    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

      REGULATORY OVERREACH: IS EPA MEETING ITS SMALL BUSINESS OBLIGATIONS?

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

                                    HEARING

                                   before the

                          COMMITTEE ON SMALL BUSINESS

                                 UNITED STATES

                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  HEARING HELD

                                 JULY 30, 2014

                                   __________

     [GRAPHIC] [TIFF OMITTED]

                Small Business Committee Document Number 113-079

                  Available via the GPO Website: www.fdsys.gov

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                       HOUSE COMMITTEE ON SMALL BUSINESS

                         SAM GRAVES, Missouri, Chairman
                               STEVE CHABOT, Ohio
                                STEVE KING, Iowa
                             MIKE COFFMAN, Colorado
                          BLAINE LUETKEMEYER, Missouri
                         MICK MULVANEY, South Carolina
                             SCOTT TIPTON, Colorado
                       JAIME HERRERA BEUTLER, Washington
                            RICHARD HANNA, New York
                             TIM HUELSKAMP, Kansas
                           DAVID SCHWEIKERT, Arizona
                           KERRY BENTIVOLIO, Michigan
                            CHRIS COLLINS, New York
                            TOM RICE, South Carolina
                   NYDIA VELAAZQUEZ, New York, Ranking Member
                             KURT SCHRADER, Oregon
                            YVETTE CLARKE, New York
                              JUDY CHU, California
                            JANICE HAHN, California
                         DONALD PAYNE, JR., New Jersey
                              GRACE MENG, New York
                            BRAD SCHNEIDER, Illinois
                              RON BARBER, Arizona
                        ANN McLANE KUSTER, New Hampshire
                            PATRICK MURPHY, Florida

                          Lori Salley, Staff Director
                        Paul Sass Deputy Staff Director
                          Barry Pineles, Chief Counsel
                      Michael Day, Minority Staff Director

                                C O N T E N T S

                               OPENING STATEMENTS

                                                                       Page
    Hon. Sam Graves..................................................     1
    Hon. Nydia Velaazquez............................................     2

                                    WITNESS

    Hon. Bob Perciasepe, Deputy Administrator, Environmental
      Protection Agency, Washington, DC..............................     3

                                    APPENDIX

    Prepared Statement:
        Hon. Bob Perciasepe, Deputy Administrator, Environmental
          Protection Agency, Washington, DC..........................    30
    Questions and Answers for the Record:
        Questions and Answers from Hon. Sam Graves to Hon. Bob
          Perciasepe.................................................    35
        Questions and Answers from Hon. Mick Mulvaney, Hon. Tom Rice,
          and Hon. Scott Tipton to Hon. Bob Perciasepe...............    40
        Questions and Answers from Hon. Mick Mulvaney to Hon. Bob
          Perciasepe.................................................    41
        Questions and Answers from Hon. Scott Tipton to Hon. Bob
          Perciasepe.................................................    43
    Additional Material for the Record:
        Chamber of Commerce..........................................    46
        Joint Field Hearing on EPA Water Grab........................    49
        National Association of Realtors.............................   100
        RISE - Responsible Industry for a Sound Enviroment...........   120
        WAC - Waters Advocacy Coalition..............................   123

      REGULATORY OVERREACH: IS EPA MEETING ITS SMALL BUSINESS OBLIGATIONS?

                                  ----------

                            WEDNESDAY, JULY 30, 2014

                      House of Representatives,
                   Committee on Small Business,
                                                        Washington, DC.
        The Committee met, pursuant to call, at 1:00 p.m., in Room
    2360, Rayburn House Office Building. Hon. Sam Graves [chairman
    of the Committee] presiding.
        Present: Representatives Graves, Chabot, Leutkemeyer,
    Tipton, Hanna, Huelskamp, Schweikert, Collins, Velaazquez, and
    Payne.
        Chairman GRAVES. Good afternoon, everyone. We will bring
    the hearing to order. I want to thank everyone for being here.
        The mission of the EPA is to protect human health and the
    environment. Lately, the EPA has ventured well beyond its
    mission. Its recent rulemakings are an unprecedented power grab
    that are infringing on the rights of both the individual and
    small business owners. The results on our economy are
    potentially devastating and the EPA needs to reevaluate its
    decisions.
        These rules have real and direct consequences for small
    businesses, and the American public deserves to have a complete
    picture of the costs and benefits of all these rules.
    Unfortunately, EPA seems focused on telling one side of the
    story and ignoring the other.
        What the EPA is not revealing is how its rules will affect
    small businesses. The EPA is required to tell that story by the
    Regulatory Flexibility Act or RFA. The RFA requires EPA to go
    through the common-sense process of assessing how its rules
    will affect small entities and whether there are less
    burdensome ways to meet their objectives.
        Instead of complying with the law and getting input from
    small businesses through formal panels and analyzing small
    business impacts, the EPA has ducked these rulemaking
    requirements.
        Unfortunately, small businesses won't be able to duck the
    power plant regulations or ``Waters of the United States'' rule
    once they are finalized. They are being required to comply with
    the rules, pay the costs, and face the consequences.
        While all small businesses want clean air and clean water,
    they also want rules that are very clear and rational. Small
    businesses want to know what they will be required to do, what
    the costs are expected to be, and how their operations will be
    affected. And last but not least, small businesses want to be
    treated fairly in the rulemaking process.
        I hope this hearing is going to be a wakeup call for the
    EPA. Avoiding its obligations under the RFA is just simply not
    acceptable. For the past year, the Committee has been working
    to get the EPA to testify on this topic, and I very much want
    to thank Deputy Administrator Perciasepe for joining us today
    and I look forward to discussing this issue. And I, again, want
    to thank you for being here.
        And I yield to Ranking Member Velaazquez for her opening
    statement.
        Ms. VELAAZQUEZ. Thank you, Mr. Chairman.
        A clean environment and economic growth go hand in hand.
    Between 1970 and 2011, air pollution dropped 68 percent,
    private sector jobs increased by 88 percent, and GDP grew by
    more than 200 percent. This is not a coincidence as studies
    continually show that environment stewardship is not only good
    for our families, but also for our businesses.
        Today, the EPA plays a vital role protecting public health
    and safety by implementing a vast array of environment laws,
    which in turn support our economy. Through its implementation
    of the Clean Air Act, we have seen significant improvements in
    our nation's air quality. In a given year, enforcement of the
    Clean Air Act has saved 160,000 lives, prevented 1.7 million
    asthma attacks, and stopped 13,000 heart attacks. It is
    estimated that 13 million missed workdays are prevented thanks
    to the cleaner air we enjoy, boosting economic productivity.
        We have also seen similar benefits from the EPA's
    enforcement of water regulations. Since the enactment of the
    Clean Water Act, billions of pounds of pollution have been kept
    out of our waterways, doubling the number of safe areas for
    swimming and fishing. As a result, Americans are healthier, our
    waterways are being remediated, and industries like tourism,
    fishing, and recreation, which are dominated by small
    businesses, are seeing greater opportunities.
        While it is fair to say that these outcomes are positive
    and that EPA is justifiable in pursuing such goals, the agency
    must always be mindful of how new rules and regulations impact
    our nation's small firms. To this point, our committee has
    already examined several EPA regulations and the agency's
    obligations under the Regulatory Flexibility Act.
        What these hearings have shown is that the small business
    impact can vary from rule to rule. When it comes to electricity
    generation, it is clear that the direct costs are borne mainly
    by large utilities. However, with regard to the discharge of
    certain chemicals into the water, small businesses and farms
    are likely to bear more of the actual costs associated with the
    regulations. Yet, EPA determined neither rule will have enough
    of an economic impact on small firms to trigger RFA analysis.
        During today's hearing I hope to hear how the EPA is
    implementing its obligation under the Regulatory Flexibility
    Act, as well as conducting outreach to small firms. Perhaps
    most importantly, I want to know how it determines not to meet
    the full requirements of the act. There is no doubt that small
    businesses want to protect our environment and should in many
    regards be an ally of the EPA. Not only are they leading the
    way when it comes to environmental technologies, but they can
    also help the EPA craft regulations that promote clean air and
    water without overburdening the industry.
        It is my hope that today's hearing will help bridge the gap
    between the EPA and the small business community, resulting in
    a cleaner environment and a stronger economy.
        With that, I thank EPA Deputy Administrator, Bob
    Perciasepe, for his participation today, and I yield back the
    balance of my time. Thank you.
        Chairman GRAVES. Thank you.
        In 2009, the Honorable Bob Perciasepe was appointed by
    President Obama and confirmed by the Senate to serve as the
    Environmental Protection Agency's deputy administrator, and for
    nearly four decades he has worked on environmental issues from
    both within and outside the government. Mr. Perciasepe
    previously served as the head of EPA's water office and later
    its air office, and prior to becoming deputy administrator, he
    was the chief operating officer for the National Audubon
    Society. Mr. Perciasepe has also served as Secretary of
    Environment for the State of Maryland.
        Director Perciasepe, thank you for taking the time to be
    with us today, and your written statement is going to be
    entered into the record. So please give us your oral statement.

