[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]





BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: THE ROLE OF FEDERAL 
                    AGENCIES IN WATER INFRASTRUCTURE

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

                                (115-5)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                    WATER RESOURCES AND ENVIRONMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 9, 2017

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure



                       

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman

DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee,      ELEANOR HOLMES NORTON, District of 
  Vice Chair                         Columbia
FRANK A. LoBIONDO, New Jersey        JERROLD NADLER, New York
SAM GRAVES, Missouri                 EDDIE BERNICE JOHNSON, Texas
DUNCAN HUNTER, California            ELIJAH E. CUMMINGS, Maryland
ERIC A. ``RICK'' CRAWFORD, Arkansas  RICK LARSEN, Washington
LOU BARLETTA, Pennsylvania           MICHAEL E. CAPUANO, Massachusetts
BLAKE FARENTHOLD, Texas              GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio                      DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida              STEVE COHEN, Tennessee
JEFF DENHAM, California              ALBIO SIRES, New Jersey
THOMAS MASSIE, Kentucky              JOHN GARAMENDI, California
MARK MEADOWS, North Carolina         HENRY C. ``HANK'' JOHNSON, Jr., 
SCOTT PERRY, Pennsylvania            Georgia
RODNEY DAVIS, Illinois               ANDRE CARSON, Indiana
MARK SANFORD, South Carolina         RICHARD M. NOLAN, Minnesota
ROB WOODALL, Georgia                 DINA TITUS, Nevada
TODD ROKITA, Indiana                 SEAN PATRICK MALONEY, New York
JOHN KATKO, New York                 ELIZABETH H. ESTY, Connecticut, 
BRIAN BABIN, Texas                   Vice Ranking Member
GARRET GRAVES, Louisiana             LOIS FRANKEL, Florida
BARBARA COMSTOCK, Virginia           CHERI BUSTOS, Illinois
DAVID ROUZER, North Carolina         JARED HUFFMAN, California
MIKE BOST, Illinois                  JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas           FREDERICA S. WILSON, Florida
DOUG LaMALFA, California             DONALD M. PAYNE, Jr., New Jersey
BRUCE WESTERMAN, Arkansas            ALAN S. LOWENTHAL, California
LLOYD SMUCKER, Pennsylvania          BRENDA L. LAWRENCE, Michigan
PAUL MITCHELL, Michigan              MARK DeSAULNIER, California
JOHN J. FASO, New York
A. DREW FERGUSON IV, Georgia
BRIAN J. MAST, Florida
JASON LEWIS, Minnesota

                                  (ii)

  


            Subcommittee on Water Resources and Environment

                   GARRET GRAVES, Louisiana, Chairman

ERIC A. ``RICK'' CRAWFORD, Arkansas  GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio                      LOIS FRANKEL, Florida
DANIEL WEBSTER, Florida              FREDERICA S. WILSON, Florida
THOMAS MASSIE, Kentucky              JARED HUFFMAN, California
RODNEY DAVIS, Illinois               ALAN S. LOWENTHAL, California
MARK SANFORD, South Carolina         EDDIE BERNICE JOHNSON, Texas
ROB WOODALL, Georgia                 JOHN GARAMENDI, California
TODD ROKITA, Indiana                 DINA TITUS, Nevada
JOHN KATKO, New York                 SEAN PATRICK MALONEY, New York
BRIAN BABIN, Texas                   ELIZABETH H. ESTY, Connecticut
DAVID ROUZER, North Carolina         CHERI BUSTOS, ILLINOIS
MIKE BOST, Illinois                  JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas           BRENDA S. LAWRENCE, Michigan
DOUG LaMALFA, California             PETER A. DeFAZIO, Oregon (Ex 
A. DREW FERGUSON IV, Georgia         Officio)
BRIAN J. MAST, Florida, Vice Chair
BILL SHUSTER, Pennsylvania (Ex 
Officio)

                                 (iii)



















                                CONTENTS

                                                                   Page

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

                               TESTIMONY

Jerry Ellig, Ph.D., Senior Research Fellow, Mercatus Center at 
  George Mason University........................................     7
Gary McCarthy, Mayor, Schenectady, New York, on behalf of the 
  U.S. Conference of Mayors......................................     7
John Linc Stine, Commissioner, Minnesota Pollution Control 
  Agency, on behalf of the Environmental Council of the States...     7
Mike Inamine, Executive Director, Sutter Butte Flood Control 
  Agency.........................................................     7
Jonathan Kernion, President, Cycle Construction Company LLC, on 
  behalf of the Associated General Contractors of America........     7
Kathy L. Pape, Senior Vice President Regulatory Policy and 
  Business Development, American Water, on behalf of the 
  Bipartisan Policy Center, Executive Council on Infrastructure..     7
Kevin DeGood, Director of Infrastructure Policy, Center for 
  American Progress..............................................     7

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Jerry Ellig, Ph.D................................................    47
Gary McCarthy....................................................    52
John Linc Stine..................................................    66
Mike Inamine.....................................................   107
Jonathan Kernion.................................................   114
Kathy L. Pape....................................................   121
Kevin DeGood.....................................................   129

                       SUBMISSIONS FOR THE RECORD

Hon. Grace F. Napolitano, a Representative in Congress from the 
  State of California, submission of letter of March 1, 2017, 
  from John Linc Stine, Commissioner, Minnesota Pollution Control 
  Agency, and President, ECOS, to Hon. Mick Mulvaney, Director, 
  Office of Management and Budget, and Hon. Scott Pruitt, 
  Administrator, U.S. Environmental Protection Agency............    22
Gary McCarthy, Mayor, Schenectady, New York, on behalf of the 
  U.S. Conference of Mayors, response to question for the record 
  from Hon. Grace F. Napolitano, a Representative in Congress 
  from the State of California...................................    65
Hon. Garret Graves, a Representative in Congress from the State 
  of Louisiana, submission of the following documents:

    Written statement of Larry A. Larson, CFM, P.E., Director 
      Emeritus, Association of State Floodplain Managers.........   136
    Letter of March 8, 2017, from Laura Ziemer, Senior Counsel 
      and Water Policy Advisor, Trout Unlimited, to Hon. Garret 
      Graves, Chairman, and Hon. Grace F. Napolitano, Ranking 
      Member, Subcommittee on Water Resources and Environment....   153
    Written statement of Mary Grant, Campaign Director, Public 
      Water for All, Food and Water Watch........................   156
    Letter of March 8, 2017, from National Rural Water 
      Association, to Hon. Garret Graves, Chairman, and Hon. 
      Grace F. Napolitano, Ranking Member, Subcommittee on Water 
      Resources and Environment..................................   161
    Article of November 4, 2016, ``Water Strategies for the Next 
      Administration,'' by Peter H. Gleick, Science Magazine.....   163
    Blog post of November 3, 2016, ``New Major U.S. Water Policy 
      Recommendations,'' by Peter Gleick.........................   166
    Op-ed of February 16, 2017, ``Oroville Dam Crisis Shows Why 
      We Can't Take Water Infrastructure for Granted,'' by Peter 
      Gleick, The Hill...........................................   168
    Written statement of American Rivers.........................   171
    Written statement of John A. Coleman, Chief Executive 
      Officer, Bay Planning Coalition............................   180
    Report, ``The Future Role of Dams in the United States of 
      America,'' January 24, 2017, by Michelle Ho, et al., 
      published by the American Geophysical Union................   184
    Resolution on Reservoir Sustainability, from the Subcommittee 
      on Sedimentation, a subgroup of the Advisory Committee on 
      Water Information..........................................   201
      
      
      
  
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BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: THE ROLE OF FEDERAL 
                    AGENCIES IN WATER INFRASTRUCTURE

