[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\
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    \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 
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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\
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    \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 
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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\
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    \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.
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    \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 
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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.
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    \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.
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    \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, 
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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.
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    \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 
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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?
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    \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,'' 
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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?
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    \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 
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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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