        STATEMENT OF HON. BOB PERCIASEPE, DEPUTY ADMINISTRATOR,
                    ENVIRONMENTAL PROTECTION AGENCY

        Mr. PERCIASEPE. Chairman Graves, thank you. Ranking Member
    Velaazquez, thank you for those comments. And thank you for the
    opportunity to testify and answer questions of the members.
        I am here today to talk about EPA's actions on the
    president's Climate Action Plan, and also under the EPA and
    U.S. Army Corps of Engineers' recently proposed rule that would
    clarify jurisdictional scope of the Clean Water Act.
        Climate change is one of the greatest challenges of our
    time, threatening human health, welfare, and our economic well-
    being, and if left unchecked, will have devastating impacts on
    the United States and businesses.
        That is why President Obama laid out a Climate Action Plan
    in June 2013, in which he directed EPA and other federal
    agencies to take steps to mitigate the current and future
    damage caused by carbon dioxide emissions and to prepare for
    the anticipated climate changes that have already begun to be
    set in motion.
        EPA plays a critical role in implementing the plan's main--
    one of its first pillars, which is cutting carbon pollution.
        The president asked EPA to work with states, utilities, and
    other key stakeholders to develop the plans to reduce carbon
    pollution from future and existing power plants, the largest
    source of carbon dioxide emissions in the United States.
        In June of this year, the EPA proposed a Clean Power Plan
    for existing plants. The plan is built on advice and
    information from states, cities, businesses, utilities, and
    thousands of people about the actions they are already taking
    to reduce carbon dioxide emissions, and it aims to cut energy
    waste and leverage cleaner energy sources by using a national
    framework to set achievable state-specific goals, and it
    empowers the states to chart their own customized path to meet
    those goals.
        The EPA's stakeholder outreach and public engagement in
    preparation for this rulemaking was unprecedented. Starting
    last summer, we have virtually met with thousands of people and
    had hundreds of meetings with a broad range of stakeholders,
    including small entity interests such as municipal and rural
    electric cooperatives.
        Now, we are in the second phase after the proposal of our
    public engagement, and it has already begun. We have already
    had dozens of calls and meetings with states and other
    stakeholders, and more formal public process includes a comment
    period that runs through October 16th of this year. Public
    hearings are being held this week in Atlanta, Denver,
    Pittsburgh, and in Washington, D.C.
        In addition to the president's action plan, I also want to
    take a minute to talk about the recently proposed
    jurisdictional rule under the Clean Water Act. In recent years,
    several Supreme Court decisions have raised complex questions
    regarding the geographic scope of the Clean Water Act. And for
    nearly a decade, members of Congress, states, local officials,
    industry, agriculture, environmental groups, and the public
    have asked our agencies--the Corps of Engineers and EPA--to
    make the existing rules on the book more consistent with the
    Supreme Court's rulings.
        For the past several years, EPA and the Corps have received
    input from the agricultural community while developing the
    proposed rule. Using this input, the EPA and the Corps has
    worked with USDA to ensure the concerns raised by farmers and
    agricultural industry were addressed in the proposed rule. The
    proposed rule does not change in any way the existing Clean
    Water exemptions associated with agriculture, ranching, and
    forestry activities.
        EPA also sought wide and early input from representatives
    of small entities, while formulating a proposed definition of
    this term that reflects the intent of Congress consistent with
    the mandate of the Supreme Court's decisions, and that was
    reflected in our proposed rule.
        EPA has prepared a report summarizing the small entity
    outreach to date, the results of this outreach, and how these
    results have informed the development of the proposed rule.
    Since publishing the rule, the agencies have met many times
    with small businesses and other entities. Most recently, the
    agencies participated in an SBA-sponsored roundtable on July
    21st. We look forward to continuing these efforts into the
    future, and before we finalize the rule, and during the
    remainder of the public comment period as we write the final
    rule.
        Thank you again, and I will be happy to answer your
    questions, Mr. Chairman.
        Chairman GRAVES. Thank you, Administrator. I appreciate it.
        Administrator McCarthy recently came--was in Missouri, my
    home state, and she was talking about obviously ``Waters of the
    United States,'' and she made the statement that the concerns
    of farmers and others--I want to make sure I say it right--that
    the proposed rules and the concerns about the proposed rules
    were silly and ludicrous, which I submit that the concerns of
    farmers, and small businesses, and everybody out there are
    certainly not silly or ludicrous. And I think a lot of these
    concerns may have been identified if the EPA had complied with
    the RFA. And that is my basic question here today, is why the
    EPA did not convene small business advocacy review panels. That
    is what it requires. They are formal panels, and you have said
    your statement that you have gotten input from the Ag
    community. I would like to know what that is. And when you say
    small entity outreach, what does that mean in terms of--and why
    did you all not do what the RFA does require? Because informal
    outreach is not small business review panels.
        Mr. PERCIASEPE. Under the RFA, we are required to--I am
    sorry. I will get the hang of that in a second here, Mr.
    Chairman.
        Under the RFA, whatever the regulatory agency is, not just
    EPA, is required to look at the small entities subjected to the
    rule. And this is the interesting thing about the Waters of the
    United States rule. It is a definitional rule. It defines where
    the other parts of the Clean Water Act will actually apply. So
    it does not directly impose any requirement on anybody if they
    are not discharging pollution. So it does not directly impact
    large businesses or small businesses in any direct way.
        So the jurisdictional determinations of whether the Clean
    Water Act would apply or not, and whether a state agency who is
    implementing the Clean Water Act under the arrangements under
    the law, would have to require an entity, small or large, to
    get any kind of permit would only be related to whether or not
    they were going to discharge pollution. And this regulation
    does not regulate discharges of pollution, just where the
    existing permit programs would have to work.
        But also, more importantly, we are reducing the scope of
    where the Clean Water Act applies from the current on-the-books
    regulations that the Supreme Court was acting on in the last
    decade, and so we are not expanding where permits would be
    required.
        And so when we looked at all of that together, we did not
    see the applicability under the Regulatory Flexibility Act.
    However, we did see a desire, as we almost always have, of
    being able to engage all stakeholders, including small
    entities, and we have had a process underway to do that. And we
    will continue. We are planning more roundtables, as well.
        Chairman GRAVES. When you say no discharge, discharge can
    include dirt and sand runoff. Water, rainwater.
        Mr. PERCIASEPE. Rainwater is not a pollutant.
        Chairman GRAVES. Well, when it interacts with dirt and sand
    and you are carrying dirt and sand, that is considered a
    pollutant by the EPA.
        Mr. PERCIASEPE. It would have to be--let me just be clear.
    The jurisdiction of the Clean Water Act is where the existing
    laws and regulations would apply, not in any new requirement.
    So if you have to get a permit now, you would have to get a
    permit under this. But if you do not have to get a permit now,
    most likely you will not need a permit under this. If you plow,
    plant, and harvest, walk cows across a field, all these other
    things that you do in normal conduct of agriculture, if you do
    that now, you will be able to do that under this rule without
    any additional requirements from EPA or the Corps of Engineers.
        Chairman GRAVES. We go back to my original question. Before
    we do, you did say that you are reducing the scope in terms of
    the Clean Water Act, did you not?
        Mr. PERCIASEPE. Reducing.
        Chairman GRAVES. In your economic analysis, the EPA's
    economic analysis, you say there is a 3 percent increase in
    jurisdiction.
        Mr. PERCIASEPE. So the existing regulations were done in
    the 1970s and modified in the 1980s, and they have a very broad
    definition of what waters of the United States are. And
    essentially, we are asking field biologists to go out and
    determine whether any place on the landscape where water may be
    running has some impact downstream or on interstate commerce.
    That is what the current--the Supreme Court said we cannot use
    interstate commerce as a way to do this. It has to be based on
    some kind of scientific basis. I think they use the term of art
    ``of significant nexus.''
        Chairman GRAVES. Significant nexus.
        Mr. PERCIASEPE. So when we went back and looked at 20,000
    different determinations that were done in the last five years,
    and we applied it as strictly as we could, we saw somewhere
    where the applicability would go away, and we saw some where
    they had made the wrong call on the ground, even with the old
    regulations. So we were being conservative and said this looks
    like it could increase the amount of positive determinations
    for jurisdiction by 3 percent. But the existing regulation is
    much more expansive than that and has not been applied
    completely uniformly around the country. So this will actually
    constrict that.
        Chairman GRAVES. Well, why did the EPA not do small
    business, you know, the formal small business advisory review
    or advocacy review?
        Mr. PERCIASEPE. Well, we did not do it because--and it is
    not that we did not want to talk to small businesses, but we
    did not have the formal panel because the panel is for the
    direct impact on a significant number of small entities--a
    significant impact on a substantial number of small entities.
    The direct impact is not here from this rule. The impact, if
    any--and we think there will be not much, if any--is from the
    existing regulations that would apply.
        Chairman GRAVES. So what you are saying is that you
    determined, or the EPA determined that there was not going to
    be an impact so you did not have to comply with the RFA, which
    is the process of determining if there is any impact?
        Mr. PERCIASEPE. Well, we went through that analysis.
        Chairman GRAVES. You are supposed to get input from small
    businesses to help make that determination.
        Mr. PERCIASEPE. Yes. I believe we are required to lay out
    our rationale for what I just said in more detail in the
    proposed rule.
        Chairman GRAVES. Well, I think this is, you know, is far-
    reaching. In fact, the term navigable waters is used some 80
    times in the Clean Water Act, and when you come back and you do
    something as so far-reaching and we use new terms like
    ``significant nexus'' or in one of the expansions of this, too,
    is now a jurisdictional rate, a water that is adjacent to a
    jurisdictional water, which I do not even know what that means
    in terms of how expansive that could be. That could include
    anything. And it comes back to, as well, when you are making
    that determination on discharge or what that significant nexus
    is, that is an extraordinarily subjective determination.
    Obviously, going to be made by the EPA. I think with the impact
    that is out there with this, you know, it really bothers me
    that you all determined that this is not going to have an
    impact because we believe it does, you know, in a big way. And
    to say that we do not have to comply with the RFA because we do
    not think there is an impact I think is wrong.
        I have called on you all to withdraw this rule. I am asking
    again. I think the EPA needs to withdraw this rule and go
    through the process the way it should be gone through and
    follow the law. And I am very disturbed by that. And I am very
    disturbed by some of the things that have been brought out just
    now. I was not expecting some of your answers.
        With that, I will turn to--I will have some other questions
    later but I will turn to Ranking Member Velaazquez.
        Ms. VELAAZQUEZ. Thank you, Mr. Chairman.
        Deputy Administrator, the Clean Power Plan provides states
    with some flexibility to meet emissions reduction goals as they
    see fit. What happens if states fail to submit their plan by
    the deadline or EPA concludes a plan is not satisfactory?
        Mr. PERCIASEPE. It is our full hope and aspiration that
    that will not happen. That is why we are spending a lot of time
    with every state. We have tailored this rule so that it is
    tailored for every state, and we are meeting with every state
    to try to work through how they can make their plan successful.
    So, you know, the law has provisions in it that when states
    fail to do plans under the Clean Air Act, the EPA has the
    authority to propose a plan. We do not want to do that, and
    that would not be our objective.
        Ms. VELAAZQUEZ. Okay. In your testimony, you highlighted
    that many industries, including agriculture and forestry will
    continue to be exempt from most permitting. Do you expect the
    new rule will necessitate additional industry exemptions?
        Mr. PERCIASEPE. You are talking about the water rule?
        Ms. VELAAZQUEZ. Yes.
        Mr. PERCIASEPE. Yes. Well, under the Clean Water Act,
    agricultural activities are exempt from the rule--from the
    jurisdiction of the Clean Water Act, so that even if a water is
    jurisdictional under the proposal, if you are doing
    agricultural activities, you are exempt. You do not need to
    comply with any permitting processes, and we are not changing
    any of that.
        One of the things we have tried to do is clarify issues
    that farmers have brought up to us concerning ditches, where
    they may do some ditching to drain some upland areas when it
    rains, or even industry may do some on their industrial lot. Or
    some ditches at the side of highways. For the first time, we
    have never made it clear that those are not jurisdictional.
    Those would not be under the jurisdiction of the Clean Water
    Act.
        Ms. VELAAZQUEZ. Okay, Deputy Administrator, I guess you
    understand by now that there is frustration in this Committee
    regarding the fact that we have the Regulatory Act that would
    allow for agencies to compel or create a panel review process
    so that it will give a voice to small businesses. And I think
    that if you do that, the agency wins and small businesses also
    win because you will issue better regulations when you have
    input from small businesses. And small businesses will be more
    satisfied because they feel that you have been able to listen
    to them. I do not know why the reluctance. I just do not
    understand how you conclude or come to the conclusion that
    there is no direct impact on small entities because you have
    not provided us the process upon which you arrived to that
    conclusion.
        Mr. PERCIASEPE. Well, certainly, I want to be able to
    provide that to the Committee, and we will endeavor to do that.
    But whenever we do a rulemaking and we make a decision in our
    proposal that the direct impact--there may be indirect impacts,
    but the direct impact is not from the EPA rulemaking, then the
    law prescribes that that does not require a panel to be set up.
    But I want to be clear. That does not mean we should not reach
    out to small businesses.
        Ms. VELAAZQUEZ. And I understand you did.
        Mr. PERCIASEPE. And work with them.
        Ms. VELAAZQUEZ. I understand you did.
        Mr. PERCIASEPE. And we did.
        Ms. VELAAZQUEZ. Right? But my understanding is that the
    outreach took place three years ago and the language now is
    different.
        Mr. PERCIASEPE. On the water?
        Ms. VELAAZQUEZ. Yes.
        Mr. PERCIASEPE. Yes. We had a whole bunch of sessions a
    couple of years ago when we were working on guidance. People
    told us not to do a guidance, do regulation. We have proposed a
    regulation, which was built on some of the work we did back at
    that point. But since that time we have been working with SBA
    to do roundtable discussions. And as I mentioned, we had one on
    July 21st and we are planning to have more before we would
    finalize the rule. Roundtable discussions with small
    businesses.
        Ms. VELAAZQUEZ. So will you please share with us what you
    learned from that SBA roundtable?
        Mr. PERCIASEPE. Well, on the water side, believe it or not,
    we are learning that small businesses really want clean water,
    and it is really becoming clear. In fact, there was a recent
    poll done by the American Sustainable Business Council that
    found that 80 percent of small business owners want protection
    similar to what we are talking about; that 71 percent said
    clean water is necessary for their businesses.
        But we are also finding that they want to be clear when
    they are in, when they are out of that jurisdiction. And so one
    of our objectives is to take the existing regulations, which
    are--and see, one of the issues we have is people have not
    looked at those old regulations back in the 1970s and 1980s for
    a long time, and so when we put out a new one that is trying to
    replace it, they are only looking at the new one, and the old
    one is even vague. It is very vague. You know, downstream,
    interstate commerce, it is not a scientific principle, so we
    are trying to pull it back into a more defined place to provide
    that increased certainty, and that would be our objective, and
    we are hoping to get more comment on that.
        Ms. VELAAZQUEZ. Thank you.
        Chairman GRAVES. To clarify real quick, because you keep
    bringing up the exemption, the Ag exemption, but that is only
    section 404, dredging. There is no exemption for Ag under
    section 402.
        Mr. PERCIASEPE. If they are discharging pollution, like
    from a point source of solution.
        Chairman GRAVES. Okay. That can include, again, rainwater.
        Mr. PERCIASEPE. If it is runoff rain, it is nonpoint source
    pollution and it would not be covered under section 402. It
    would actually have to be in a pipe and be something that they
    are discharging, and Congress in 1987 asked that large animal
    feeding operations that discharge into a point source would be
    covered under 402. That is in the 1987 Clean Water Act
    amendments.
        Chairman GRAVES. Mr. Luetkemeyer?
        Mr. LUETKEMEYER. Thank you, Mr. Chairman.
        Administrator Perciasepe here, I want to thank you first. I
    know that one of the things I am working on is the proposed
    rule that is out there with regards to wood burning heaters. I
    have offered a bill to stop the nonsense of what you are trying
    to do, and I understand that there is some discussions going on
    between you and industry folks which I am very thankful for,
    and I hope that proceeds. I understand the need for conformity
    across the spectrum of this, but to go down the direction that
    we were going down there is pretty problematic for me. So I
    thank you for the willingness to work with industry.
        With regards to the other issues before us today, it is
    stunning to me when you make your statements that you did not
    see the effect on small business from trying to define a word
    in the law. To redefine or clarify is going to have dramatic
    impact. When you say, if you just define the word ``customer,''
    if you redefine that suddenly you have from a very small group
    of people to a very large group of people. To take the word
    ``navigable'' out of this is unbelievable to me. And to not
    then go through the process of checking out the--doing the due
    diligence and the small business report and analysis before
    this is either extremely naiive and incompetent or it is
    arrogance in its highest to be able to flaunt your authority by
    ignoring the laws, the rules, the process, the procedure. This
    is unacceptable. Absolutely unacceptable, especially whenever
    you look at the fact that within this law there is also the
    word ``hydrologically connected,'' which means that all the