                              ----------                              


                        THURSDAY, MARCH 9, 2017

                  House of Representatives,
   Subcommittee on Water Resources and Environment,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:02 a.m. in 
room 2167, Rayburn House Office Building, Hon. Garret Graves 
(Chairman of the subcommittee) presiding.
    Mr. Graves of Louisiana. The subcommittee will come to 
order. Good morning, and thank you for being here. Before I 
begin introducing our witnesses and doing opening statements 
this morning, I want to dispense with some of the unanimous 
consent requests.
    I ask unanimous consent that members not on the 
subcommittee be permitted to sit with the subcommittee at 
today's hearing and ask questions. Is there any objection?
    Without objection, so ordered.
    I ask unanimous consent that written testimony submitted on 
behalf of the following be included in this hearing's record: 
from the Association of State Floodplain Managers; from Trout 
Unlimited, including attached report prepared for the Building 
America Investment Initiative; \1\ from Food and Water Watch; 
from the National Rural Water Association; three articles by 
Peter Gleick; from American Rivers; from the Bay Planning 
Coalition; a publication from the American Geophysical Union; 
and a resolution from the Subcommittee on Sedimentation, a 
subgroup of the Advisory Committee on Water Information.
---------------------------------------------------------------------------
    \1\ The 100-plus-page report entitled ``40 Proposed U.S. 
Transportation and Water Infrastructure Projects of Major Economic 
Significance'' prepared for the U.S. Department of the Treasury on 
behalf of the Build America Investment Initiative can be found online 
at 
https://www.treasury.gov/connect/blog/Documents/final-infrastructure-
report.pdf.
---------------------------------------------------------------------------
    Without objection, so ordered.

    [The information can be found on pages 136-201.]

