left. These lights make it hard to see out into the audience.
    Mr. Atardo. Good morning, Senator.
    Senator Rubio. Good morning.
    Mr. Attardo. I am Lew Attardo and I was formerly the 
Director of the Office of Small Business Advocate in the 
Florida Small Business Regulatory Advisory Council during the 
time of the oil spill. As some of you know, we worked with our 
local legislative delegation from northwest Florida on a 
strategy for trying to revitalize the regional economy as a 
result of this spill, particularly on what we could do for 
small and medium-size enterprises that would be adversely 
affected.
    One of the things that we did was immediately after the 
spill is we went on-site to locations along the beaches within 
two weeks after the Deepwater Horizon disaster occurred and we 
listened to businesses. And as you have heard today, it was not 
just fishermen and the bait shops and the property owners that 
had rentals, but also everything from janitorial companies that 
had contracts for cleaning condos between residents to 
manufacturing companies who saw a dip in their business and in 
some cases actually folded up because of the loss of business.
    What is most important, I think, is the fact that as an 
organization, through the Office of Small Business Advocate, we 
submitted a report to the legislature in Florida and to both 
Governor Crist at the time and then Governor Scott when he came 
into office on a strategy that we presented to the EDA team 
that was here with the International Economic Development 
Council that did the surveys post-disaster about what needed to 
be done to transform and recover.
    One of the things that we recommended was there needed to 
be a long-term strategy, a five-year and a ten-year plan, on 
how to diversify the region's economy, how to support small and 
medium-size enterprise development, and what would be necessary 
for that recovery to take place. Those plans included several 
strategies for business retention and expansion, including some 
innovative ideas on things like subsidizing the fishing 
industry to purchase fish as we do with other food supplies to 
put into the public school system, to introduce in the public 
schools fish, as an example, as being properly prepared and 
properly handled, and that would, first, support the local 
businesses immediately, is by putting fish in schools, and 
secondly, help to provide a new generation of potential seafood 
and fish eaters that might not get it in their homes otherwise.
    But beyond that, bigger programs like small business loans 
that would be necessary to help with recovery, because we knew 
a year ago that the BP funding was not going to be immediate. 
It would take time. There is a report on that, and I will be 
glad to leave a copy with your staff, on what was recommended 
at the time on various strategies for economic recovery and 
diversification, what would be necessary to boost and 
revitalize the area's economy, and as I think others have 
voiced today, is to make sure that those funds that were 
committed to supporting this region along the Gulf Coast, 
Florida and the other affected states, stays in this region 
through some kind of a program that would endow the funds 
through foundation or some kind of a regional Gulf Coast 
Economic Development Program that would help support the 
region's needs over the next five to ten years while we try to 
figure out how we recover and how we rebuild the economy after 
that disaster.
    So thank you very much for coming today.
    Senator Rubio. Thank you.
    We have time for one more.
    Mr. Ellington. Thank you, Senator and distinguished guests. 
My name is Ron Ellington. I am with Innisfree Hotels. We have 
six hotels, three on Pensacola Beach, three on Orange Beach, 
Alabama. We have just filed our final claim with the GCCF for 
those six hotels.
    One of the things that we addressed in there that 
everybody, I am sure, has already spoken to, and I apologize, I 
was a little late, so if I am asking a question you have 
already addressed, but it is the volume of oil that is still in 
the gulf that we are still fearful that we will see again with 
any kind of storm that brings it back up on our beaches. And 
one of the things we are having to address in this claim, 
obviously, is how do we deal with that potential liability and 
the fear of that reoccurrence and the cost that that brings 
again.
    In your bill, or in the bills pending, is there anything in 
there that would address finding that oil and remediating it?
    Senator Rubio. First of all, the bill has not been fully 
vetted yet. It has not even been introduced publicly yet, so we 
will know more about that in the next few days.
    In the conversations that I have had--and that does not 
mean it is not in there, I could be wrong--but in the 
conversations that I have had, I have not heard discussion 
about that issue. I think it is an issue that I have heard here 
today, I will not say for the first time, but certainly in the 
most persuasive way possible has been this persistent concern 
that the full impacts of the oil spill may not be known until 
sometime in the future when either some other event or by 
natural process we begin to see some secondary effects that are 
dramatic and have real repercussions, and the fear is at that 
point--let us say it happens four years from now where we--let 
us say two or three years from now, your fishermen are coming 
back and reporting some really bizarre things, or worse, we 
have a storm and all this oil reemerges and washes up on the 
beaches and have these massive kills. What process will be in 
place to address it three or four years down the road--two or 
three years down the road?
    I think the very persuasive argument has been made with 
regards to that. How we address it is something we are going to 
continue to look for your input. I have not heard it discussed 
to the level that it has been discussed here today. That does 
not mean it is not being discussed at that level. That does not 
mean that some other Senators do not have it on their mind. But 
that is why we do these things, because in the midst of all 
these issues that are flying around, to really identify some of 
these things that would not otherwise emerge, maybe even in a 
hearing in Washington, is so critical. It is certainly 
something I am going back with as part of our message.
    Well, I want to thank all of you for joining me here today. 
A couple of things I want to tell you is that if you were 
unable to--let us say you have something you wish was on the 
record for the committee and it occurred to you afterwards or 
just did not have the time today, or we did not have the time 
to get to you, you can submit that in writing to be part of the 
record of this hearing. That record is going to remain open for 
the next two weeks. So for the next two weeks, if you have 
something that you want to see made part of the record here 
today, you can submit that either through my office or through 
the Committee on Small Business and Entrepreneurship.
    I want to thank all the members of the panel. We took a lot 
of your time and I am grateful to you for being a part of this 
and for your input. Hopefully, we will be able to come back to 
you in a few weeks or months with an update on the status of 
the fine bill and hopefully some progress on the claims 
process.
    With that, the hearing is adjourned.
    [Whereupon, at 11:23 a.m., the committee was adjourned.]
                      APPENDIX MATERIAL SUBMITTED

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