    waters, whether they are above ground, below ground, wherever,
    they are hydrologically connected, and the rain situation, it
    connects everything. This is extremely important. Extremely
    important. I cannot stress it enough, especially for rural
    parts of our country. I offer you an opportunity to discuss it.
        Mr. PERCIASEPE. Well, thank you for that question. You
    know, you are getting at the crux of the issue under the Clean
    Water Act, and we have to look at the body of everything that
    has been going on, not just old rulemakings of the Corps of
    Engineers and EPA, but also the Supreme Court rulings and what
    they have been telling us to do. And they have consistently
    been clear that it is not just navigable in the traditional
    sense. Particularly when you are dealing with clean water, the
    stuff that flows into the navigable, if it is polluted, it will
    pollute the navigable. And so everybody from Justice Scalia to
    Justice Kennedy have made it clear that it is more than just
    the navigable. It could be seasonal. I think that is a quote
    from Justice Scalia. Justice Kennedy uses the words
    ``significant nexus.''
        And to go back to your question, and I think this, Mr.
    Chairman, may get at some of your questions, yours as well,
    significant nexus is a new thing that the Supreme Court gave
    us. So we are trying to find out the purposes of the executive
    branch putting out a proposed regulation, and I have dicta here
    Chief Justice Roberts telling us to do these regulations.
        Just one more second. I promise.
        So nexus is definitely hydrology, as you just pointed out.
    And what is the connection? Well, you could make the argument
    as the chairman made that rain falling is connected somehow.
    And so one of our jobs in this rulemaking, and one of the
    things that we are most interested in trying to get more input
    on, is how do we define significant? Everything might be
    connected but it is not all significant. So back in the old
    regulation it said if it had any impact, probable or any impact
    on downstream interstate commerce, what we are trying to use is
    the science of hydrology and say it has to have certain
    characteristics that are identifiable by a hydrologist that
    there is enough flow in that water course that it is frequent
    enough, and enough that it creates these characteristics on the
    landscape. Otherwise, it is not significant. So we have tried
    to do that in this rule.
        Mr. LUETKEMEYER. You just made my point though, sir, of why
    did you not have--why did you not go through the rulemaking
    process that you are required to? Because you just admitted it
    is a tremendously impactful situation you are discussing here.
    And you do not think it is not going to impact small businesses
    when you just said it is huge. You have got the Supreme Court
    involved in trying to define things and sort of direct you in
    some of your activities. And it is not worthy of going through
    the process that you are required to do, to go through and
    figure out the impact on small business? That is what the chair
    was talking about and what this hearing is all about today.
        Mr. PERCIASEPE. And we are working with small businesses
    and with the Small Business Administration.
        Mr. LUETKEMEYER. Yeah, but you just talked about how
    important it was and how big a problem it is, and yet now we
    still did not go back and do what you were supposed to do,
    which is determine the impacts based on the defects of it.
        I see my time is over. Stunning. Absolutely stunning.
        Chairman GRAVES. Mr. Tipton?
        Mr. TIPTON. Thank you, Mr. Chairman.
        I would like to be able to submit for the record a letter
    from the Waters Advocacy Coalition. It is signed by 39
    different organizations, among those the American Farm Bureau,
    the American Gas Association, Foundation for Environmental and
    Economic Progress, National Association of Home Builders,
    National Pork Producers Council, many others. The basic content
    of the letter is objecting to the insufficient analysis offered
    by the EPA on the impacts that this rule will have.
        Chairman GRAVES. Without objection, submitted.
        Mr. TIPTON. Thank you.
        Mr. Perciasepe, I am sorry.
        Mr. PERCIASEPE. Bob.
        Mr. TIPTON. Okay, Bob. As the letter that I am just
    referencing from the Waters Advocacy Coalition is noting, the
    agency certified the Waters of the United States rule as one
    that will not have significant economic impact on a substantial
    number of small entities, yet the agency did not provide any
    factual basis for that certification as required under the
    RFAs. Did the EPA simply fail to do this because a factual
    basis did not actually exist?
        Mr. PERCIASEPE. We provided an analysis to make the
    determination that the rule itself, looking at direct impacts,
    which is what we are required to do under the RFA, would not
    have a significant impact on a substantial number of small
    entities.
        Mr. TIPTON. What do you qualify is a substantial number?
        Mr. PERCIASEPE. Well, it is more the direct impact than the
    number.
        Mr. TIPTON. So we do not even know what the number is when
    we are talking about who is going to be impacted?
        Mr. PERCIASEPE. Well, we are not expanding the jurisdiction
    of the Clean Water Act. So any small entity that is currently
    covered by the Clean Water Act will continue to be covered by
    the Clean Water Act. We are not making more of them covered.
        Mr. TIPTON. Actually, you are saying not making more
    covered, but in your testimony you stated that people want to
    be clear whether they are in or out of jurisdiction, but under
    the determinations you are making you clearly can expand
    jurisdiction.
        Mr. PERCIASEPE. But that is not what we are proposing. We
    are proposing to not add any new waters to what is covered in
    jurisdictional. We are trying to exclude certain things.
        Mr. TIPTON. Is there connectivity between all waters?
        Mr. PERCIASEPE. There is, but they are not all significant.
        Mr. TIPTON. So does that, in fact, give you complete
    control?
        Mr. PERCIASEPE. They are not all significant and we make it
    clear in the rule that they are not all significant.
        Mr. TIPTON. What is significant?
        Mr. PERCIASEPE. We have defined some hydrologic
    characteristics that would make a water significant.
        Mr. TIPTON. What are they?
        Mr. PERCIASEPE. In the science of hydrology, if you look at
    a flowing area, whether it is flowing all the time----
        Mr. TIPTON. Flowing year round?
        Mr. PERCIASEPE. I said whether it is flowing
    intermittently----
        Mr. TIPTON. What is intermittently?
        Mr. PERCIASEPE. Not all year round.
        Mr. TIPTON. Not all year round. So it could be 10 minutes?
        Mr. PERCIASEPE. Well, let me--it could be enough that water
    flows there frequently enough----
        Mr. TIPTON. What is frequently?
        Mr. PERCIASEPE. All right. You are not going to let me
    answer?
        Mr. TIPTON. No, I am just trying to get down to the actual
    definition because the arbitrary nature of this rule----
        Mr. PERCIASEPE. It is not arbitrary, sir. And if you let me
    answer I can give you some clarity.
        Mr. TIPTON. Go ahead.
        Mr. PERCIASEPE. In the science of hydrology, you can look
    at a flowing--a depressed area where water would flow, whether
    it flows full-time or part-time--let us use those plain English
    words--it will exhibit characteristics on the ground. There
    will be a bed. There will be banks. There will be an ordinary
    high water mark. These are things identifiable to hydrologists.
    And if you do not have those characteristics, then there is not
    enough frequency of flow or volume of flow that would make it
    jurisdictional under the Clean Water Act. That is what we
    propose. That is limiting to anything that might have an impact
    downstream to interstate commerce.
        Mr. TIPTON. What you have just described to me--I live in
    the southwestern United States, in Colorado--we get one
    rainstorm, and with the lay of our land, you could have a high
    water marked caused by a 10-minute flow that then disappears.
    So under what you are describing to me, a 10-minute flow that
    happens once a year then becomes----
        Mr. PERCIASEPE. An ordinary high water mark is not
    something from being wet 10 minutes ago. It is something that
    can be seen on the rock in terms of debris or discoloration of
    the rock.
        Mr. TIPTON. Or a cut in the bank of dirt?
        Mr. PERCIASEPE. Erosional features are not covered.
    Erosional features. We excluded those.
        Mr. TIPTON. I would like to be able to move on just a
    little bit here and move in a little different direction.
        If you put out a rule under EPA, do you expect it to be
    followed?
        Mr. PERCIASEPE. Well, yes.
        Mr. TIPTON. You do? Should you comply with the RFA and with
    NEPA?
        Mr. PERCIASEPE. Yes, we do.
        Mr. TIPTON. You do? So is it appropriate right now under
    section 104 of the existing Clean Water Act that both
    retroactively and preemptively you are shutting down projects
    before determinations have been made under NEPA and the RFA?
        Mr. PERCIASEPE. I cannot answer that question because I am
    not sure what you are----
        Mr. TIPTON. Are you preemptively shutting down projects
    right now based off of the proposed rules, saying that you
    cannot proceed?
        Mr. PERCIASEPE. We have not done that.
        Mr. TIPTON. What about--I am sorry?
        Ms. VELAAZQUEZ. They have not issued the rule.
        Mr. TIPTON. But we have got a proposed rule.
        Mr. PERCIASEPE. Right. But we have existing regulations
    that are more expansive than the proposed rule.
        Mr. TIPTON. Okay. You know, up in Alaska, I just read--is
    it the Prebble Mine? Is that right? Pebble Mine?
        Mr. PERCIASEPE. Bristol Bay.
        Mr. TIPTON. Crystal Bay. Have you shut that down before the
    analysis has been done?
        Mr. PERCIASEPE. Our regional administrator made a finding
    that is out for public comment.
        Mr. TIPTON. Does that comply with NEPA?
        Mr. PERCIASEPE. There has been no action taken on that.
        Mr. TIPTON. No action. So it is not allowed to move forward
    until the action takes place?
        Mr. PERCIASEPE. They can do whatever they want while that
    action is under consideration. And that action is to look at an
    area of water that we would not want to see discharge into.
        Mr. TIPTON. Okay. Thank you, sir. I do not know if we are
    going to have a second round. I am way over time, Mr. Chairman.
        Chairman GRAVES. We can.
        Mr. Collins?
        Mr. COLLINS. Thank you, Mr. Chairman.
        Mr. Perciasepe, I have got to give you credit. I think you
    knew you were coming into the lion's den today and here you
    are. So I do give you a lot of credit. It is hard to defend the
    indefensible. And that is what your agency has sent you here to
    do.
        And for full disclosure, Mr. Perciasepe and I participated
    in a hearing a week or so ago on this very same issue on the
    Science Committee, and I will admit I concluded that hearing by
    saying to Bob that the public does not trust EPA. Farmers do
    not trust the EPA not to overreach. Congress does not trust the
    EPA. And at that point in time I pointed out the rule should be
    withdrawn, plain and simple and the EPA should start over.
        What we had in our Committee hearing in Science was we kept
    hearing words like confusion, uncertainty, misunderstanding,
    clarification throughout that hearing, and this was democrats
    and republicans alike. And I would like to also point out we
    all know about gridlock in Washington. There is only one agency
    that unites democrats and republicans, and that is distrust of
    the EPA. Your agency has united us where it is very hard to do
    so.
        Ms. VELAAZQUEZ. Please do not talk. Do not represent me.
    Okay?
        Mr. COLLINS. Okay. Well, here is what I can say factually
    to our ranking member. A majority of Congress, a majority of
    Congress, 240-plus members, republicans and democrats signed
    the letter that I authored to the EPA saying we do not trust
    you; withdraw the rule. That was a majority of the members of
    Congress. And your agency has continued to disrespect Congress,
    to go down your own road, and again, continue in this
    rulemaking when a majority of Congress--democrats and
    republicans--and on the Science Committee, the harshest
    questioning came from the democrat side about this particular
    rule. And I just came from a hearing in Science on the Clean
    Air Act and the war on coal. And a former Obama administrative
    official from the Department of Energy summed up the EPA this
    way, to paraphrase, the arrogance of the EPA is beyond pale.
    The Department of Energy was not legitimately asked to
    participate in the sum of this rulemaking. And in fact, he
    called it a political agenda by the administration and the EPA.
    This is a former Obama administrative official less than two
    hours ago.
        So my question is very simple. Given the facts, the
    majority of Congress has asked you to withdraw this rule, why
    will the EPA not withdraw the rule, start over? There is no
    rush. You are not under a deadline. There is no judicial
    deadline. What is the harm in listening to Congress and
    withdrawing this rule, clarifying all the misunderstandings and
    confusion and everything else, and come out with a clean rule?
    Why will the EPA not do that? Or will you do that?
        Let me start with will you withdraw the rule? Yes or no?
        Mr. PERCIASEPE. The agency----
        Mr. COLLINS. Yes or no?
        Mr. PERCIASEPE. No.
        Mr. COLLINS. Okay. Why not, given that Congress has asked
    you to do so?
        Mr. PERCIASEPE. You know, you all have put the agency in a
    very difficult situation. We are trying to improve the
    situation out there given the Supreme Court constantly----
        Mr. COLLINS. But let me go back to why will you not
    withdraw the rule and start over? What harm is there in
    withdrawing the rule and starting over when a majority of
    Congress is on the record asking you to do so, republicans and
    democrats? What is the harm in doing that and do the RFA? What
    is the harm? Is there any harm? Is there something we do not
    see?
        Mr. PERCIASEPE. We continue with the uncertainty that
    everybody----
        Mr. COLLINS. What is the harm in withdrawing the rule?
        Mr. PERCIASEPE. The harm would be in maintaining the
    uncertainty that currently exists, and we are not going to--we
    are going to continue to try to solve that problem. This is
    just a proposal.
        Mr. COLLINS. So, again, let us just be clear. You do not
    care that a majority of Congress----
        Mr. PERCIASEPE. I do care.
        Mr. COLLINS.--who sets the laws----
        Mr. PERCIASEPE. I do care.
        Mr. COLLINS.--has asked you to withdraw the rule?
        Mr. PERCIASEPE. I do care very much.
        Mr. COLLINS. Then why do you not withdraw it?
        Mr. PERCIASEPE. Because I need to fix the rule.
        Mr. COLLINS. No, you need to withdraw the rule. Congress
    has asked you pointedly, withdraw the rule. You have just said
    no. There is no legitimate reason. There is no timing. There is
    nothing but the arrogance of the EPA.
        Mr. Chairman, I yield back.
        Mr. PERCIASEPE. You know----
        Chairman GRAVES. Go ahead.
        Mr. PERCIASEPE. I mean, I have a Supreme Court Chief
    Justice----
        Ms. VELAAZQUEZ. That was my question.
        Mr. PERCIASEPE. Who is saying why do the agencies not do
    this?
        Ms. VELAAZQUEZ. Yes.
        Mr. PERCIASEPE. And so, you know, there are three branches
    of government. I have got one branch who wrote me when I was
    the acting administrator saying please do a rulemaking. Now I
    have that branch saying maybe we should withdraw it. I have
    another branch of the government--you know, I am going right
    back to the Constitution here. I have another branch of the
    federal government saying when are the agencies going to get
    their act together and do a rulemaking? So, I would propose
    that it would be in everybody's interest for us to take the
    comment, get a----
        Chairman GRAVES. I just thought it would be in everybody's
    interest for us to take the comment----
        Ms. VELAAZQUEZ. Would the gentleman yield?
        It is kind of cynical. And look, I am a member of this
    committee for 22 years. I have been fighting the
    administration, whether republican or democrat, when I feel
    that things are not done right on behalf of small businesses.
    But I have to say that when it comes to repealing Obama Care,
    the Supreme Court is the law of the land. When it comes to the
    issue of water, the Supreme Court, is telling them that they
    have to address the issue. There's just no winning in this
    house.
        Chairman GRAVES. Just to clarify, was there a judicial
    deadline? I just ask to clarify. Was there a judicial deadline?
        Mr. PERCIASEPE. No, sir.
        Chairman GRAVES. Mr. Schweikert?
        Mr. SCHWEIKERT. Thank you, Mr. Chairman.
        I would like to submit to the record, from a roundtable we
    held in Arizona about a month and a half ago, the transcript.
        Chairman GRAVES. Without objection.
        Mr. SCHWEIKERT. Thank you, Mr. Chairman.
        Mr. Perciasepe, and from future--from now known as
    Administrator Bob. How is that?
        Mr. PERCIASEPE. Deputy Administrator Bob.
        Mr. SCHWEIKERT. Excuse me, Deputy Administrator Bob.
        And there is a rumor going around you are going to be
    leaving us in a few weeks. Is that true?
        Mr. PERCIASEPE. Yes, it is correct.
        Mr. SCHWEIKERT. And this is how you celebrate your
    departure, is hanging out with us?
        Mr. PERCIASEPE. I know that I am trying to represent my
    position of my agency and the president correctly here but I
    view this as my solemn duty to do so.
        Mr. SCHWEIKERT. And you were in front of the Science
    Committee a couple of weeks ago, and as I even shared with both
    my staff and even some of the members on the other side, I
    thought you treated me particularly fairly because some of the
    discussion, having spent a lot of time digging into this Waters
    of the U.S. rule, it is complicated. But you do understand our
    stress level, particularly for those of us from the arid
    southwest, what some of these rules mean.
        I am going to ask a favor of you.
        Mr. PERCIASEPE. Yes, sir.
        Mr. SCHWEIKERT. Because rumor is you are leaving in about
    three weeks. In the Science Committee there was a request from
    Mr. Webber from Texas specifically asking for any of the maps
    that Fish and Wildlife--and I know you provided some of the
    maps but we would really like to get our hands on any of the
    mapping that was provided by Fish and Wildlife in helping sort
    of design the impacts and the calculations, particularly
    economic impacts of this rule.
        Mr. PERCIASEPE. Okay. I think we may have provided those
    maps earlier this week, but if not, I will absolutely make sure
    that they go in there.
        Mr. SCHWEIKERT. My notes may be a little bit----
        Mr. PERCIASEPE. That is fine. You know, there is always a
    running back and forth between all of us. But let me just say
    that when I did look into that, I did discover that the maps
    were created as far back as 2005, and they have been updated
    since then. And they were not for regulatory purposes. But I
    think all the maps that I think we had, if they are not at the
    Committee now, they are going to be there this week.
        Mr. SCHWEIKERT. Well, Deputy Administrator Bob, one of our
    concerns is was the mapping also used in trying to do some of
    the economic analysis and trying to understand its impact of
    the rules?
        There was one scenario that I left from last week, and I
    really wanted to sort of walk through because you have personal
    experience on this. When you were with--was it Sierra Club
    before?
        Mr. PERCIASEPE. No. No, sir. I was with the National
    Audubon.
        Mr. SCHWEIKERT. Oh, sorry.
        Mr. PERCIASEPE. Bird conservation.
        Mr. SCHWEIKERT. And one of the projects was in our Dry Salt
    River.
        Mr. PERCIASEPE. Yes.
        Mr. SCHWEIKERT. And it is a beautiful project. You know,
    the rehabilitation using the gray water.
        Under this updated Waters of the U.S. rule, do you believe
    you would have to get a 404 permit to do that project today?
        Mr. PERCIASEPE. The actual restoration?
        Mr. SCHWEIKERT. The actual retention, the movement, the
    capturing of the water, the actual project, would that project,
    from beginning to end, today require a 404 permit?