    I ask unanimous consent that the record remain open for 30 
days after this hearing in order to accept written testimony 
for the hearing record.
    Without objection, so ordered.
    And finally, I ask unanimous consent that the record of 
today's hearing remain open until such time as our witnesses 
have provided answers to any questions that may be submitted to 
them in writing.
    Without objection, so ordered.
    Thank you very much, again, for being here today, and 
looking forward to hearing from our diverse witness panel 
today.
    The impetus for this hearing was thinking about the fact 
that there has been a lot of talk about a major infrastructure 
package, about the talk of investment of $1 trillion in 
addressing some of America's infrastructure needs. If we are, 
say, a year out from beginning, from moving forward on that 
implementation, what are some of the things that we should be 
thinking about right now? What are some of the obstacles to 
delivering, to efficiently delivering infrastructure? What are 
some of the impediments or opportunities to improve our ability 
to quickly get these projects on the ground?
    And that is what we are doing here today. We brought, 
again, a diverse panel of witnesses to come provide to us their 
insight and thoughts on some of the things that we could be 
doing to help improve this process.
    In the short time that we have been named subcommittee 
chair, we have met with dozens and dozens of non-Federal 
sponsors, of local governments, of State governments, and other 
organizations from across the country, raising strong concerns 
about regulations and permitting processes that are in place 
that simply do not provide value.
    And I want to be clear: the need for regulations that 
ensure the protection of our environment, ensure the protection 
of the health and safety of Americans, things that look to make 
sure of the efficacy of investments, the cost-to-benefit ratios 
are all things that make a lot of sense. But in many cases, we 
have found regulations are solutions in search of problems. And 
that raises strong concern.
    So, again, looking forward to hearing from our witnesses 
today.
    And, with that, I am going to turn to the ranking member, 
Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chair, and welcome to the 
Subcommittee on Water Resources and Environment as the new 
chairman.
    Mr. Chairman, when you and I met just over a month ago to 
discuss a potential agenda for Congress, I suggested we start 
those areas where we could find common ground. This 
subcommittee is most successful when we work together in a 
bipartisan fashion to rebuild our Nation's crumbling 
infrastructure and prepare our communities for challenges they 
will face in decades to come.
    Without question, this Nation is witnessing a changing 
water-related environment, and those changes are having a 
profound implication on our local communities, our national 
environment, and our overall way of life. Ironically, our 
respective districts are facing very different challenges: 
yours with too much water, and mine, too often, too little. But 
the reality is that both districts must adapt and adequately 
prepare for what lies ahead.
    I am pleased that our first hearing focuses on an area that 
we should find common ground: the need for increased investment 
in our Nation's water-related infrastructure, especially 
Federal investment. We all know that the challenges facing our 
communities are in addressing the local water resources needs 
and adapting to a changing world, whether the issue is 
crumbling dams and levees, outdated sewers and stormwater 
conveyances, inefficient navigation corridors, or large-scale 
ecosystem restoration authorities.
    I am certain that every Member in this room can point to 
water-related challenges facing their constituents at home. 
Yet, if your elected officials are like mine, the central theme 
in meeting these challenges is the help needed for additional 
funding. As former chief of engineers once noted before this 
subcommittee, by failing to officially fund projects, we 
ultimately fail the American taxpayer by delaying the 
realization of project benefits, and by unnecessarily 
increasing costs due to these delays.
    Similarly, when we fail to provide the necessary resources 
to invest in, update, and adequate maintain our infrastructure, 
we should not be surprised when systems fail when communities 
are placed at risk, and the cost begins to become greater, and 
when our State and local economies underperform.
    My communities want to do the right thing. They want to 
provide our citizens with safe, reliable, affordable water and 
wastewater services, but they cannot do it alone. They are 
calling on us in Congress to renew the Federal commitment on--
to our water-related infrastructure.
    I was excited when infrastructure investment became a 
recurring theme during the 2016 Presidential election. I was 
equally pleased when the President made his commitment to 
triple the funding level for the Clean and Drinking Water State 
Revolving Funds.
    This subcommittee needs to take the next logical step and 
advance legislation like a reauthorization of the Clean Water 
State Revolving Fund, to renew the Federal commitment to 
meeting our community's infrastructure needs. This 
straightforward legislation last approved on a bipartisan basis 
by this committee in 2009 will help our communities meet the 
challenge of a changing water-related environment and create 
well-paying jobs in the United States.
    But we need to do much more. We need to address the very 
real affordability concerns raised by the communities in a way 
that does not weaken the Clean Water Act protections, and 
ensures our neighborhoods have access to clean, safe water and 
reliable waters--local environments. We need to look at 
targeting more additional Federal resources to our urban and 
rural communities when the traditional tools fail to meet the 
financial challenges these communities face on a daily basis.
    Mr. Chairman, I believe this committee can play an integral 
part in creating and sustaining family-wage jobs, and ensuring 
U.S. economic competitiveness and improving the daily lives of 
all Americans. And I do look forward to working with you on a 
bipartisan basis to honor these commitments to our communities. 
And I yield back.
    Mr. Graves of Louisiana. Thank you. And again, I look 
forward to working with you and continuing to find common 
ground.
    With that, I yield to the chairman of the full committee, 
the gentleman from Pennsylvania, Mr. Shuster.
    Mr. Shuster. Thank you, Chairman Graves. And this is a 
great way to start off your first hearing as chairman of this 
subcommittee, with a hearing like this. So I appreciate it. I 
won't tell anybody our private advice I gave you beforehand, 
but I know you will do extremely well.
    This is an important hearing. And, as the chairman 
mentioned, the President of the United States has said that he 
wants to figure out how to spend $1 trillion on infrastructure. 
And look, $1 trillion is not going to come from the Federal 
Government. It has got to come from a number of different 
sources. There has to be a Federal component to it. We know--
look at the Highway Trust Fund, the Harbor Maintenance Trust 
Fund, the Inland Waterways Trust Fund, other sources of 
revenue. We have got to figure out how to get the Federal 
revenue up to help with these projects and do its fair share 
and do its important part of the work.
    Public-private partnerships are part of that solution. I 
think it is a good tool in the toolbox, but it is not the 
toolbox. It is in there to help and assist, and we got to 
figure out ways to do that better. But there is a lot of 
private money and local money out there.
    Just in my home State of Pennsylvania there are two $4 
billion pipeline projects, 100 percent privately funded, and we 
have got Government agencies getting in the way of moving these 
forward. And I look across this country and there are billions 
of dollars across this country that are stuck in the mud, so to 
speak, with these Government agencies, and most of them, many 
times, it is the Federal agencies. And so reform has to be a 
huge part of this effort.
    And I know that you folks here, you all deal with the Corps 
of Engineers. And I know, as my experience has been across this 
country, it takes far too long to get these projects approved. 
And, in many cases, they take years to do it, and the projects 
don't change that much because they were pretty sound projects 
to begin with. So it is not just the Corps, it is FERC, it is--
again, you go across the Government agencies.
    They have got to get to the table at the same time, they 
have got to get these projects done. Because if you think about 
the Interstate Highway System, they built 47,000 miles of road, 
of interstate highway, in 14 years. I have 60 miles of roadway 
that took 35 years to get through my district. And that is just 
unthinkable in today's society, with the technology, the 
science we have to be able to check these different projects 
out. We ought to be able to move them forward, and that is 
something that I know the chairman, this chairman, the former 
chairman, Mr. Gibbs, and myself are all committed to getting 
these reforms in place to move these projects forward.
    When you look at the lack of investment in our ports, our 
harbors, inland waterways, the locks, the dams, flood 
protection, environmental restoration, these are all things 
that we need to move forward with much faster than we have in 
the past. And I think that we can do that.
    One of the things that I will be supporting moving 
forward--that I have always supported, but we got to get the 
system put in place in the right way--is the Harbor Maintenance 
Trust Fund. Those dollars, $1.8 billion, we only spent $1 
billion on harbors and ports. The other $800 million, I am not 
sure where it goes, here and there and everywhere. But those 
dollars were put in that fund, and the trust was that it was 
going to be spent on those projects and those ports and those 
harbors.
    So again, I talked with the President, his people. We have 
got to get that into their budget. It makes it easier for us to 
get it into our budget. So I am committed to working forward to 
see that those dollars get spent on what their intended 
purposes were.
    And when you look at that $800 million, there is probably a 
three-, four-, five-, six-times multiplier, because when the 
Federal Government comes to the table with these dollars, the 
locals, the States, the private sector are all going to make 
the investments needed to do what they have to do in those 
ports and harbors around the country.
    So again, for me this is an exciting time. Never did I 
think that a Republican President would be the one to stand up 
at an inaugural address and use the word ``infrastructure,'' 
but it happened. And I am just glad to be here and be part of 
this, and I am really excited about this hearing today, and as 
we go forward.
    So thank you all very much. I yield back.
    Mr. Graves of Louisiana. Thank you, Mr. Chairman. And now I 
recognize the ranking member, Mr. DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman. I want to both 
welcome the witnesses, and I want to congratulate you on your 
first hearing as chair. I know you are vitally interested in 
water issues, coming from a somewhat watery State, shall we 
say, and I am pleased to be working with you. And I am pleased 
that today we are jointly sending a letter to President Trump, 
urging him to fully utilize the Harbor Maintenance Trust Fund 
as a part of his $1 trillion infrastructure plan.
    As Chairman Shuster noted, $9 billion have been diverted 
into a theoretical fund over at the Treasury. Every day, every 
American who buys an imported good pays a little bit more for 
it with the understanding that that is going to facilitate the 
movement of freight in and out of the United States through our 
ports, and that more efficient movement would actually pretty 
much offset the minuscule tax. Unfortunately, if you don't 
spend the tax, then you still have the delays, the ships parked 
miles out into the ocean, and so people are paying the tax, the 
money isn't being spent, and they are paying more for the 
imported goods because of the delays.
    We are breaking faith with the American people. It seems 
kind of like a no-brainer. On a daily basis, our 59 busiest 
harbors have 35 percent availability of maximum depth. And that 
is not even to deal with the new challenges of the post-Panamax 
ships. So I am hopeful that we can move forward with that.
    I did get a version of that, somewhat awkward and crippled, 
out of this committee because of the budget rules--which are 
waived on a daily basis around here, but in that case, boy, 
they had to be enforced--so I am hopeful we will do it honestly 
and just say, hey, forget about the stupid budget rules, let's 
spend the tax for the purpose for which it was collected, deal 
with the maintenance backlog in our harbors, and more 
efficiently move freight.
    There is a regulatory pendulum. It can swing way over here 
and way over there. The sweet spot is in the middle. And it is 
always difficult to get there. I believe there are unnecessary 
delays and impediments due sometimes to bureaucracy and to, you 
know, misguided regulations. I have been having an ongoing 
dispute with FEMA and National Marine Fisheries up in my 
region. So I can understand that, and I welcome an honest 
discussion of that.
    But I also caution that you don't swing to the other 
extreme, which is, you know, we are just going to facilitate 
projects, whether or not they are well thought-out, whether or 
not they have community support, and whether or not they might 
have unintended consequences. Look at 50 years ago, the central 
and southern Florida project, which was authorized in 1948, 
which diked Lake Okeechobee, Kissimmee River. Part of the 
Everglades was drained. It is widely recognized by the 
residents, the communities, and everyone around there, as a 
disaster. And now Congress, 50 years later, passed a plan that 
cost $10 billion to reverse some of that.
    So, if we approach some of these major projects in a more 
balanced way, I think we will be better off and not have to try 
and reverse their impacts later.
    We have had significant testimony before this committee, 
including a former colleague who was head of the Corps of 
Engineers for a brief period of time until he came here before 
this committee, presented the Bush budget for Corps of 
Engineers, and I said, ``Is that budget adequate to deal with 
these backlogs and all these other problems we have,'' and he 
said no. The next week he resigned to spend more time with his 
family.
    So, you know, we need to encourage honesty. And the honest 
thing is the most major impediment is lack of funding, plain 
and simple. And then we can deal with any regulatory burdens 
that crop up in the interim. I mean, in surface, you can't say 
that the 150,000 bridges out there, 99 percent of which are not 
going to require any major environmental analysis, that need to 
be repaired or replaced, are not getting done because of 
environmental, you know, restrictions. They are not getting 
done because the Government isn't investing the money in the 
National Highway System. It is the same with our ports and 
harbors, which is under the jurisdiction of this subcommittee.
    So, I welcome the witnesses here today. I want to hear and 
hope to hear about that kind of balance and the need to better 
invest. Thank you, Mr. Chairman.
    Mr. Graves of Louisiana. Thank you. With that, I would like 
to turn to our first witness.
    We have Mr. Jerry Ellig, who is the senior research fellow 
at the Mercatus Center at George Mason University. Mr. Ellig, 
you are recognized for 5 minutes.
    OK, this--is the timer working? OK.

   TESTIMONY OF JERRY ELLIG, PH.D., SENIOR RESEARCH FELLOW, 
  MERCATUS CENTER AT GEORGE MASON UNIVERSITY; GARY MCCARTHY, 
MAYOR, SCHENECTADY, NEW YORK, ON BEHALF OF THE U.S. CONFERENCE 
 OF MAYORS; JOHN LINC STINE, COMMISSIONER, MINNESOTA POLLUTION 
 CONTROL AGENCY, ON BEHALF OF THE ENVIRONMENTAL COUNCIL OF THE 
 STATES; MIKE INAMINE, EXECUTIVE DIRECTOR, SUTTER BUTTE FLOOD 
CONTROL AGENCY; JONATHAN KERNION, PRESIDENT, CYCLE CONSTRUCTION 
COMPANY LLC, ON BEHALF OF THE ASSOCIATED GENERAL CONTRACTORS OF 
AMERICA; KATHY L. PAPE, SENIOR VICE PRESIDENT REGULATORY POLICY 
  AND BUSINESS DEVELOPMENT, AMERICAN WATER, ON BEHALF OF THE 
BIPARTISAN POLICY CENTER, EXECUTIVE COUNCIL ON INFRASTRUCTURE; 
AND KEVIN DEGOOD, DIRECTOR OF INFRASTRUCTURE POLICY, CENTER FOR 
                       AMERICAN PROGRESS