    Particularly, also, some of the--there was some environmental
    damage. I mean, old batteries in there.
        Mr. PERCIASEPE. There was a brownfield site across there.
    And I think as I mentioned to you I worked with the former
    mayor of Scottsdale, Sam Campagna, to do that project. And it
    may have gotten a 404 permit. I think it was the Corps of
    Engineers that did that restoration.
        Mr. SCHWEIKERT. Actually, I think they actually did some of
    the water channeling. I think the project was separate. I am
    reaching back in my mind.
        Mr. PERCIASEPE. Well, down in the stream bed, where I have
    actually gone birding and looked at where there has been some
    water brought into there and some vegetation is now growing, in
    that streambed, if there was a disturbance of the streambed----
        Mr. SCHWEIKERT. It would have required, particularly
    under----
        Mr. PERCIASEPE. But up on--yeah.
        Mr. SCHWEIKERT. Because there are two mechanics, and I have
    only like 45 seconds to try to run this through. One was in
    many occasions where we have actually tried to do good acts, my
    fear is if this gets an expansive interpretation, all of a
    sudden the good acts, I am now going to be required to get a
    404 permit and go through those hoops. So in some ways is there
    a potential we are creating a barrier to there?
        And I am going to sort of leap and let you sort of combine
    the answers. The last time I sort of walked through a scenario
    of, okay, this is not about the water, it is about anything
    that is a pollutant in the water. So our little scenario of the
    dry wash behind my home, and I put fertilizer and plant and the
    sediment, you know, and that 14 inches of rain I get a year
    that all come on a Tuesday, it is running down the wash and
    hits the Verde River, and the Verde River hits the Salt River,
    and runs into the rehabbed riparian area, I use fertilizer. I
    move dirt. It potentially got washed down that dry wash into a
    running river. Did I potentially need a 404 permit in planting
    my tree? And what is my exposure that may not be your intent
    today, but the way this is drafted, there is a whole new cause
    of action and future litigation that is coming at us that the
    lawyers now get to spend the next decade moving that direction?
        Mr. PERCIASEPE. Well, the quick answer is, without--and I
    want to put the asterisks next to this. I would love to go to
    your house and look at this project myself, but I would say it
    is highly unlikely it is significant under the way we prepared
    this rule. Whereas, the existing regulation, the law on the
    books that the Supreme Court has been opining about, it has no
    such clarity of what is significant. It just simply says
    anything the field biologist thinks might have an impact
    downstream.
        Mr. SCHWEIKERT. Mr. Chairman--because I am way over time--
    litigation exposure.
        Mr. PERCIASEPE. Yeah. I mean, I think it would be less than
    what currently exists.
        Mr. SCHWEIKERT. Thank you, Mr. Chairman.
        Chairman GRAVES. Mr. Payne?
        Mr. PAYNE. Thank you, Mr. Chairman.
        And I will follow Mr. Schweikert's lead and call you Deputy
    Administrator Bob. And also, based on, hearing that you are
    going to be leaving, probably after today you figure you should
    have left three weeks and a day earlier. Well, we are going to
    try to just get some questions answered.
        There has been a lot of discussion about how the EPA's new
    rule can negatively affect. Can you just list or describe ways
    that it can positively affect small business?
        Mr. PERCIASEPE. Well, I will just do something very quickly
    here.
        On the water definitional rule, or the Waters of the United
    States, we firmly believe--and we heard this from the
    discussions we have had with small businesses that (a) they
    want to make sure that the law is interpreted correctly because
    they want clean water; but second, they want to be able to have
    clarity or the certainty of what is in and what is out. And you
    know, we are struggling to do that. And that is our intent to
    try to do that. And we will continue to endeavor in that.
        On the Clean Power Plan rule that we have talked about a
    little bit here, one of the things that EPA has laid out there
    is that we want states to really seriously consider energy
    conservation as an important part of what their plan might be.
    And I know for sure that the whole sector of energy
    conservation, whether it be smart grids or how to make things
    better in your house is going to be very oriented to small
    business opportunities.
        Mr. PAYNE. As a matter of fact, through Homeland Security
    and the Cyber and Security Bill, I have a piece of legislation
    that was amended into that bill and to do a smart grid study
    for upgrading the grid across the country and benefitting areas
    that tend to have natural disasters and also looking at
    manmade. So that is right up my alley.
        Now, why are you having such a hard time getting small
    business to understand these issues?
        Mr. PERCIASEPE. Well, I think that we are spending a lot of
    time with small business. I know that one of the issues the
    Committee has is why not do that under the Regulatory
    Flexibility Act, and it is because a lot of the impacts that
    may or may not accrue, and a lot of the benefits that may or
    may not accrue, depending on how these proposals unfold, will
    be indirect impacts or indirect opportunities, and the
    Regulatory Flexibility Act deals with direct impacts. So we are
    not regulating somebody who does an energy conservation
    project, you know, with a new kind of thermostat. We are not
    regulating those people, but they may have an opportunity to
    provide more business.
        So we have reached out to small businesses. We have
    roundtables underway with the SBA on the water rule. We are in
    the process of finishing up our formal hearings this week on
    the Clean Power Plan, and then we plan between now and when the
    rule is finalized, and even way before that, to spend even more
    time with small businesses, whether it is small co-ops or small
    municipals, or even the indirectly impacted small businesses.
        Mr. PAYNE. Okay. And, you know, around the whole issue
    around the complexity of all of this, you know, the Clean Water
    Act, you know, increase the amount of time it takes to make
    jurisdictional determinations. In your estimation, how much
    shorter time will these jurisdictional determinations take with
    the proposed rules as opposed to the old ones?
        Mr. PERCIASEPE. The current one, because of the way it is
    written, requires almost every request for--or any project that
    might be near water, for them to go through a process on a
    case-by-case basis with the Corps of Engineers. The other thing
    we are trying to do here, and the intent is to have enough
    definition, so along the lines we were talking about earlier,
    Congressman, that it would reduce the number of case-by-case
    determinations and therefore make it more quickly apparent
    whether they will have a jurisdictional issue or not.
        But I also want to point out, if you are not going to
    discharge pollution or put fill into the water, it would not
    matter one way or the other.
        Mr. PAYNE. Okay. Thank you very much, and I yield back.
        Chairman GRAVES. Mr. Hanna?
        Mr. HANNA. Hi, how are you?
        Mr. PERCIASEPE. I am fine.
        Mr. HANNA. Good.
        You know, if you are trying to prove that you are trying to
    make things easier, you are not really doing it. As you can
    sense, the cynicism in this room is, at least on our side of
    the aisle, profound. And I do not think that it is borne out of
    some disinterest in the environment or anything like that. I
    think for one thing, your former administrator, Lisa Jackson,
    her comment that it was not her job, to paraphrase, to worry
    about the economy, if you remember that, was, I think, a scary
    thing to hear for everyone in the country. And the subjective
    nature of the conversation here today and the notion that so
    much about this has the potential to be arbitrary and
    capricious and the concern that the farmers and builders and
    contractors that I deal with daily--I was in construction for
    many years--it is not in any way--and I am not surprised that
    you said that businesses are concerned to have clean water, I
    mean, who is not? That is really not much of a statement with
    all due respect, or a surprise.
        The problem your organization has is nobody believes you.
    You have no credibility here because, frankly, people feel put
    upon and the burden--I just went through almost 13 years in our
    community to get a 404 permit through the Army Corps of
    Engineers for something that was a relatively simple process
    and it would appear to a lot of people I know, and I am sure
    you hear this, too, that the EPA is now our enemy, not our
    friend. That somehow everything has become so burdensome, so
    complicated, so drawn out that the growth that we look for in
    our economy, the opportunities that lie in front of people,
    that you are an obstructionist organization and not someone who
    ushers them through the process. And for people in business,
    you know, every bureaucrat that walks through the door, it
    feels like they are throwing an obstacle at their feet. And
    here you are, one more, but yet you are bigger than all the
    rest and you people assume that you can in some way interfere
    in everything, everywhere, all the time.
        And when I hear the definition of navigable waterways, you
    know, and people want to believe--people are inclined to
    believe that it means the water off their roof. So when you
    explain that it does not, and I am just telling you what the
    people I work for feel, they do not believe you, and they are
    concerned. And if the concern seems disproportionate to your
    intent, which I am listening to you, and I believe you are
    earnest in what you are saying, you need to back up because
    frankly the outcome that you desire is going to be pushed back
    by this entire country, not because it is not an outcome that
    we might all want and even agree on, but because frankly,
    nobody believes you.
        I wonder how you feel about that. Or if you even agree.
        Mr. PERCIASEPE. Well, I have not, and nor does EPA do
    polling to determine who believes us or who does not believe
    us----
        Mr. HANNA. But you do not have to.
        Mr. PERCIASEPE. Let me just say what I believe. Okay?
        I do not believe that most people do not trust EPA. The
    polling I have seen, for what it is worth, back in the past by
    others, show that people prefer EPA to be setting standards.
    And, you know, but I do not have enough data on what every
    person in the United States things about----
        Mr. HANNA. No, but preferring to have them set the
    standards is not the same as trusting them.
        Mr. PERCIASEPE. Yes. So this trust thing is a problem,
    particularly if Congress has it. This is not an idle problem,
    and we need to work on that. And I am here today trying to
    explain what our intent is, and to try to build a bridge.
        Mr. HANNA. I appreciate that, but you are not going
    anywhere with the presentation I see today. Backing up and
    blaming the Supreme Court, or using them as a crutch, that also
    is not helpful because at the end of the day this place has the
    ability to do what it would like to see done. We have the
    capacity to make mistakes here, to undo what you might regard
    as good work and may very well be good work, but if you cannot
    make us trust you in that regard, you are going to have an
    outcome that you do not like and that potentially we do not
    like.
        My time is up. Thank you, Chairman.
        Chairman GRAVES. Mr. Huelskamp?
        Mr. HUELSKAMP. Thank you, Mr. Chairman. I appreciate that,
    Deputy Administrator, for being here today. And if I have asked
    a question that has been asked before, if you would restate the
    answer, I would appreciate that.
        One thing that many of my constituents are asking and I
    share the same concerns as my other colleagues here, but trying
    to understand the claim from the EPA administrator in Kansas
    City a couple weeks ago, and similarly yours here, this would
    provide more certainty compared to your current regulations.
        Can you tell me if this regulation would allow the federal
    control or regulation of ephemeral streams?
        Mr. PERCIASEPE. It would make ephemeral streams
    jurisdictional if they exhibit those hydrologic characteristics
    that would be an indicator of significant and frequent enough
    flow to be significant.
        Mr. HUELSKAMP. Let me get the definition of what is
    significant, and I have been through this at the state level.
    Would this increase or decrease the amount of Clean Water Act
    jurisdiction compared to current law or regulation?
        Mr. PERCIASEPE. We believe it would reduce.
        Mr. HUELSKAMP. It would reduce that.
        Have any states suggested otherwise in their comments?
        Mr. PERCIASEPE. I have not read the state comments yet.
        Mr. HUELSKAMP. Have you read any comments about the rule?
        Mr. PERCIASEPE. Well, the comment period is open until I
    think October.
        Mr. HUELSKAMP. You have not peeked at them a little bit
    early?
        Mr. PERCIASEPE. I have been out talking to some states.
        Mr. HUELSKAMP. Have these states indicated that they
    disagree with the assessment that it reduces jurisdiction?
        Mr. PERCIASEPE. I have not heard that.
        Mr. HUELSKAMP. Well, I will give you a clue. In Kansas, the
    state of Kansas, the estimates are from our state, it increase
    the jurisdiction by 400 percent--400 percent more jurisdiction
    under the proposed rule. Instead of regulating 32,000 miles of
    stream miles, it would increase that to 134,000 miles. How
    could they be that wrong? You are claiming the jurisdiction
    goes down. The state of Kansas actually lives there, and we
    were a better environment. As a farmer myself I consider myself
    the first environmentalist. How could they be so wrong in
    misunderstanding of your rule?
        Mr. PERCIASEPE. I would love to see their analysis and I
    would love to get our staff to sit down with them and
    understand why we see such a different situation. I know that
    more than half the states already cover ephemeral streams
    themselves. Including Kansas.
        Mr. HUELSKAMP. Not under the Clean Water Act, sir.
        The issue here also I want to ask about is navigable. Can
    you describe or define navigable for the Committee, please?
        Mr. PERCIASEPE. Navigable in the Webster Dictionary----
        Mr. HUELSKAMP. No, in the Clean Water Act.
        Mr. PERCIASEPE. In the Clean Water Act, navigable has been
    defined by Congress as waters of the United States. That is
    what the definition is in the Clean Water Act of 1972, and the
    Supreme Court----
        Mr. HUELSKAMP. No, navigable is an adjective. Not
    describing the Waters of the U.S. It is a limit on the
    jurisdiction of the Clean Water Act. It does not describe every
    water of the U.S., sir. You are clearly wrong.
        Mr. PERCIASEPE. Well----
        Mr. HUELSKAMP. Can you define navigable? Because that is a
    limit on the power.
        Mr. PERCIASEPE. Navigable waters include waters that flow
    into traditionally navigable waters that can have an impact on
    the biological, chemical, and physical integrity of those
    navigable waters.
        Mr. HUELSKAMP. So navigable water is water that flows into
    a navigable stream? So nonnavigable waters by that definition
    become navigable?
        Mr. PERCIASEPE. No. Waters of the United States----
        Mr. HUELSKAMP. Waters of the U.S. do include nonnavigable
    waters. Is that correct?
        Mr. PERCIASEPE. Yes.
        Mr. HUELSKAMP. Okay. So there is a distinction.
        Mr. PERCIASEPE. They include the waters--the Clean Water
    Act is looking at controlling water pollution. And controlling
    water pollution, even if----
        Mr. HUELSKAMP. The authority of the federal government is
    limited to navigable waters.
        Mr. PERCIASEPE. And controlling water pollution that could
    enter it.
        Mr. HUELSKAMP. Under navigable waters.
        Here is a question for clarification. Water pollution
    enters----
        Mr. PERCIASEPE. From other streams.
        Mr. HUELSKAMP. You believe this is going to bring some
    certainty.
        Here is a body of water in Western Kansas. It actually
    rained once upon a time. This was a few weeks ago. Is this a
    navigable stream?
        Mr. PERCIASEPE. It is neither navigable or waters--or
    jurisdictinoal under the Clean Water Act.
        Mr. HUELSKAMP. You can guarantee me today that this will
    not be under the jurisdiction of the EPA?
        Mr. PERCIASEPE. I am just not going to go any further than
    what I just said because that is just unfair. I would have to
    go out and look at that, but it looks like wetness in a field
    which would not be navigable--which would not be
    jurisdictional.
        Mr. HUELSKAMP. It might flow down the road ditch to a
    navigable stream.
        Mr. PERCIASEPE. It does not matter. It does not exhibit the
    characteristics that I mentioned earlier, or the hydric soils
    or the hydric vegetation. That is a puddle in a field and it
    would not be covered.
        Mr. HUELSKAMP. So you can absolutely guarantee me a puddle
    in a field, a road ditch in western Kansas will not be
    covered--guaranteed not covered under this new regulation?
        Mr. PERCIASEPE. A road ditch that is not a channelized
    stream would not be covered. Some road ditches actually are
    channelizing a stream, but putting that aside, road ditches,
    the vast majority of them are not going to be covered, not be
    jurisdictional, and wet fields are not going to be
    jurisdictional. They are not going to be jurisdictional.
        Mr. HUELSKAMP. I yield back, Mr. Chairman.
        Chairman GRAVES. Ranking Member Velaazquez.
        Ms. VELAAZQUEZ. Yes. Mr. Chairman, I would like to ask
    unanimous consent to submit for the record a report from the
    American Sustainable Business Council that found that small
    business owners are concerned about climate change--57 are
    concerned about carbon pollution, 53 percent are concerned
    about climate change, and 53 percent believe that climate
    change will adversely affect their businesses.
        Chairman GRAVES. Without objection.
        Ms. VELAAZQUEZ. Thank you.
        Chairman GRAVES. Mr. Luetkemeyer?
        Mr. LUETKEMEYER. Thank you, Mr. Chairman.
        Just a couple questions, sir. With regards to power plant
    oversight, I know that apparently--correct me if I am wrong
    here--it appears that the agency, when they figure the costs of
    the rules and regulations in power plant rules, that they
    considered it on a global scale. Is that correct? The cost
    benefit on a global scale?
        Mr. PERCIASEPE. Well, I am not exactly sure of the term
    there, but when we look at----
        Mr. LUETKEMEYER. Do you take other factors besides what
    would we could consider domestic? Things that would affect only
    the United States? Do you take into effect whatever cost
    savings or costs otherwise may be affecting other areas of the
    world? Our neighbors to the north, south, east, west?
        Mr. PERCIASEPE. I do not know the answer to that. I am
    going to say generally no, but here have been instances where,
    obviously, we have cooperated with other governments, like
    Canada on acid rain, where we have done joint work together.
    But I would generally say that we were looking at the impact in
    the United States.
        Mr. LUETKEMEYER. Well, what I have been told is that you do
    take into account calculating benefits on a global scale for
    coal referenced rules, which have a dramatic impact on coal-
    fired electrical generation plants, of which I have got a
    couple in my district. In fact, one closed up as a result
    partially of the rules that have come down. And I am just kind
    of curious why you included the costs of savings or other
    benefits of other countries over what should be, I would think,
    only the cost benefits that would be for us domestically.
        Mr. PERCIASEPE. I really apologize. I should know what you
    are asking, but I do not want to guess. So if it is okay with
    the Committee and the chair, I would like to research that----
        Mr. LUETKEMEYER. Sure. We can follow up.
        Mr. PERCIASEPE.--and provide the answer.
        Mr. LUETKEMEYER. Sure.
        Other than that, just one other concern. When you go down
    the road with these different rules and regulations that you
    are looking at, basically, the president seems to be trying to