    Mr. Ellig. Thank you, Mr. Chairman. I guess I should say to 
multiple chairs and multiple ranking members, thank you for the 
opportunity to testify today. My name is Jerry Ellig. I am an 
economist and a senior research fellow at the Mercatus Center 
at George Mason University. And I come to approach today's 
topics a little bit differently, because I was asked to talk a 
little bit about some general problems and tendencies in the 
U.S. Federal regulatory process that may be the source of some 
of the frustrations that some of the members of the committee 
and the subcommittee just mentioned in some of the opening 
statements.
    I come to this as a generalist. Most of my research in the 
past 15 years has focused on the Federal regulatory process and 
performance management of Federal agencies. So I don't come to 
this as an expert on the particular programs this committee has 
jurisdiction over. But, nevertheless, I was asked to talk about 
some general regulatory issues.
    There is a tendency in our Federal regulatory process for 
folks to focus on intentions, rather than outcomes; intentions, 
rather than results. And there are at least three kinds of 
symptoms of this that I can mention.
    One is a tendency of regulatory decisionmakers to focus on 
activities and outputs, rather than results. So we have, for 
example, a lot of folks in Federal agencies who honestly 
believe that their job and their success should be measured by 
production of regulations, or perhaps by enforcement activity, 
rather than how many problems did they solve, what did they 
actually accomplish.
    A colleague of mine at the Mercatus Center interviewed a 
number of economists in Federal regulatory agencies a number of 
years ago, and one of them described the way his agency worked 
as, ``Success is putting out 10 regulations a year, and bigger 
regulations are bigger successes.'' You notice there is nothing 
in there about actually achieving results, because we are 
focused on measuring activities and outputs, rather than 
focused on measuring what have you actually accomplished with 
the regulation.
    And the solution really has to start with Congress 
articulating what outcomes it wants to achieve when it 
authorizes regulatory legislation, and then following up to 
ensure that retrospective assessment is done to find out 
whether the regulation achieved the intended purpose. And, if 
so, at what cost.
    Another related problem is there are often serious 
deficiencies in the analysis that Federal agencies are supposed 
to do. They are supposed to inform regulatory decisions. Now, a 
lot of water projects and other types of projects go through 
some type of benefit-cost analysis. And you might say, well, 
gee, what is sauce for the goose ought to be sauce for the 
gander. Folks who want to constrain what can be done in those 
projects through regulation should also be going through the 
same kind of analysis. And executive branch agencies are 
required to do this by Executive orders, but we often find that 
there are serious deficiencies and omissions in the analysis. I 
have seen that in my research. A lot of other folks who 
actually research the quality of agency analysis, regulatory 
agency analysis, find the same thing.
    The final problem we often have is something I call ready-
fire-aim regulation. Now, this occurs when regulatory agencies 
essentially decide what they want to do, and only then conduct 
the research that is supposed to inform their decisions. And 
the process of doing the research becomes the process of 
creating a litigation support document to support decisions 
that have already been made for other reasons.
    One of my colleagues, who actually spent 27 years as an 
economist in the Federal Government, told me about an adventure 
he had where he was working on a regulation. The agency had 
already decided to issue it. He was still working on the 
analysis that was supposed to determine whether it was worth 
doing, and he was told on a Friday afternoon, ``If you can't 
find more benefits over the weekend, don't bother coming back 
to work on Monday.''
    Folks, that is not the way that regulatory agencies should 
be approaching regulation. And again, this does not always 
happen. There are good, committed people at regulatory agencies 
who do a good job figuring out what they are supposed to do 
before they make decisions. But there is also plenty of 
research that demonstrates that there are often some pretty 
significant deficiencies in either the quality of agencies' 
underlying analysis, or maybe they do good analysis but they 
don't necessarily pay attention to it.
    So, all three of these kinds of problems occur when we 
focus on good intentions, rather than focusing on outcomes. And 
if we want to fix the problem, we need to flip that around so 
that we are focused on regulatory outcomes first, and the 
evidence of what is happening, whether it is being done, and 
what agencies are actually trying to accomplish.
    Mr. Graves of Louisiana. Thank you.
    Our next witness is the Honorable Gary McCarthy, mayor of 
Schenectady, New York.
    Mayor McCarthy, you are recognized for 5 minutes.
    Mr. McCarthy. Chairman Shuster, Chairman Graves, Mrs. 
Napolitano, members of the committee, thank you for the 
opportunity to be here this morning.
    Since 2011, Schenectady has borrowed, collectively, just 
under $53 million to be spent on upgrading pipes, replacing 
equipment, and rehabilitating our wastewater treatment plant. 
In 2017 the city is embarking on an SSO [sanitary sewer 
overflow] mitigation project, including a $24 million project 
to eliminate a sanitary sewer overflow, and $6 million to 
improve our system's overall resiliency.
    Schenectady does not contest the importance of 
environmental protections and efforts, and has significantly 
invested in these projects. But we are being forced to expend 
even more funds, while we are still attempting to recover from 
the great recession and decades of population decline in an old 
industrial city. Our strong local economic recovery has been 
placed in a precarious situation by this significant burden.
    In addition to the tax burden, the consent order the 
Schenectady operates under requires a 4-to-1 exchange for new 
connections. I want to emphasize that, that Schenectady is not 
allowed to do a new hookup unless I remove four other hookups 
or entry points within the system. This critically limits our 
economic development projects, and is totally counterproductive 
to what we have been trying to accomplish in our community.
    While we face the burden of traditional infrastructure, we 
are only scratching the surface on what is possible through 
Smart City technology. Our partnerships with our business 
community have allowed us to install at this point roughly 200 
smart lights, which will reduce our cost and improve the 
delivery of several key city services. This emerging technology 
allows us to use this platform for real change. Data will be 
collected and disseminated to users, allowing much more 
educated and appropriate decisions to be made.
    Additional devices, such as analytic cameras, temperature 
and motion sensors, traffic monitoring devices, and the 
potential for interconnected health care and other life safety 
devices deployed on a network of over 5,000 city streetlights 
provides an opportunity to evaluate numerous core challenges in 
an urban environment.
    This 21st-century infrastructure cannot be ignored while we 
bear the burden of investment in the more traditional 
infrastructure. To do so would be to put the city and the 
Nation's long-term--is a peril, as we have missed this critical 
opportunity for economic growth and improve educational 
opportunities and long-term efficiencies within our 
communities.
    What I would ask today is that we need increasing 
partnership. We look to continue the SRF program, as well as 
CDBG, and looking to provide grants in the WIFIA funding in 
protecting municipal bonds.
    And other ways that you can help would include passing the 
Integrated Planning and Affordability legislation, commonly 
referred to as H.R. 465. I want to thank Mr. Gibbs for 
listening to the mayors' concerns regarding unfunded mandates 
and affordability in his introduction of H.R. 465. This bill 
would allow local governments to work with the EPA to develop 
plans where we can comprehensively deal with the biggest 
environmental and public health needs first, and do it in a way 
that is more affordable to our citizens.
    I have a letter that is signed by members of--representing 
the U.S. Conference of Mayors, asking for cosponsors in the 
passage of H.R. 465, and that has been attached to my testimony 
submitted to you.
    By reauthorizing and fully funding the brownfields law, you 
will be encouraging the recycling and reusing of properties and 
upgrading of existing infrastructure. In addition, many 
communities redevelop brownfields to create more green 
infrastructure, which helps with stormwater controls.
    And I have already mentioned how Schenectady is utilizing 
new technology for our above-ground systems. However, there can 
also be improvements that can be made below ground. All 
utilities can improve service through the incorporation of 
modern technologies specifically designed to increase 
efficiencies and reduce cost. Congress and the administration 
should be supporting the renewable public water and sewer 
infrastructure in America through new technology.