    implement carbon tax rules around the Congress by implementing
    some of the rules through your agency. I think it is very, very
    concerning. I think, you know, again, when you do this, you
    need to go through the RFA process to find the effect on small
    business, and it is very concerning to me that we are even
    going down this road when you look at what Australia just did.
    Australia implemented the carbon tax two years ago and found it
    increased costs significantly, over 15 percent, and it affected
    thousands and thousands of jobs, and they now have withdrawn
    that. I think we need to be very careful down the road that we
    are going down and we need to make sure we continue to adhere
    to the process and the procedures that are in place which today
    we are talking about, the Regulatory Flexibility Act. It is a
    very, very important tool for analysis, not only for you but
    for us, to make sure that the rules that you are putting in
    place are something that we can go along with, that we believe
    our constituents, our small businesses are having to live under
    and would be beneficial to them rather than costing them.
    Again, when you see what is coming out of other countries with
    regards to the kind of power plant rule and regulation that is
    being proposed, and they are backing off, it should give us
    pause. And for certain, to be able to--I would think it would
    be a red flag to make sure you adhere to the process of
    procedures.
        With that, if you want to respond, fine, sir.
        Mr. PERCIASEPE. Sure. Just a couple of quick comments.
        First of all, I want to be really clear to the Committee.
    We believe that we should be looking at the impacts of all
    different segments, whether it is small business or large
    business. I just want to be really clear about that. And
    somebody at EPA did make the statement earlier that it is not
    in our job description--but it was not Lisa Jackson, I can
    assure you that. It was not. It was a lower level EPA employee
    who made a mistake. That is all I want to say. Made a mistake.
        Mr. LUETKEMEYER. Now, to follow up on that, sir, before you
    move on to your next comment, that is why it is important that
    you do the RFA, because that affects the economic concerns that
    we have. And when you have a comment like that, that gives us
    pause.
        I am sorry. Go ahead.
        Mr. PERCIASEPE. So, there are two things. I want to make it
    clear that we are not trying to implement a carbon tax or
    anything like that here. The Clean Air Act gives us very
    specific authority to look at sectors, and so in the last term
    we did a light duty vehicle regulation that reduced the
    greenhouse gases from light duty vehicles. We worked with the
    Department of Transportation on that to make sure it aligned so
    the automobile manufacturers only had one thing to implement
    between the CAFE and the carbon rules. We reached consensus
    with the automobile manufacturers. We had a process with the
    small automobile manufacturers. We exempted them from the rule
    completely. And then they came back to us and said, you know,
    we want to be able to opt in if we are making really efficient
    cars because we want to sell our credits to the other
    automobile manufacturers. And so we actually have an opt-in for
    small businesses in that rule. So I do not want you think we do
    not really think about this.
        And the two big carbon--so-called carbon rules that EPA is
    working on--one was the automobiles, which is in the process of
    being implemented now and has those kinds of provisions I just
    mentioned, and the other one, which is the power plants, which
    we have not implemented yet, which is going to be something we
    are going to have to work out with states, where we are going
    to be continually looking for ways that we can incorporate
    ideas and opportunities like that to be able to deal with small
    businesses, and we hope that many small businesses will
    capitalize on some of the business opportunities as well.
        But we do look at this. I want you to believe that and not
    not trust us.
        Mr. LUETKEMEYER. Thank you for your comments.
        I yield back. Thank you, Mr. Chairman.
        Chairman GRAVES. Mr. Tipton?
        Mr. TIPTON. Thank you, Mr. Chairman.
        I would like to associate myself with many of the questions
    and comments of Mr. Luetkemeyer because one issue, and Deputy
    Administrator, does it disturb you a little bit when you were
    just talking about--and that is admirable that they were able
    to achieve this, but some of the small car companies wanting to
    be able to sell their carbon credits back, does it disturb you
    when we talk about the sense of Congress--which created the
    EPA, by the way--had rejected cap and trade? And effectively
    now we are seeing it moving forward in a regulatory action?
        Mr. PERCIASEPE. I missed----
        Mr. TIPTON. I was just quoting you. You were just saying
    that they wanted to be able to use their credits in regards
    to----
        Mr. PERCIASEPE. Oh, we always do this in our rules. In all
    of our automobile rules. If one automobile manufacturer does a
    better job of pollution control than others, they can move
    those credits around between the automobiles. But they cannot
    sell it to, you know, a power plant or vice versa. It is
    inside--market mechanisms has been something EPA has used in
    rulemaking going back to the early 1980s.
        Mr. TIPTON. Yes, sir. I understand that. I guess my point
    is Congress had rejected under a democrat administration cap
    and trade.
        Mr. PERCIASEPE. This is not a cap and trade program. This
    is the ability to trade credits in between. But again, we have
    been doing it since the 1980s.
        Mr. TIPTON. And I think that is really part of the concern
    is we see stepping stones to movement.
        If we go back to water, when Secretary Salazar, secretary
    of interior was intiating--were you familiar with the Blueways
    program?
        Mr. PERCIASEPE. No, sir.
        Mr. TIPTON. Blueways was coming out of the Department of
    Interior, which is effectively a precursor to the waters of the
    U.S. And I would invite you or your successor to make sure that
    they read the reports that were coming out of the Blueways
    program, effectively citing pollutants coming from faraway
    farmlands in the Midwest. And it effectively really goes to Mr.
    Schweikert's point in terms of once water is put on the picture
    that Mr. Huelskamp had shown you, we may not define that as
    navigable, but as it flows down effectively, that backflow
    becomes all navigable waters.
        And that is really the concern people have is once you
    start regulating, it does have impacts, and those costs that
    are going to be associated with it. Through this Committee, we
    actually have the empirical evidence that through regulatory
    costs in this country right now, Americans are paying $1.8
    trillion in regulatory costs. And no one is suggesting we get
    rid of all regulations. But those are real costs.
        Right now in Colorado, yesterday, you held EPA hearings,
    and unfortunately, you held them in Denver. We sent two letters
    to the director requesting that the hearing actually be held in
    the impacted area over in Craig, Colorado, Moffat County in my
    district. We received no response from the EPA. Would it be
    appropriate when we are holding these hearings, and I think you
    heard loud and clear the importance of these RFAs, to actually
    go to the impacted communities rather than just going to urban
    areas for hearings?
        Mr. PERCIASEPE. The hearings are just one aspect of our
    outreach, and we have tried to distribute them around the
    country in different parts of the country so people have an
    opportunity. Let me just say this categorically. EPA will meet
    with anybody who wants to meet with us on this, and we are
    going to reach out to virtually every state and the
    constituencies in each one of those states, and we are in the
    process of doing that.
        Mr. TIPTON. Great. Can we get a hold of you, and you will
    help facilitate with us for Director Jackson to be able to come
    to Craig, Colorado, and we will meet with him?
        Mr. PERCIASEPE. You tell me who it is they are meeting. I
    will try to figure out----
        Mr. TIPTON. We are going to be able to meet with community
    members, with county commissioners, state legislators, the
    impacted private entities in rural Colorado that are going to
    impacted by proposed EPA rules.
        Mr. PERCIASEPE. So we would want to work with the state of
    Colorado because they are the ones who are going to have to
    implement it.
        Mr. TIPTON. And you will be willing to come to Colorado?
        Mr. PERCIASEPE. I am willing to get on the phone and get
    with the governor and try to figure out how we do that.
        Mr. TIPTON. Great. We would love to be able to have you
    come in. And I think when we are talking a little bit about----
        Mr. PERCIASEPE. We will have a meeting. I do not know where
    the meeting will be, but we will have a meeting.
        Mr. TIPTON. I think that is part of the problem. We just
    had rural Coloradoans had to drive four and a half, six hours
    to be able to go to the meeting in Denver, Colorado. It is
    important that when we are talking about outreach, I think not
    to discard rural America because these are where the real
    impacts.
        And when we are talking about the states are going to have
    to implement it, do you share with me some of the concern when
    we are looking about some of the carbon credits? If you want to
    be able to see blue skies and a coal-fire power plant, come to
    Craig, Colorado with me. We will be able to see that. But the
    concern that we are hearing, and these is out of senior
    citizens that are on fixed incomes, young families that are
    just trying to be able to get started, they are seeing taxation
    via regulation to where those utility bills continue to climb.
    Is this taken into consideration at all by the EPA?
        Mr. PERCIASEPE. Our economic analysis shows that energy
    bills will decline.
        Mr. TIPTON. When?
        Mr. PERCIASEPE. Between now and 2030, the energy bills
    will----
        Mr. TIPTON. If I am paying $100, it is actually going to go
    down?
        Mr. PERCIASEPE. Our national estimate--remember, we are
    doing a national estimate--is that energy bills will decline 8
    to 9 percent.
        Mr. TIPTON. I would love to see that study.
        Mr. PERCIASEPE. It is in our Regulatory Impact Analysis.
    And we can point that out if the Committee would need to have
    that.
        Mr. TIPTON. Great. Thank you, Mr. Chairman. I yield back.
        Chairman GRAVES. Mr. Collins?
        Mr. COLLINS. I will be brief here.
        In looking through some of the rules and use of
    terminology, I think what seems to be bothering a lot of
    people, words like significant. And here in the proposed rule
    in the Federal Register it says for an effect to be significant
    it must be more than speculative or insubstantial. So when we
    use that word, is there any data behind that that would suggest
    what that means?
        Mr. PERCIASEPE. That is one of the things we are trying to
    deal--I believe--I may be wrong, and somebody behind me may be
    able to clarify--I believe that that is just the language that
    the Supreme Court used and what we are trying to do with the
    rest of the rule is actually try to put a boundary on that.
        Mr. COLLINS. Yeah, this is actually out of the regulatory
    text.
        Mr. PERCIASEPE. We were probably writing that in there, but
    Justice Kennedy's opinion. So, what we have done with the rest
    of the rule is try to say, well, what would that be? And it
    gets back to trying to do it on a scientific basis as opposed
    to does it affect----
        Mr. COLLINS. The problem is small business in trying to
    adhere to something in reading through this, they are not going
    to know where to take something using a word like significant.
        So I guess I would conclude simply in saying--well, let me
    also go to another point today. Too many times in Congress with
    the public it looks like the EPA has a ``solution looking for a
    problem.--So today in our Science Hearing on the coal plants, a
    data point came out that said if the United States industrial
    complex and the United States power generation complex produced
    no CO2 whatsoever, none, they were all shut down, how would
    that impact the amount of CO2 going into the atmosphere in the
    world? And the answer was 2 percent. So here we are. So we
    could shut down all the power plants, we could stop all of our
    production that emits any CO2. The impact in the world is quite
    insignificant, negligible, de minimis. Two percent is not going
    to have an impact, not given what we are doing. So that is part
    of the issue, and I say the frustration on our side is the need
    for jobs, the growing economy, and then having the EPA
    overreach for something that is not needed. Again, a solution
    that is looking for a problem; a problem that does not exist,
    certainly not that we could have an impact on.
        So it was just interesting. I believe you admitted there is
    a trust factor between the EPA and Congress, clearly. There is
    a trust factor between our farmers. And I always have a saying,
    do not bring me a problem without a solution. The EPA has a
    real problem. Congress does not trust you. Farmers do not trust
    you. The public does not trust you. So what is the solution? Do
    not bring me a problem without a solution. It is a simple
    solution. Withdraw the rule. Start over. Understand what you
    have done wrong. Reach out. Study the small business. Do the
    RFA. That would mean so much to I think this Congress and the
    country for the EPA to say we were wrong. We got ahead of
    ourselves. We admit that there is misunderstanding. We are
    going to withdraw the rule, take all this into account. And
    since there is no judicial deadline, we will move forward on
    another day. We screwed up. Do you know what that would do for
    your trust factor in Congress? It would take you a long way.
        So all I would say, I know you are leaving, but for my two
    cents worth, if you could convince your superiors to withdraw
    this rule, your credibility would skyrocket in the EPA, and I
    would suggest you seriously consider it.
        I yield back.
        Chairman GRAVES. Mr. Schweikert?
        Mr. SCHWEIKERT. Thank you, Mr. Chairman.
        Deputy Administrator Perciasepe, sort of a continuation on
    a bit of the thought exercise here. Significant nexus.
    Ultimately, I believe in your testimony, the discussion was
    this rewrite, this update of waters of the U.S. has been driven
    because of multiple Supreme Court rulings?
        Mr. PERCIASEPE. Right. Keep in mind it is a definitional
    rule, so it is defining something. We had it defined in the
    1980s and the 1970s in a very broad way. The Supreme Court has
    several times said you cannot use that approach. You need to
    come up with a different approach.
        Mr. SCHWEIKERT. And some of the significant nexus language
    actually came out of the Supreme Court language?
        Mr. PERCIASEPE. That is right.
        Mr. SCHWEIKERT. I am going to ask you actually for a
    personal opinion, and I know this is a little awkward, instead
    of your hat as the deputy administrator, but you are leaving in
    three weeks so you are allowed to have a personal opinion.
        Mr. PERCIASEPE. I am a citizen of the United States.
        Mr. SCHWEIKERT. Over the next decade, your personal
    opinion, how much litigation is ultimately going to take place
    in defining significant nexus? Because the regional
    differentiation of that is incredible if you think about our
    lives out in the desert southwest compared to other parts of
    the country.
        So where I am heading on this is your personal opinion, how
    much litigation are we going to look at in just, once again, if
    this rule goes into effect as written, in fixing these
    definitions or tightening them up or politicizing them or
    moving, what do we expect to see?
        Mr. PERCIASEPE. You know, maybe it is sort of--and also a
    little bit towards Mr. Collins's--who just had to leave--
    answer, I can tell you that Gina McCarthy and Bob Perciasepe,
    as long as I am here, but certainly my immediate supervisor or
    boss, Gina McCarthy, want nothing more than to build
    credibility and confidence in the Congress.
        So from a personal perspective, we would hope that we would
    be able to get out of the situation we have been in for 40
    years with everything keeping going to the Supreme Court and
    try to get that to stop. And at some point, you know, I do not
    see--if we do nothing it will continue to keep going up there
    and they will continue to keep----
        Mr. SCHWEIKERT. But if you also do this, I mean, in many
    ways the term ``significant nexus'' is a new term of art, and
    now we have to define it.
        Mr. PERCIASEPE. Right.
        Mr. SCHWEIKERT. And is a significant nexus different in
    Oregon compared to the desert southwest? Is it different----
        Mr. PERCIASEPE. Yes.
        Mr. SCHWEIKERT.--you know building that box. And where you
    are hearing a lot of stress in our voices is for places like
    Maricopa County, Arizona, you know, one of the third, fourth
    most populous county in the country, we recycle every drop of
    our water. Every drop of it. We think we do some of this
    really, really well. Is there going to be litigation that is
    being driven on another, you know, how water--the significant
    nexus of water in Delaware and all of a sudden we find out that
    the way we operate in our region, we are back in court having
    to redefine for a definition that works for us.
        In my minute and a half I have left, you actually just
    touched on something. You have heard the credibility
    discussion, distrust discussion. Could you share with
    Administrator McCarthy two things from me if you have the
    chance? One is stop giving speeches where you vilify us, where
    in your language you say you are going to go after those of us
    who have questions, that only real scientists are worthy. And
    those are quotes from articles. You did not say them but the
    administrator did.
        And the second part of that is transparency. It is not good
    enough to tell us what your study says. We need the data sets.
    It is unacceptable to have proprietary data saying, well, we
    hired a contractor to do it. If you are going to make public
    policy, public policy needs to be done by public data. The
    public deserves the right--right, left, activists, researcher--
    to see the base data sets and model it. Because I think
    actually some of the distrust comes from the inability to see
    that baseline data and know you could stress it and reproduce
    it.
        So that is more of an editorial comment, but I actually
    think it would take us a long ways to openness, transparency,
    and rehabilitating the relationships between the agency and the
    public.
        Thank you, Mr. Chairman.
        Chairman GRAVES. Thank you, Mr. Perciasepe, for coming in.
    And I might suggest, because you have said on several occasions
    today, you know, you are seeking input. You want to, and we
    have been talking about credibility and transparency and you
    want to hear from the business community. I would suggest that
    you comply with the RFA. And why not do it voluntarily? Why not
    go through the steps that are laid out? And help your
    credibility out considerably and do it through the process,
    because that is really what this hearing is about--is why the
    EPA does not follow the Regulatory Flexibility Act, which is
    what this Committee is all about. And it does require all
    agencies, the EPA included, to conduct outreach and assess the
    impacts of rules on small businesses. And hearing from those
    small businesses early in the rulemaking process is going to
    identify these problems that come up, and hopefully, as has
    been pointed out, produce better solutions and better rules.
    But unfortunately, EPA is not complying with the RFA. And the
    result, it is confusing. It ends up badly crafted regulations
    and you get into situations like you are in. But the Committee
    is going to continue to engage with the EPA to make sure it
    fully complies with the EPA or with the Regulatory Flexibility
    Act.
        And with that, I would ask unanimous consent that all
    members have five legislative days to submit statements and
    supporting materials for the record.
        With that, without objection, that is so ordered.
        And with that, the hearing is adjourned. Thank you.
        [Whereupon, at 2:34 p.m., the Committee was adjourned.]
                                A P P E N D I X

                      Testimony of Bob Perciasepe

                          Deputy Administrator

                  U.S. Environmental Protection Agency

    Hearing on EPA Actions Under the Climate Action Plan and Waters
                              of the U.S.

                      Committee on Small Business

                     U.S. House of Representatives

                             July 30, 2014

        Chairman Graves, Ranking Member Velaazquez, members of the
    committee: thank you for the opportunity to testify today on
    EPA's actions under the President's Climate Action Plan, and on
    EPA and the U.S. Army Corps of Engineers' recently proposed
    rule which would clarify the jurisdictional scope of the Clean
    Water Act (CWA), simplifying and improving the process for
    determining waters that are, and are not, covered by the Act.

        EPA Actions Under the President's Climate Action Plan

        Climate change is one of the greatest challenges of our
    time. It already threatens human health and welfare and
    economic well-being, and if left unchecked, it will have
    devastating impacts on the United States and the planet.

        The science is clear. The risks are clear. And the high
    costs of climate inaction are clear. We must act. That's why
    President Obama laid out a Climate Action Plan in June 2013 in
    which he directed EPA and other federal agencies to take
    meaningful steps to mitigate the current and future damage
    caused by carbon dioxide emissions and to prepare for the
    anticipated climate changes that have already been set in
    motion. The Plan has three key pillars; cutting carbon
    pollution in America; preparing the country for the impacts of
    climate change; and leading international efforts to combat
    global climate change.\1\
    ---------------------------------------------------------------------------
        \1\ More information on the Climate Action Plan at: http://
    www.whitehouse.gov/sites/default/files/image/
    president27sclimateactionplan.pdf. While EPA is involved in many of the
    Plan's efforts, including those addressing emissions of methane,
    hydrofluorocarbons (HFCs), and other short-lived climate pollutants,
    this testimony will focus on the efforts to reduce carbon pollution
    from new and existing power plants.

        EPA plays a critical role in implementing the Plan's first
    pillar, cutting carbon pollution. Over the past our years, EPA
    has begun to address this task under the Clean Air Act. Our
    first steps addressed motor vehicles and, working with the
    National Highway Traffic Safety Administration, resulted in
    greenhouse gas and fuel economy standards for Model Year 2012
    to 2025 light-duty vehicles, and standards for model year 2014
    ---------------------------------------------------------------------------
    through 2018 heavy duty trucks and buses.

        Building on this success, the President asked EPA to work
    with states, utilities and other key stakeholders to develop
    plans to reduce carbon pollution from future and existing power
    plants.

        Power plants are the largest source of carbon dioxide
    emissions in the United States, accounting for roughly one-
    third of all domestic greenhouse gas emissions. While the
    United States has limits in place for the level of arsenic,
    mercury, sulfur dioxide, nitrogen oxides, and particle
    pollution that power plants can emit, there are currently no
    national limits on carbon pollution levels.

        In September 2013, the EPA announced its proposed standards
    for new natural gas-fired turbines and new coal-fired units.
    The standards reflect the demonstrated performance of
    efficient, lower carbon technologies that are currently being
    used today. They set the stage for continued public and private
    investment in technologies like efficient natural gas and
    carbon capture and storage. The proposal was published in the
    Federal Register on January 8, 2014, and the formal public
    comment period closed on May 9, 2014. We have received more
    than two million comments on this proposal and will carefully
    consider them as we develop a final rule.

        On June 2, 2014, EPA issued its proposed Clean Power Plan
    for existing plants. The plan is built on advice and
    information from states, cities, businesses, utilities, and
    thousands of people about the actions they are already taking
    to reduce carbon dioxide emissions. It aims to cut energy waste
    and leverage cleaner energy sources by doing two things: First,
    it uses a national framework to set achievable state-specific
    goals to cut carbon pollution per megawatt hour of electricity
    generated. And second, it empowers the states to chart their
    own, customized path to meet their goals.

        The EPA's stakeholder outreach and public engagement in
    preparation for this rulemaking was unprecedented. Starting
    last summer, we held eleven public listening sessions around
    the country. We participated in hundreds of meetings with a
    broad range of stakeholders, including small entity interests
    such as municipal and rural electric cooperatives, across the
    country, and talked with every state.

        Now, the second phase of our public engagement has begun.
    We've already had dozens of calls and meetings with states and
    other stakeholders. The more formal public process--both a
    public comment period that runs through October 16, 2014, and
    public hearings this week in Atlanta, Denver, Pittsburgh, and
    Washington, DC--will provide further opportunity for
    stakeholders and the general public to provide input.

        There has been tremendous public interest in the proposal:
    already, we have received nearly 300,000 written comments on
    the proposal. At the public hearings this week, we anticipate
    hearing oral comments from about 1,600 people, many of whom
    represent small businesses.

        In drafting the power plant proposals, we have been mindful
    of its effects on small businesses and careful to ensure we are
    complying with SBREFA and all applicable requirements. Outreach
    and public comment are an important component of our rulemaking
    process, and we have often designed our rules to ensure that
    they do not impose an undue burden on small entities.

        Waters of the U.S. Proposed Rule

        The foundation of the agencies' rulemaking efforts to
    clarify protection under the CWA is the goal of providing clean
    and safe water to all Americans. Clean water is vital to every
    single American--from families who rely on affordable, safe,
    clean waters for their public drinking water supply, and on
    safe places to swim and healthy fish to eat, to farmers who
    need abundant and reliable sources of water to grow their
    crops, to hunters and anglers who depend on healthy waters for
    recreation and their work, to businesses that need a steady
    supply of clean water to make their products. The range of
    local and large-scale businesses that we depend on--and who, in
    turn, depend on a reliable supply of clean water--include
    tourism, health care, farming, fishing, food and beverage
    production, manufacturing, transportation and energy
    generation. Approximately 117 million people--one in three
    Americans--get their drinking water from public systems that
    rely on seasonal, rain-dependent, and headwater streams--the
    very waters this rule would ensure are protected from
    pollution.\2\
    ---------------------------------------------------------------------------
        \2\ A county-level map depicting the percent of the population
    receiving drinking water directly or indirectly from stream that are
    seasonal, rain-dependent or headwaters is available at http://
    water.epa.gov/type/rsl/drinkingwatermap.cfm.

        In recent years, several Supreme Court decisions have
    raised complex questions regarding the geographic scope of the
    Act. For nearly a decade, members of Congress, state and local
    officials, industry, agriculture, environmental groups, and the
    public have asked our agencies for a rulemaking to provide
    clarity. This complexity has made enforcement of the law
    difficult in many cases, and has increased the amount of time
    it takes to make jurisdictional determinations under the CWA.
    In response to these implementation challenges and significant
    stakeholder requests for rulemaking, the agencies developed the
    ---------------------------------------------------------------------------
    proposed rule.

        We believe the result of this rulemaking will be to improve
    the process for making jurisdictional determinations for the
    CWA by minimizing delays and costs and to improve
    predictability and consistency for landowners.

        The agencies' proposed rule helps to protect the nation's
    waters, consistent with the law and currently available
    scientific and technical expertise. The rule provides
    continuity with the existing regulations, where possible, which
    will reduce confusion and will reduce transaction costs for the
    regulated community and the agencies. Toward that same end, the
    agencies also proposed, where consistent with the law and their
    scientific and technical expertise, categories of waters that
    are and are not jurisdictional, as well as categories of waters
    and wetlands that require a case-specific evaluation to
    determine whether they are protected by the CWA.