    There is much Congress and the Federal Government can do to 
work in partnership with our Nation's cities to upgrade our 
infrastructure and invest in our future. And we need to end the 
siloed approach of handling issues, and think holistically on 
how to deal with our infrastructure, environmental, economic 
development concerns, as we work together.
    Again, I thank the committee for the opportunity to be here 
today, and look forward to your questions.
    Mr. Graves of Louisiana. Thank you, Mr. Mayor. And to 
introduce our next witness, I am going to recognize Mr. Nolan.
    Mr. Nolan. Thank you, Chairman Graves and Ranking Member 
Napolitano, and members of the committee. As a member of the 
full committee, I am grateful for your allowing me to sit in on 
today's important hearing.
    And by way of introduction, let me say, you know, one thing 
we all agree on is that our Nation's outdated and obsolete 
wastewater treatment and drinking water systems are desperately 
in need of repair. And in many cases, crumbling before our eyes 
and degrading our waters and the health of our people.
    With that in mind, it is my honor to introduce my good 
friend, Minnesota's good friend, our commissioner of the 
Minnesota Pollution Control Agency, John Linc Stine, who is 
here on behalf of the Environmental Council of the States.
    John has spent over 30 years as a powerful and tireless and 
gifted advocate in the fight to protect our precious air and 
water and land from pollution and degradation. We are all very 
proud of his great leadership, and I am very proud to have the 
opportunity to introduce him to the committee here today.
    John, welcome.
    And thank you to the committee for allowing me to make this 
introduction.
    Mr. Graves of Louisiana. Thank you, Mr. Nolan.
    Mr. Stine, you are recognized for 5 minutes.
    Mr. Stine. Thank you, Congressman Nolan. Thank you, Mr. 
Chair, for this opportunity, and Ranking Member Napolitano. I 
am John Linc Stine, I am commissioner of the Minnesota 
Pollution Control Agency, as Mr. Nolan said, and I represent 
also, as the president of the Environmental Council of the 
States, or ECOS, a nonpartisan national organization of my 
colleagues who lead State and territorial environmental 
protection agencies across America.
    And, Chairman Graves, as you know, the Mississippi River 
begins in the State of Minnesota at Lake Itasca, and ends in 
your State. And I take it as my duty to deliver the cleanest 
water possible that Minnesota can send your way.
    States hear every day from our citizens about the value of 
clean water, adequate flood control, and prevention of 
pollution. Infrastructure underpins every one of those issues, 
and we know that a society cannot thrive without clean water. 
Industry and jobs depend on a reliable water supply and the 
capacity to process wastewater.
    Clean water is vital to manufacturing, recreation, and 
other industries that are central to our economy. The community 
of Worthington in southwestern Minnesota is making needed 
improvements to their wastewater treatment plant to accommodate 
a meat-packing operation that needs to expand. Nearby, Morris, 
another community, needs to make improvements to their drinking 
water system to provide water for their ethanol plant.
    ECOS aims to strengthen the partnership between the States 
and the Federal Government to implement our Nation's 
environmental laws and policies while focusing on results. 
Water infrastructure is one of the focus areas of our ECOS 
document, ``Priority Issues in a Time of Political 
Transition,'' which we produced to address the new 
administration's priorities. Our members identified 20 priority 
projects for wastewater and water supply, by State, that are 
ready to go in 2017. That list amounts to $18.2 billion in 
need.
    Our country prospered and thrived, thanks to the 
investments that were made in water infrastructure 75 to 100 
years ago. Some of the most significant of those have occurred 
since the passage of the Clean Water and Safe Drinking Water 
Acts. Federal, State, and local partnerships helped make those 
investments successful, and we need to continue to make 
investments that are critical to the upkeep of those initial 
investments. Federal funding, using portions of the EPA's State 
and Tribal Assistance Grants, which make up the Clean Water and 
Drinking Water State Revolving Loan Funds, are critical to 
those investments.
    The revolving nature of those loan programs and States' 
efforts to maximize the Federal capitalization grants ensure a 
continuing return on investment. The successful history of 
national water and wastewater programs, however, is 
overshadowed by the enormous and extensive need. Estimates 
range from $384 billion through 2030 for our drinking water 
infrastructure, and $271 billion through 2022 for wastewater 
infrastructure needs.
    Our distressed urban areas, small communities, and rural 
communities are particularly pressed to make the needed water 
infrastructure investments. Many of these communities find it 
difficult to keep up with the numerous increasingly complex 
Federal requirements due to a small tax base, lack of adequate 
financing options, management skills, trained personnel, and 
systems to manage environmental requirements.
    ECOS continues to raise the importance of efficient, 
affordable, and timely financial award to these distressed 
communities. For example, the community of Gilbert in 
Congressman Nolan's district is a mining town that is facing an 
$8.6 million project to replace a old wastewater treatment 
plant to reduce overflows of raw sewage. They have a declining 
population and high unemployment. They simply cannot afford a 
project of that size without assistance.
    Reliable infrastructure is critical to the protection of 
public health and community well-being because lack of clean 
water is a serious health threat. In the southern Minnesota 
community of St. Peter they had high nitrate levels in their 
groundwater because shallow groundwater is the only available 
water source in that part of our State. And in order to protect 
their community, they needed to make the investments to treat 
for nitrates. They did it to protect their children's health, 
and the health of their elderly.
    Minnesota has invested in programs to monitor and regulate 
corrosion and aging water systems, and we need to continue to 
do that at the State level.
    As science has increased the awareness of public health 
risks, and the environmental regulatory system has grown more 
complex, there are disagreements over the cost and levels of 
protection that continue to make national headlines. But we 
must remember our foremost obligation: to protect the 
environment and public health through investments in our 
country's infrastructure. Thank you very much.
    Mr. Graves of Louisiana. Thank you, Mr. Stine.
    Our next witness is Mr. Mike Inamine, who is executive 
director of the Sutter Butte Flood Control Agency.
    Mr. Inamine, you are recognized for 5 minutes.
    Mr. Inamine. Good morning, Chairman Graves, Ranking Member 
Napolitano, and members of the committee. My name is Mike 
Inamine, and I am executive director of the Sutter Butte Flood 
Control Agency. Thank you for the opportunity to address the 
committee on this most important timely issue.
    Before beginning my testimony, I would be remiss if I did 
not acknowledge Congressmen LaMalfa and Garamendi who are not 
here right now. These are two members of the committee who have 
been true partners on these local efforts from the start. But 
for their efforts, I would be telling a very different story 
today.
    Sutter Butte Flood Control Agency, or SBFCA, as it is 
known, was formed in 2007 to consolidate the efforts of several 
agencies and communities with flood management responsibilities 
and implementing locally led flood protection projects. SBFCA 
is a joint powers authority composed of the cities of Biggs, 
Gridley, Live Oak, Yuba City, the counties of Sutter and Butte, 
Levee Districts 1 and 9. SBFCA leads the planning and 
implementation of flood control projects in this historic 
agricultural basin.
    The Sutter-Butte Basin covers 300 square miles along the 
west bank of the Feather River, immediately downstream of Lake 
Oroville. The basin is home to 95,000 residents and encompasses 
$7 billion of damageable assets. The region has sustained 
numerous floods, including the 1955 levee failure on the 
Feather River, which resulted in the deaths of at least 38 
people.
    The goals of the agency are to achieve 200-year level of 
flood protection for urban communities in the north, and 100-
year protection or equivalent in the south, in the rural areas. 
Under State law, urban or urbanizing areas cannot be developed 
without achieving a 200-year level of protection--that is twice 
the FEMA level of protection--thus eliminating opportunities 
for risky residential development. SBFCA is nearing completion 
of the $300 million Feather River west levee project that 
provides a 200-year level of protection for the northern basin.
    The United States Army Corps of Engineers has traditionally 
been the most important builder of flood projects, as well as 
the most powerful regulator of these same projects. I would 
like to briefly comment on the local relationship of the Corps 
of Engineers under these two important processes.
    Basically, there are two ways for a local agency to get a 
Federal project levee fixed in California: partner with the 
Corps of Engineers under the Civil Works Program and wait a 
couple of decades or more; the second path is for a local 
agency to pass a local assessment, often very difficult, then 
cost-share with the State of California and be consistent with 
the strategic Central Valley Flood Protection Plan, then seek 
permission from the Federal Government to fix their levee under 
an article of law called section 408.
    This latter process is also quite slow, taking 3 to 4 years 
for large flood projects. This year, SBFCA will complete the 
Feather River west levee project, which improves about 30 miles 
of Federal project levee, without changing the design or 
purpose of the project, and without spending a dime of Federal 
money. Yet this permission process took 19 months, and is 
considered light speed, a world's record.
    The Corps has recently improved the civil works planning 
process. SBFCA was pleased to be one of four pilot projects 
selected from throughout the country to test the 3x3x3 planning 
process. To the Corps' great credit, the Sutter Basin study was 
a great success, and met all objectives. The Corps delivered.
    However, authorization is only part of the story. The 
appropriations process takes more Acts of Congress and takes 
several years, never mind construction. In the case of the 
Feather River west levee project, we have already constructed 
80 percent of the Federal project with our own money, yet we 
are struggling to get the Federal Government to finish the job. 
Thus, the successes of the planning study, State/local 
innovative financing, and local initiative may be squandered on 
this traditional appropriations process.
    There are a number of things the Corps can do to improve 
risk reduction, whether performed by local, State, Federal, or 
even private entities.
    Prioritize work by risk reduction, not who builds the 
project. Incorporate the successful 3x3x3 process into the 408 
permission. We are heartened and grateful that Civil Works 
Director James Dalton has already initiated changes, and we 
hope to see these expanded and codified. This is a big deal for 
local agencies.
    Do not intermingle 408 permission processes with separate 
civil works processes. Otherwise, delays are inevitable.
    Allow local, State, and even private entities to construct 
civil works projects. WRRDA 2014 [Water Resources Reform and 
Development Act of 2014] includes a provision to advance this 
concept. However, this pilot has not happened to date.
    And finally, proactively consult with the Advisory Council 
on Historic Preservation on issues concerning Native American 
cultural resources.
    This statement would be incomplete without noting the 
importance of the single most important flood control feature 
on the Feather River, Oroville Dam. Feather River is the 
discharge channel of Oroville's spillway. Dams and levees are a 
system, and as the ongoing crisis at Oroville Dam evolves, it 
is easy to forget that the primary failure mode that will 
result in loss of life and property is not necessarily dam 
spillway failure, but rather, levee failure. Oroville Dam has 
appropriately captured all of our attention at the moment, but 
we cannot neglect the vulnerability of our levees in the system 
that includes the Oroville Dam.
    Thank you for holding this hearing and your continued 
attention to these important issues. Our lives and livelihoods 
depend on it.
    Mr. Graves of Louisiana. Thank you very much.
    Next witness is Mr. Jonathan Kernion--thank you very much 
for being here--president of Cycle Construction Company.
    Mr. Kernion. Thank you. Chairman Graves, Ranking Member 
Napolitano, Chairman Shuster, and other members of the 
committee, thank you for inviting me to speak before you today.
    I am Jonathan Kernion, president of Cycle Construction 
Company, based in Kenner, Louisiana. Our company is a family-
operated general construction firm founded in the late 1990s. 
We focus on heavy civil construction, marine construction, 
coastal restoration, environmental infrastructure, underground 
utilities, roads, bridges, demolition, waste management, and 
emergency response. I testify before you as a member of and 
representing the Associated General Contractors of America.
    I want to add something in this--what I am talking, and I 
am going to plagiarize something I heard from one of our levee 
district heads in--down in South Lafourche. He has been waiting 
now to build the levee for 5 years to get a wetlands permit so 
he could build the levee to save, literally, hundreds of 
thousands of lives, money, property, everything else. And he 
still hasn't got a wetlands permit.
    And he made a very, very unique reference to that, and he 
said that in 1941 Japan bombed Pearl Harbor. We were not a 
superpower at the time, but at the time we didn't have much, 
you know, as far as power. And what he said was, in the 4 years 
after that, we built close to 80,000 aircraft, 1,200 large 
combat ships, recruited and trained well over 7 million combat-
ready troops, and we became a superpower of the world. But 
today, in 2017, he can't get a Federal wetland permit in 5 
years to build a levee to save lives, which pretty much sums up 
the story and tells it.
    I will go on from there. In order to build a 21st-century 
infrastructure, we need to be able to build it some time this 
century. Sadly, that is easier said than done. There are many 
kinks in the chain that can delay construction for years. In my 
testimony, I try to highlight some opportunities to more 
efficiently deliver water infrastructure projects during the 
preconstruction and actual construction phases.
    Before construction begins, there are many--too many--
Federal agency cooks in the environmental review and permitting 
kitchen. They follow laws and regulatory processes that came 
about independently, laid on top of one another with little or 
no regard for how they fit in the overall process. And even 
when you get to the top of the environmental review ladder, a 
backyard lawsuit can shoot you down to the beginning of the 
game.
    As such, projects can be delayed years and even decades, 
waiting for environmental reviews and permits to be completed. 
In my home State of Louisiana, we don't have years to protect 
and restore our environmental sensitive coastline. A football 
field worth of coastline erosion is caused, on average, every 
hour. It is alarmingly ironic that the lengthy environmental 
permitting and review processes that are intended to protect 
our coastline could, at least in part, lead to its further 
destruction.
    AGC looks forward to working with this committee to better 
integrate the Federal environmental review and permitting 
process, building upon the reforms of NEPA and the past 
transportation reauthorization bills, and curving frivolous 
environmental lawsuits.
    During construction, contractors face two primary problems: 
certain and reliable project funding streams, and Federal 
agency indecision. We do not build our homes from the ground up 
over a course of 30 years. However, we too often build our 
Nation's water infrastructure that way.
    While we can point to Federal agencies as a cause for many 
problems, the buck starts and stops with Congress, literally. 
Until Congress allows water infrastructure projects to be 
funded outside the whims of the annual appropriation process, 
where funding comes in uncertain dips and drabs, we will 
continue to face unnecessary construction delays.
    One of the greatest challenges contractors face on the 
Federal water infrastructure job site is obtaining decisions 
from Federal agencies. Former President Theodore Roosevelt is 
credited in saying, ``In any moment of decision, the best thing 
you can do is the right thing, the next best thing is the wrong 
thing, and the worst thing you can do is nothing.''
    As with any construction project, unforeseen issues may and 
will emerge. The problem comes with getting the Federal agency 
to make a decision to act or not. Decisions may have to move up 
the chain of command. If the right person or persons are not 
available, the decision sits on their desks. AGC hopes to work 
with the committee to reduce the links in the chain of the 
command necessary to shorten and obtain timely decisions during 
construction.
    Thank you again for inviting AGC to testify before the 
committee today. I look forward to answering any questions you 
may have.
    Mr. Graves of Louisiana. Thank you, Mr. Kernion.
    Our next witness is Ms. Kathy Pape, senior vice president 
of regulatory policy and business development at American 
Water.
    Ms. Pape, you are recognized for 5 minutes.
    Ms. Pape. Thank you, Chairman Graves, Ranking Member 
Napolitano, Chairman Shuster, and members of the committee. My 
name is Kathy Pape. I am senior vice president of regulatory 
policy and business development at American Water, which is the 
largest investor-owned water and wastewater service provider in 
the United States. We provide water and wastewater service to 
about 15 million people in 47 States, and that includes 12 
military bases, as well.
    I appear before you today on behalf of the Bipartisan 
Policy Center's Executive Council on Infrastructure. That 
group's goal is to focus on how private investors can help to 
fund public projects. We have three recommendations for you 
today. But before I get into those three recommendations, I 
would like to give you a real-life example of a private company 