        The agencies' proposed rule continues to reflect the
    states' primary and exclusive authority over water allocation
    and water rights administration, as well as state and federal
    co-regulation of water quality. The agencies worked hard to
    ensure that the proposed rule reflects these fundamental CWA
    principles, which we share with our state partners.

        For the past several years, the EPA and the Corps have
    listened to input from the agriculture community while
    developing the proposed rule. Using the input from those
    discussions, the EPA and the Corps then worked with the USDA to
    ensure that concerns raised by farmers and the agricultural
    industry were addressed in the proposed rule. The proposed rule
    does not change, in any way, existing CWA exemptions from
    permitting for discharges of dredged and/or fill material into
    waters of the U.S. associated with agriculture, ranching, and
    forestry activities.

        I want to emphasize that farmers, ranchers, and foresters
    who are conducting these activities covered by the exemptions
    (activities such as plowing, tilling, planting, harvesting,
    building and maintaining roads, ponds and ditches, and many
    other activities in waters on their lands), can continue these
    practices after the new rule without the need for approval from
    the Federal government.

        The scope of the term ``waters of the U.S.'' has generated
    substantial interest within the small business community. In
    light of this interest, the EPA determined to seek early and
    wide input from representatives of small entities while
    formulating a proposed definition of this term that reflects
    the intent of Congress consistent with the mandate of the
    Supreme Court's decisions. This input was sought voluntarily,
    as it was certified in the preamble to the proposed rule that
    the proposed rule will not have a significant economic impact
    on a substantial number of small entities, as defined by the
    Regulatory Flexibility Act (RFA).\3\
    ---------------------------------------------------------------------------
        \3\ Because fewer waters will be subject to the CWA under the
    proposed rule than are subject to regulation under the existing
    regulations, this action will not affect small entities to a greater
    degree than the existing regulations. As a consequence, this action if
    promulgated will not have a significant adverse economic impact on a
    substantial number of small entities, and therefore no regulatory
    flexibility analysis is required. Additional background regarding the
    agencies' compliance with the RFA is available in the preamble to the
    proposed rule. See 79 FR 22220.

        The small entities outreach process has enabled the
    agencies to hear directly from small business representatives,
    at a very preliminary stage, about how this complex issue
    should be approached. EPA has also prepared a report
    summarizing the small entity outreach to date, the results of
    this outreach, and how these results have informed the
    development of this proposed rule.\4\ Since publishing the
    proposed rule, the agencies have met many times with small
    businesses and other entities to hear their perspectives on the
    proposed rule and to identify potential opportunities for
    further clarifying CWA jurisdiction in a final rule. Most
    recently, the agencies participated in an SBA-sponsored
    roundtable on July 21st. We look forward to continuing these
    efforts both during the remainder of the public comment period
    and as we write a final rule.
    ---------------------------------------------------------------------------
        \4\ This report is available in the docket for the proposed rule at
    http://www.regulations.gov/#!documentDetail;D=EPA-HQ-OW-2011-0880-1927.

        The agencies published the proposed rule in the Federal
    Register on April 21, and the public comment period on the
    proposed rule will be open for 182 days, closing on October 20.
    During this period, the agencies have launched a robust
    outreach effort, holding discussions around the country and
    gathering input from states, local governments, small
    businesses, and other stakeholders needed to share a final
    rule. We welcome comments from all stakeholders on the
    agencies' proposed rule. At the conclusion of the rulemaking
    process, the agencies will review the entirety of the completed
    administrative record, including public comments and the EPA's
    final science synthesis report, as we work to develop a final
    ---------------------------------------------------------------------------
    rule.

        Thank you again, and I will be happy to answer your
    questions.
    [GRAPHIC] [TIFF OMITTED] T8925.001

                            Questions for the Record

                          Committee on Small Business

      Hearing: ``Regulatory Overreach: Is EPA Meeting Its Small Business
                                 Obligations?''

                                 July 30, 2014

                                Chairman Graves

        1. The Regulatory Flexibility Act, 5 U.S.C. Sec. Sec. 601-
    12 (RFA), requires the EPA to make a threshold determination
    whether a proposed rule is likely to have a ``significant
    economic impact on a substantial number of small entities.''
    EPA refers to this threshold analysis as ``screening analysis''
    in its own RFA compliance guide.\1\ The screening analysis
    informs EPA whether or not it has enough information to be able
    to certify that a rule does not require it to conduct an
    initial regulatory flexibility analysis.
    ---------------------------------------------------------------------------
        \1\ ENVIRONMENTAL PROTECTION AGENCY, FINAL GUIDANCE FOR EPA
    RULEWRITERS: REGULATORY FLEXIBILITY ACT 9-30 (2006) [hereinafter EPA
    RFA Guidance], available at http://www.epa.gov/sbrefa/documents/
    GuidanceRegFlexAct.pdf.

        a. Did the EPA conduct ``screening analysis'' for the
    proposed rule that would set separate CO2 emission standards
    for new power plants?\2\ If so, please provide the screening
    analysis to the Committee.
    ---------------------------------------------------------------------------
        \2\ Standards of Performance for Greenhouse Gas Emissions From New
    Stationary Sources: Electric Utility Generating Units, 79 Fed. Reg.
    1430 (Jan. 8, 2014).

        Response: The Regulatory Flexibility Act (RFA) generally
    requires an agency to prepare a regulatory flexibility analysis
    of any rule subject to notice and comment rulemaking
    requirements under the Administrative Procedure Act or any
    other statute unless the agency certifies that the rule will
    not have a significant economic impact on a substantial number
    of small entities. Small entities include small businesses,
    ---------------------------------------------------------------------------
    small organizations, and small governmental jurisdictions.

        After considering the economic impacts of the proposed
    Carbon Pollution Guidelines for New Power Plants on small
    entities, the Administrator certified that this action will not
    have a significant economic impact on a substantial number of
    small entities.

        We did not include an analysis of the illustrative impacts
    on small entities that may result from implementation of this
    proposed rule because we do not anticipate any compliance costs
    over a range of likely sensitivity conditions as a result of
    this proposal. EPA typically uses a comparison of costs as a
    percentage of sales or a ``cost-to-sales ratio'' as the metric
    to determine whether a small entity is significantly impacts by
    a proposed regulation. For the proposed Carbon Pollution
    Guidelines, the cost-to-sales ratio for all affected small
    entities would be zero, indicating no impact. The EPA believes
    that electric power companies will choose to build new EGUs
    that comply with the regulatory requirements of this proposal
    because of existing and expected market conditions. (See the
    RIA at http://www.regulations.gov/#!documentDetail;D=EPA-HQ-
    OAR-2013-0495-0023 for further discussion of sensitivities).
    The EPA does not project any new coal-fired EGUs without CCS to
    be built. Accordingly, there are no anticipated economic
    impacts as a result of this proposal.

        b. Did the EPA conduct ``screening analysis'' for the
    proposed rule that would revise the definition of ``waters of
    the United States'' for all sections of the Clean Water Act?''
    \3\ If so, please provide the screening analysis to the
    Committee.
    ---------------------------------------------------------------------------
        \3\ Definition of ``Waters of the United States'' Under the Clean
    Water Act, 79 Fed. Reg. 22,188 (Apr. 21, 2014).

        Response: The Regulatory Flexibility Act generally requires
    an agency to prepare a regulatory flexibility analysis for any
    rule subject to notice-and-comment rulemaking requirements
    under the Administrative Procedure Act or any other statute
    unless the agency certifies that the rule will not have a
    significant economic impact on a substantial number of small
    entities. As part of their ``Waters of the U.S.'' rulemaking,
    the EPA certified that the proposed rule will not have a
    significant economic impact on a substantial number of small
    ---------------------------------------------------------------------------
    entities.

        Under the RFA, the impacts of concern are significant,
    disproportionate adverse economic impacts on small entities
    subject to the rule, because the primary purpose of the initial
    regulatory flexibility analysis is to identify and address
    regulatory alternatives ``which minimize any significant
    economic impact of the rule on small entities.'' 5 U.S.C. 603.
    The scope of regulatory jurisdiction in this proposed rule is
    narrower than that under the agencies' existing regulations.
    Because fewer waters will be subject to the CWA under the
    proposed rule than are subject to regulation under the existing
    regulations, this action will not adversely affect small
    entities to a greater degree than the existing regulations. The
    agencies' proposed rule is not designed to ``subject'' any
    entities of any size to any specific regulatory burden. Rather,
    it is designed to clarify the statutory scope of the ``waters
    of the United States,'' consistent with Supreme Court
    precedent. This action if promulgated will not have a
    significant adverse economic impact on a substantial number of
    small entities, and therefore no regulatory flexibility
    analysis is required.

        2. In the ``Waters of the United States'' proposed rule,
    the EPA certified the rule as one that will not have a
    ``significant economic impact on a substantial number of small
    entities'' under the RFA. In the RFA certification, the agency
    compared the proposed rule to the existing regulation. However,
    in the Economic Analysis, the EPA and Corps compared the
    proposed rule to the agencies' 2009-2010 field practices that
    were based on the 2008 guidance.\4\ Why did the agencies use
    two different baselines to assess the costs of the regulation?
    ---------------------------------------------------------------------------
        \4\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, ECONOMIC
    ANALYSIS OF PROPOSED REVISED DEFINITION OF WATERS OF THE UNITED STATES
    2 (2014).

        Response: The appropriate legal comparison for the proposed
    rule is the existing regulatory language. The scope of
    regulatory jurisdiction in this proposed rule is narrower than
    the agencies' existing regulations. Because fewer waters will
    be subject to the CWA under the proposed rule than are subject
    to regulation under the existing regulations, this action will
    not adversely affect small entities to a greater degree than
    the existing regulations. The agencies' proposed rule is not
    designed to ``subject'' any entities of any size to any
    specific regulatory burden. Rather, it is designed to clarify
    the statutory scope of the ``waters of the United States,''
    ---------------------------------------------------------------------------
    consistent with Supreme Court precedent.

        As a practical matter, however, the agencies recognize that
    implementing this rule will result in changes when compared to
    current field practice, and this comparison can be useful in
    informing policy decisions. As such, the draft economic
    analysis quantifies the potential costs and benefits that could
    result from the implementation of the proposed rule which would
    result in new protected waters as compared to current guidance
    and practice. The draft economic analysis will be updated and
    published along with the final rule using the Corps 2013 and
    2014 field data from the Section 404 program. The final
    economic analysis will reflect the way in which the final rule
    will be applied.

        3. At the July 30, 2014 hearing, Deputy Administrator
    Perciasepe stated the vast majority of road ditches would not
    be jurisdictional under the ``Waters of the United States''
    proposed rule. How many ditches has EPA or the Corps surveyed
    or assessed to support this assertion? Does the EPA or the
    Corps have any data that supports this assertion? If so, please
    provide that data to the Committee.

        Response: Deputy Administrator Perciasepe's statement at
    the July 30 hearing referred to the fact that the proposed rule
    would exclude ditches from Clean Water Act jurisdiction that
    are excavated wholly in uplands, drain only uplands, and have
    less than perennial flow. Those roadside ditches that are
    excavated in uplands and have the primary purpose to drain
    runoff from roads, such that they drain only uplands, would not
    be jurisdictional under the proposed rule if they have less
    than perennial flow. The ditch exclusion applies to all ditches
    that fit the exclusion language, including many roadside and
    agricultural ditches. The agencies believe the proposed rule
    actually reduces regulation of ditches compared to the 2008
    Army/EPA Jurisdiction Guidance that is currently in effect,
    which allows for the regulation of both intermittent and
    perennial flow ditches).

        4. The EPA has issued statements, blog posts, tweets,
    articles, and other documents about the ``Waters of the United
    States'' proposed rule. Can small business owners and small
    governmental jurisdictions rely on statements in those EPA
    documents as a defense to a CWA enforcement action or lawsuit?

        Response: At this time, jurisdictional determinations are
    being made under existing Corps and EPA regulations and
    guidance, and applicable case law not under the proposed rule.
    To help inform the public regarding the proposed rule, the EPA
    has also taken steps to translate the legal language and
    scientific principles of the proposed rule into easier-to-
    understand communications documents. This is the case for any
    major regulatory action taken by the EPA or any other federal
    agency. Such documents help explain the proposed rule to the
    regulated public but do not substitute for it. The agencies
    would suggest that the small business owner or small
    governmental jurisdiction contact their local EPA or Corps
    office for specific questions about Clean Water Act
    jurisdiction.

        5. EPA contends the ``Waters of the United States''
    proposed rule provides greater clarity and certainty and will
    not result in a significant expansion of CWA jurisdiction. If
    that's the case, will EPA agree to publish jurisdictional maps
    similar to the current National Wetlands Inventory maps showing
    what water bodies would and would not be jurisdictional under
    the proposed rule before publishing the final rule?

        Response: The agencies' proposed rule does not include a
    specific delineation and determination of waters across the
    country that would be jurisdictional under the proposed rule.
    Consistent with the more than 40-year practice under the Clean
    Water Act, the agencies make determinations regarding the
    jurisdictional status of particular waters almost exclusively
    in response to a request from a potential permit applicant or
    landowner asking the agencies to make such a determination.,
    The agencies are currently considering a number of options for
    the treatment of ``other waters'' under the final rule. Once
    the rule is finalized, the agencies will work to develop
    outreach materials for the public to make it as clear as
    possible which waters are jurisdictional and which are not.
    Depending on the option(s) selected for the final rule, the
    agencies may consider including maps as part of these materials
    if they determine that these will increase clarity for the
    public.

        Within the existing framework, the agencies' proposed rule
    would provide clearer categories of waters that would be
    jurisdictional, as well as a clearer list of the waters and
    features that are not jurisdictional. The agencies' proposed
    rule would not protect any new types of waters that have not
    historically been covered under the Clean Water Act and is
    consistent with the Supreme Court's more narrow reading of
    Clean Water Act jurisdiction. Providing a clearer regulatory
    definition will streamline the process of making jurisdictional
    determination and provide additional clarity and predictability
    to this process.

        6. The RFA requires EPA to assess the impacts of its rules
    on small governmental jurisdictions, which are those with a
    population of 50,000 or less. EPA previously estimated that
    there are 40,000 small governmental jurisdictions in the United
    States.\5\ What steps did the EPA take to specifically consider
    the burdens that the ``Waters of the United States'' rule will
    impose on these small entities?
    ---------------------------------------------------------------------------
        \5\ EPA RFA Guidance, supra note 1, at 46-7.