helping a public project about 110 miles north of here in 
Fairview Township, Pennsylvania, in late 2015.
    Fairview Township decided to sell its wastewater system to 
Pennsylvania American Water. As a result, that township was 
able to pay off all of its sewer debt, was able to reduce 
property taxes by 50 percent, and it was able to refund a 
$10,000 per-customer hookup fee that the township charged. Just 
one example of many that I could give.
    We have three recommendations today, and the first one 
involves where investment goes. And our belief is--and 
recommendation is--that investment should go towards 
sustainable and compliant water and wastewater systems. That 
means spend Federal money wisely. The way the system is set up 
now, most Federal dollars will go toward the most noncompliant 
systems. There is points given for noncompliance. Our belief is 
that putting money toward a poorly run system is like a shot of 
Botox. It is short term, it won't erase years of abuse, and you 
will need it again and again and again.
    Dollars should go towards those systems that are capital-
efficient and that are also cost-transparent. And by that I 
mean systems that charge true cost of service. Many times true 
cost of service is not charged either because there has been an 
influx of Government money, or because Government leaders don't 
believe that charging true cost of service will help them 
politically. But a system is not sustainable if true cost of 
service is not charged.
    Our second recommendation goes towards options and 
alternatives. As somebody said this morning, the Federal 
Government can't fully fund $1 trillion. But there are many, 
many private investors who are willing to help do that. We have 
56,000 community water systems, 19,000 wastewater pipe systems, 
14,000 wastewater treatment systems, many of which were funded 
in the 1970s by Government grants, and those Government grants 
aren't around any more.
    So we have our economic vitality being challenged, as well 
as the health of our children and grandchildren. We need to 
look for new ways and break down regulatory burdens. More 
alternatives, more options.
    And finally, the third recommendation is relatively simple, 
and that goes to the Clean Water State Revolving Fund. Private 
companies are not eligible for funding under the clean water or 
the wastewater part. We can access Drinking Water State 
Revolving Funds, so we would ask that that is one of the ways 
to help private companies help the Government to fund the 
infrastructure that is needed.
    In summary, our recommendations are three: invest wisely, 
put dollars toward those systems that are most compliant, that 
are sustainable, and have a track record of doing what should 
be done; second, that is break down those regulatory barriers 
and offer more options--many of those barriers have been 
mentioned this morning; and finally, provide access to the 
Clean Water State Revolving Fund.
    Mr. Graves of Louisiana. Thank you, Ms. Pape. I appreciate 
your testimony.
    And our last witness is Mr. Kevin DeGood, who is director 
of infrastructure policy at the Center for American Progress.
    Mr. DeGood, you are recognized for 5 minutes.
    Mr. DeGood. Thank you, Chairman Graves and Ranking Member 
Napolitano, and members of the committee, for inviting me to 
testify. It is an honor and a privilege to contribute to this 
committee's work.
    Water is an essential element of our daily lives and vital 
to our economy. The start of the 115th Congress presents 
Members with the opportunity to review the investments and 
policies needed to move the country forward in the coming 
years.
    And while the elections on November 8th produced a change 
in leadership in Washington, one thing remains clear: no one 
walked into a voting booth demanding dirtier water, lower 
wages, and higher profits for Wall Street. And yet, weakening 
the Clean Water Act, eliminating Davis-Bacon prevailing wage 
standards, and pushing high-cost equity capital through public-
private partnerships will do all of those things.
    Rather than rolling back the environmental progress of 
recent decades, this Congress has a clear mandate to build a 
stronger, cleaner future for our communities by providing 
direct funding to improve water quality and reliability, flood 
control, and navigation in a sustainable way.
    State and local governments, as well as drinking and 
wastewater authorities face enormous infrastructure challenges. 
Many legacy facilities have come to the end of their useful 
life, requiring major rehabilitation or outright replacement. 
At the same time, population growth, source water pollution, 
and increasingly extreme weather patterns brought about by 
climate change have added to the complexity and cost of 
providing safe and reliable water and protecting against the 
ravages of flooding, drought, and sea-level rise.
    The EPA estimates that the Nation will need approximately 
$655 billion to maintain current health and environmental 
standards. The recent winter storms that have lashed northern 
California offer a powerful lesson in how rapid swings from 
intense drought to intense precipitation can overwhelm critical 
facilities that were designed using more stable climactic 
assumptions.
    More than 180,000 residents in the Oroville region had to 
be evacuated on short notice due to spillway failures. This 
episode highlights the fragility of older facilities, and the 
essential role that water infrastructure plays in supporting 
public health, safety, and economic productivity.
    California is not alone in facing water infrastructure 
challenges from climate change. For example, south Florida must 
modernize a host of facilities to deal with rising seas. For 
these communities, adapting to climate change is an issue of 
basic economic viability. Based on detailed technical work from 
Swiss Re, a company in the reinsurance industry, the Miami-Dade 
sea level rise task force determined that major improvements 
would be needed to ``avoid or postpone wholesale abandonment 
due to noninsurability or the high cost of premiums.''
    The stress that climate change places on the built 
environment will only grow over time. We have a choice: invest 
and adapt, or pay an even higher price down the road.
    In the Cleveland area, the Northeast Ohio Regional Sewer 
District faces significant challenges meeting Clean Water Act 
standards. Like many older communities, Cleveland has a 
combined sewer system that, during heavy rains, often 
discharges untreated wastewater into the Cuyahoga River and 
Lake Erie. On average, the district discharges more than 4 
billion gallons of untreated sewage each year. In 2011, the 
district entered into a consent degree with the Environmental 
Protection Agency to make numerous upgrades to their system, 
including a combination of gray and green infrastructure.
    These public agencies responsible for managing the water 
infrastructure highlighted by these examples share one key 
characteristic. They don't need another credit card from 
Washington or to saddle taxpayers with expensive private equity 
through public-private partnerships. What these jurisdictions 
need is a strong Federal partner ready to provide direct 
funding.
    Proponents of public-private partnerships often state that 
there are billions of dollars of capital waiting on the 
sidelines. Implicit in this statement is that water agencies 
and other project sponsors face a lack of liquidity. This is 
simply not the case. Demand for public debt in the U.S. is 
robust. Moreover, the favorable tax treatment afforded to 
municipal bond investors means the public sector is able to 
secure municipal financing that is often three to five times 
cheaper than equity capital.
    Today the public sector has access to municipal financing, 
as well as Federal credit facilities like WIFIA and federally 
supported State revolving funds at historically low rates. 
Simply stated, for many cities and water utilities, access to 
affordable credit is not the binding constraint. Instead, there 
is a shortage--the shortage of local revenues to support new 
project debts.
    Many communities do not take full advantage of their 
capacity to generate additional revenue through taxes and user 
fees. However, even when they do, there are real limits on the 
total additional revenue they can reasonably generate, which 
often falls short of overall needs.
    Increased Federal funding is needed to grow our economy, 
ensure timely compliance with water quality mandates, as well 
as to deal with changes presented by climate change. These 
resources should be used to leverage additional State and local 
dollars where possible, and to target those communities facing 
the greatest need.
    Additionally, Federal funds should focus on those 
categories of projects that, all too often, take a back seat to 
traditional gray infrastructure, including efficiency upgrades, 
watershed restoration, and nonpoint source pollution 
mitigation.
    Thank you again for the opportunity to address this 
committee.
    Mr. Graves of Louisiana. Thank you, Mr. DeGood. I 
appreciate your testimony. We are going to go ahead and roll 
into questions, and I am going to recognize myself for 5 
minutes.
    Mr. Ellig, when I was reading your testimony last night I 
was really impressed with the thought process, and that you 
talked about appropriate metrics on regulations in ensuring 
that regulations are truly focused upon outcomes that are in 