        Response: The Regulatory Flexibility Act generally requires
    an agency to prepare a regulatory flexibility analysis for any
    rule subject to notice-and-comment rulemaking requirements
    under the Administrative Procedure Act or any other statute
    unless the agency certifies that the rule will not have a
    significant economic impact on a substantial number of small
    entities. As part of their ``Waters of the U.S.'' rulemaking,
    the EPA certified that their proposed rule will not have a
    significant economic impact on a substantial number of small
    ---------------------------------------------------------------------------
    entities.

        At the same time, the agencies recognize the substantial
    interest in this issue by small governmental jurisdictions and
    other small-entity stakeholders. In light of this interest, the
    EPA and the Corps determined to seek early and wide input from
    representatives of small entities while formulating a proposed
    rule. This process has enabled the agencies to hear directly
    from these representatives, at an early stage, about how they
    should approach this complex question of statutory
    interpretation, together with related issues that such
    representatives of small entities may identify for possible
    consideration in separate proceedings. The EPA has also
    prepared a report summarizing their small entity outreach to
    date, the results of this outreach, and how these results have
    informed the development of this proposed rule. This report is
    publicly available in the docket for this proposed rule.
    Finally, on October 15, 2014, the agencies hosted a second
    roundtable to facilitate input from small entities, which
    included participants from two small government jurisdictions.
    A summary of this roundtable is also available in the docket
    for the proposed rule.

        Congressman Mick Mulvaney (SC-5)
        Congressman Tom Rice (SC-07)
        Congressman Scott Tipton (CO-03)

        1. I am concerned that the EPA's Lead Renovation, Repair,
    and Painting (LRRP) Rule could impose regulatory costs that are
    so high they would offset any financial benefit of energy-
    efficiency projects. This would discourage renovations and
    upgrades that are otherwise within the EPA's priorities of
    lowering power consumption, reducing greenhouse gas emissions,
    and creating green jobs. Current market estimates say the rule
    has increased the cost of a project upwards of 30 percent. In
    developing the LRRP rules, has the EPA considered the negative
    potential impacts on our other national environmental
    priorities? If so, what were those considerations and
    conclusions?

        Response: EPA aimed to keep costs reasonable in developing
    its requirements for lead-safe work practices. In fact, EPA
    heard from industry that many of the practices were already in
    use by some contractors even before the rule as promulgated,
    because lead-safe work practices also have ancillary benefits
    of reducing overall dust during and after a job. In most
    general terms, the costs to comply with the lead-safe work
    practices required by a rule depend on the size of the job; on
    average, the costs can be up to a couple hundred dollars. For
    contractors who were already using some of the lead-safe work
    practices, however, the incremental cost would be lower.
    Overall, the benefits of the LRRP rule and amendments, in terms
    of avoided health, medical, and educational costs, are expected
    to significantly outweigh the cost of improved work practices.

        During the development of amendments to the LRRP rule, EPA
    considered how complying with the rule could potentially affect
    the federal government's Weatherization Assistance Program
    (WAP) and the Home Star program, both of which were aimed at
    improving energy efficiency in homes (i.e., whether there would
    be enough trained and certified renovators to do the work in
    the WAP and Home Star programs). EPA concluded the capacity in
    2010 would be sufficient. As recently as June 2014, there were
    566 training providers accredited for LRRP (including 361
    traveling trainers) and 115,370 certified firms (137,256 firms
    including those approved by authorized states), and more than
    510,000 individuals have been trained as Certified Renovators.

        2. Based on previous fines for violations of the LRRP Rule,
    it seems that the EPA relies on retroactive record examination
    to audit compliance rather than site visits. This puts a
    heavier burden on properly filling out paperwork than actually
    following the LRRP rules. And, it applies an additional burden
    upon contractors that utilize subcontractors for elements of a
    job that may be under the LRRP rule. Has the EPA considered
    more accurate means of ensuring LRRP compliance? If so, what?
    If not, why not? Is the EPA more concerned with issuing fines
    or ensuring safety compliance?

        Response: The recordkeeping checklist for the Lead
    Renovation, Repair and Painting (LRRP) Rule is very
    straightforward and easy to complete. When the EPA discovers a
    firm is in violation of the LRRP Rule we may also review that
    firm's records to determine if there is a pattern of non-
    compliance or if the violations we discovered are limited to
    that inspection. General contractors who use subcontractors are
    not required to fill out or keep the records of the
    subcontractors, but must be able to provide those records from
    the subcontractors if requested. The EPA has found the record
    review process to be an effective means of determining the
    overall compliance status of contractors conducting renovations
    subject to the LRRP Rule. The EPA's first concern is ensuring
    compliance with the work practice safety standards of the LRRP
    Rule to protect the health of the occupants, especially the
    young children, of the houses or child occupied facilities
    undergoing renovation.

        Congressman Mick Mulvaney (SC-5)

        1. This past January, Congress restored funding for the
    Centers for Disease Control and Prevention's (CDC) Childhood
    Lead Poisoning Prevention Program. Does the EPA consult with
    the CDC on results of the agency's lead paint monitoring? If
    not, why not? If so, are we seeing a measurable decline in lead
    paint health issues for children?

        Response: Over the years, EPA and the Centers for Disease
    Control and Prevention (CDC) have partnered on various lead
    initiatives. For example, CDC participates as an active member
    on the HUD and EPA-chaired Federal Lead-Based Paint Task Force
    and EPA served an en ex officio member of CDC's former Federal
    Advisory Committee on Childhood Lead Poisoning. Additionally,
    the EPA and CDC continuously work together on outreach efforts
    such as National Lead Poisoning Prevention Week and activities
    related to the Global Alliance to Eliminate Lead Paint.

        Regarding monitoring, as described in EPA's Air Quality
    Criteria for Lead document (2006) there are many sources that
    contribute to lead exposure, thus any measure of blood lead
    will reflect all sources of lead exposure. EPA is unaware of
    any national data set that directly measures only the
    reductions of those lead hazards in homes caused by lead-based
    paint. The best currently available data set for assessing
    population level blood lead statistics is the CDC's National
    Health and Nutrition and Examination Survey (NHANES).

        Based on the NHANES 2014 data (sampling period 2009-2012),
    2.1%, or an estimated 535,000 children, have BLLs greater than
    or equal to 5 micrograms per deciliter ( g/dL), levels known to
    put their academic and later life success at risk. This
    demonstrates a decrease from previous years (sampling period
    2005-2008 at 3.0%, sampling period 2003-2006 at 4.1%). While
    overall decreasing BLLs are favorable, CDC's blood lead
    surveillance data, collected from state and local health
    departments, continues to identify a disproportionate share of
    cases in low income and minority communities. There is no known
    safe blood lead level for children, CDC, EPA and other federal
    partners continue to work together to control or eliminate lead
    hazards before children are exposed.

        2. From June 4, 2014 through July 21, 2014, there were less
    than 20 companies nationwide who were listed on the EPA
    enforcement website at being cited for violating the Lead
    Renovation, Repair and Painting Rule. It is my understanding
    that EPA, itself, has shared its concern over its enforcement
    plan, most notably its inability to identify contractors
    operating without certification, registration or ethical
    standards. How is the agency currently targeting those
    contractors who are either in violation of EPA rules or
    contractors who never received certification in the first
    place?

        Response: The EPA is most concerned about renovation
    contractors who are not following the work practice safety
    standards. Certified firms have also been found to be out of
    compliance with the work practice safety standards of the Lead
    Renovation, Repair and Painting (LRRP) Rule. The EPA often
    receives tips or complaints from home owners, renters or
    neighbors about renovation work practices which are not
    containing dust and debris. This information can lead to
    inspections of worksites or records inspections depending on
    the quality and timeliness of the information provided. The EPA
    may also work with local health and building permit and
    inspection departments to identify ongoing or projected
    renovation projects in housing built before 1978 and may
    conduct joint inspections of those worksites. The EPA is
    currently analyzing other methods to more effectively identify
    and prioritize potential non-compliance in areas with the
    highest level of ``at-risk'' populations, (i.e. children under
    six).

        3. The EPA's Greenhouse gas rule will have significant
    impacts on businesses and consumers in my state, particularly
    manufacturing. If this rule is not implemented properly,
    electricity rates could climb by as much as 50 percent. The EPA
    has gone to great lengths to talk about how states have an
    abundance of choices in the proposed rule. But, the rule
    discriminates against South Carolina and other states that have
    made proactive investments in new nuclear production. South
    Carolina utilities and ratepayers have spent billions of
    dollars to build the new reactors at the VC Summer plant- two
    reactors that will deliver 1100 megawatts of carbon-free
    electricity to South Carolina when they are completed in 2017
    and 2018.

        However, after reviewing this rule, I have learned that
    South Carolina will get no credit for this carbon reduction.
    The rule assumes that these plants are already online. Yet if
    these plants were win, or solar, they would get credit under
    the rule. Isn't a metric ton of carbon avoided a metric ton of
    carbon avoided, regardless of where it comes from? Why isn't
    all carbon-free generation treated the same? Is this something
    the EPA intends to change before it issues the final rule?

        Response: The EPA is conducting unprecedented outreach
    about this proposal and encouraging robust public comment and
    participation in the formulation of the final Clean Power Plan.
    We are hearing substantial input on the treatment of new
    nuclear in goal setting and will consider those comments
    carefully as we work toward a final rule. The comment period on
    the proposal is open through December 1, 2014.

        Under the Clean Power Plan, the EPA sets the goals and
    states get to decide how to meet the goals. States can use the
    under construction nuclear units in their compliance plans to
    meet the goal. To set the goals in the proposal, the EPA
    considered nuclear units that currently have permits for
    construction and operation. The proposal assumes a 90% capacity
    factor in generation for the new nuclear units. However, it
    will be up to states to decide how and to what extent to rely
    on these units in their plans. For example, if the under
    construction units perform better than a 90% capacity factor,
    these units could help states get even closer to their goals.

        Congressman Scott Tipton (CO-03)

        1. I continue to hear from constituents who have serious
    concerns over regulations already imposed upon them by the EPA.
    Specifically, I hear from small business remodelers about the
    EPA's Residential Home's Lead Renovation, Repair and Painting
    (LRRP) rule that became effective April 2010. In July 2010, the
    EPA eliminated the opt-out, which doubled the number of homes
    affected by the rule. This action increased first-year
    compliance costs from $800 million to $1.3 billion and affected
    approximately 7.2 million renovation events per year.

        Training and certification requirements for contractors and
    employees performing renovation, repair and painting work on
    residences built prior to Jan. 1, 1978 apply to painters,
    plumbers, contractors, window and door installers, electricians
    and similar specialists. Estimated costs to obtain
    certification for a remodeling company are at least $300.
    Initial courses for certified renovators are $300-$500. In
    addition, the employer is required to pay that employee for the
    day.
        We all want children and families to be safe in their
    homes. However, if we impose a rule on business, we should at
    least make sure the cost and burden of compliance is worth the
    benefit. This past January, in a bipartisan effort, Congress
    restored funding for the Centers for Disease Control and
    Prevention's (CDC) Childhood Lead Poisoning Prevention Program.
    The 2014 Consolidated Appropriations Act included $15 million
    for the CDC program. Does the EPA regularly consult with the
    CDC on results of the agency's lead paint monitoring? If not,
    why not? And if it does, are we seeing a measurable decline in
    lead paint health issues for children? What percentage of
    childhood lead paint health issues have decreased since the
    2010 rule was put in place?

        Response: Over the years, EPA and the Centers for Disease
    Control and Prevention (CDC) have partnered on various lead
    initiatives. For example, CDC participates as an active member
    on the HUD and EPA-chaired Federal Lead-Based Paint Task Force
    and EPA served as an ex officio member of CDC's former Federal
    Advisory Committee on Childhood Lead Poisoning. Additionally,
    the EPA and CDC continuously work together on outreach efforts
    such as National Lead Poisoning Prevention Week and activities
    related to the Global Alliance to Eliminate Lead Paint.

        Regarding monitoring, as described in EPA's Air Quality
    Criteria for Lead document (2006) there are many sources that
    contribute to lead exposure, thus any measure of blood lead
    will reflect all sources of lead exposure. EPA is unaware of
    any national data set that directly measures only the
    reductions of only those lead hazards in homes caused by lead-
    based paint. The best currently available data set for
    assessing population level blood lead statistics is the CDC's
    National Health and Nutrition and Examination Survey (NHANES).

        Based on the NHANES 2014 data (sampling period 2009-2012),
    2.1%, or an estimated 535,000 children, have BLLs greater than
    or equal to 5  g/dL, levels known to put their academic and
    later life success at risk. This demonstrates a decrease from
    previous years (sampling period 2005-2008 at 3.0%, sampling
    period 2003-2006 at 4.1%). While overall decreasing BLLs are
    favorable, CDC's blood lead surveillance data, collected from
    state and local health departments, continues to identify a
    disproportionate share of cases in low income and minority
    communities. There is no known safe blood lead level for
    children. CDC, EPA and other federal partners continue to work
    together to control or eliminate lead hazards before children
    are exposed.

        2. Second, how is EPA enforcing this rule? For example,
    from June 4, 2014 through July 21, 2014 there were 15 companies
    nationwide who were noted on the EPA enforcement website as
    being cited for violations. Four of those companies were
    trainers of the certified lead paint course for renovators. Of
    the remodeling companies noted, all but one were uncertified.
    The National Association of the Remodeling Industry (NARI) has
    been tracking violations on the EPA's website since March 2013.
    There have been a total of 68 violations posted by EPA since
    March 2013. Given the number of remodelers who are uncertified
    in the nation, this is a poor showing of enforcement. It is my
    understanding that EPA, itself, has shared its concern over its
    enforcement plan, most notably its inability to identify
    contractors operating without certification, registration or
    ethical standards. How is the agency currently targeting those
    contractors who do not even bother to get certified?

        Response: The EPA is most concerned about renovation
    contractors who are not following the work practice safety
    standards. Certified firms have also been found to be out of
    compliance with the work practice safety standards of the Lead
    Renovation, Repair and Painting (LRRP) Rule. The EPA often
    receives tips or complaints from home owners, renters or
    neighbors about renovation work practices which are not
    containing dust and debris. The EPA may also work with local
    health and building permit and inspection departments to
    identify ongoing or projected renovation projects in housing
    built before 1978 and may conduct joint inspections of those
    worksites. The EPA is currently analyzing other methods to more
    effectively identify and prioritize potential non-compliance in
    areas with the highest level of ``at-risk'' populations, (i.e.
    children under six).

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