the best interest of the American public.
    Just a few months ago, or a few weeks ago, we had 
bipartisan legislation that was included into the Regulatory 
Accountability Act, a bill that we had introduced last year 
called PROVE IT [Providing Retrospective Observations 
Validating Economics and Increasing Transparency]. And what 
that does is it requires that Federal agencies come back 5 
years after a regulation has been finalized to collect actual 
compliance information from stakeholders. Not predicting, but 
actually collecting real information, doing a look back, 
determining the impact of--the true impact of those 
regulations, and we were shocked to find that there was little 
in--required of agencies to actually go back and true-up their 
cost estimates on--in terms of the cost of compliance with 
regulations.
    Do you have specific examples of where you have seen 
regulations, or the regulatory process, improperly applied that 
you could say?
    Mr. Ellig. Well, I think some of the types of problems like 
that that I have seen, and that my colleagues at the Mercatus 
Center have seen in their research, involve barriers that maybe 
prevent better or more intensive use of some of the existing 
infrastructure.
    For example, several of my colleagues have looked into the 
issue of supersonic flight and found that one of the biggest 
barriers to supersonic flight in the United States is it is 
banned in the Continental United States. And this was because 
of a legitimate concern about noise, about sonic booms. But 
with advances in materials, advances in engineering, it may 
very well be possible to design airplanes--probably not as big 
as the Concorde--but design airplanes that can actually travel 
supersonic speeds while meeting a reasonable noise standard 
that protects the public. And that is the difference between 
focusing on outcomes versus just focusing on intentions.
    If we really want a regulation that focuses on outcomes, 
then have a noise standard that supersonic air transport needs 
to meet. Don't ban it, entirely. But those are the kind of 
barriers to innovation that we get when we just, you know, 
focus more on the process----
    Mr. Graves of Louisiana. Sure.
    Mr. Ellig [continuing]. Rather than getting results.
    Mr. Graves of Louisiana. Yes, thank you. And I think--I 
would love for you to give a clinic to Federal regulatory 
agencies to focus on outcomes and true interest to the American 
public.
    Mr. Inamine, I want to ask two questions. Number one, you 
talked about the 408 process. And certainly that has been 
something that I think Ranking Member Napolitano and I have 
both heard a lot of concerns about, just predictability and 
timeframes associated with that review process. While certainly 
it is important to ensure that we understand the impact of any 
project to Federal infrastructure, Federal water resource 
infrastructure, can you talk about the timeline of--and I know 
you mentioned 19 months, lightning speed, but the timeline of 
that decision, and what would have happened if it was approved 
faster?
    Mr. Inamine. So for that specific incident--I say 19 
months. It actually took much longer. And I want to point out--
this is not a hit piece on the Corps of Engineers. They are a 
really competent, well-meaning, smart people, people that are 
working on this 408 process. I think they are bound up in a 
very stovepiped organization, and it makes it very difficult to 
perform, because the outcome of this, as noted by a previous 
speaker, is public safety. It is very important. Most people 
are generally pointed in that direction.
    Now, with regard to 19 months, what had to happen was the 
Corps of Engineers, in order to set that world's record of a 
very fast 408 process, they had to split the project up into 
two pieces. We had a levee at the time, just prior to 
construction, that was suffering some internal erosion. We just 
found evidence of that just a year prior. It is the site of the 
historic 1955--very dangerous site. It was recognized as the 
highest priority, highest risk levee on that system.
    And so, staff--to their credit, Corps staff, to their 
credit--split the project into two pieces. But under the normal 
process----
    Mr. Graves of Louisiana. I have got 25 seconds left.
    Mr. Inamine [continuing]. We might still be waiting for 
that project to resolve.
    Mr. Graves of Louisiana. Last, very quickly, you are a non-
Federal sponsor with a project with the Corps of Engineers. Can 
you just tell me the percentage of cost that you, implementing 
the project on your own, as opposed to doing it with the 
Federal Government--you compare those two?
    Mr. Inamine. So we have--so we prepared--so we were 
completing a locally--State of California and locally funded 
project. It encompasses the vast majority of the parallel 
Federal project. And so, our costs have been roughly half of 
what the Federal cost estimate is to do it under the normal 
process.
    Mr. Graves of Louisiana. Thank you very much. I recognize 
Ranking Member Napolitano for 5 minutes.
    Mrs. Napolitano. Thank you all for your testimony today. 
And as I stated in the opening statement, my communities often 
approach me about the need for increased Federal funding. That 
is why I am conflicted by the statements of President Trump. 
One hand, he called for tripling the amount of funding the 
Clean Water and Drinking Water State Revolving Fund. We call 
that a win. On the other hand, the forthcoming infrastructure 
proposal is reportedly to focus solely on increased use of 
private financing to close our Nation's infrastructure gap. It 
won't work for many of my communities.
    Most recently we learned the President plans to cut the 
funding for EPA by close to 30 percent. It would have a 
devastating impact on the ability of my State and other State 
communities and communities to address the water quality 
challenges.
    Starting with the State revolving fund authority, Ranking 
Member DeFazio and I are planning to reintroduce legislation to 
finally reauthorize clean water SRF.
    To the panel, all of you, yes or no. Clean Water State 
Revolving Fund program is an important tool to address local 
water challenges. And would you urge this committee to 
authorize--reauthorize the program? Yes or no?
    Mr. Ellig. I would say yes and no, and use private capital 
when you can get it.
    Mr. McCarthy. I would encourage it be reauthorized. Again, 
the revolving loan fund provides that mechanism for financing 
for municipalities that sometimes just is not there, otherwise.
    Mr. Stine. On behalf of all States, we have several 
resolutions at ECOS that would say yes.
    Mrs. Napolitano. Thank you.
    Mr. Inamine. I will abstain, as the flood guy.
    [Laughter.]
    Mr. Kernion. I tend to agree with--that use a little bit of 
both----
    Mrs. Napolitano. When necessary.
    Mr. Kernion. Yes, ma'am.
    Ms. Pape. I would say yes, and certainly give access to 
private companies, as well, and marry it up with private 
funding, as well.
    Mr. DeGood. We strongly support the ranking member's 
proposal to reauthorize the SRF and to expand to $4 billion a 
year.
    Mrs. Napolitano. Thank you. Many of you directly utilize 
programs of--or funding provided through the EPA. What would be 
the impact of a 30-percent cut in these programs to the ability 
to meet your local needs?
    Mr.--let's see, Mr. Stine?
    Mr. Stine. Thank you, Mr. Chair, Mrs. Napolitano. The 
States have been working with the EPA and with OMB in the last 
3 weeks to understand the magnitude of the cuts. At this point 
we have not seen the actual programmatic budget line items that 
are proposed.
    However, a 30-percent reduction in the State and Tribal 
Assistance Grants, which include a variety of sources of 
revenue that States rely on for implementation of our basic 
water and air protection programs, as well as brownfield and 
superfund sites, would cut across approximately 15 to 25 
percent of most State programs.
    Mrs. Napolitano. Thank you. Last week, Mr. Stine, the 
Environmental Council of the States submitted a letter to Mr. 
Trump and the administration on proposed cuts, which I ask 
unanimous consent to include in the record.
    Mr. Graves of Louisiana. Without objection.

    [The information follows:]



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   Mrs. Napolitano. In this letter you state the cuts to EPA 
budget ``will have profound impacts on States' ability to 
implement the core environmental programs as expected by our 
citizens,'' including clean water programs and State permitting 
programs. Can you elaborate a little more?
    Mr. Stine. Mr. Chairman, Mrs. Napolitano, yes. That is a 
statement that builds on my previous statement, which is States 
use the funds to leverage existing programs at the State level. 
For example, our clean water and drinking water revolving loan 
programs are matched in the State of Minnesota by capitalized 
bonds that the State issues to leverage the Federal dollars. So 
that would be one specific impact in my State.
    But when you look at how States fund their existing 
environmental protection programs, whether it is air, land, or 
water, all of the States utilize Federal funds across a suite 
of activities. It is too soon to say what the direct impacts 
would be, but they would be, as I stated in the letter, 
profound.
    Mrs. Napolitano. To Mayor McCarthy, while not a direct 
focus of the hearing, I too support the EPA's brownfield 
program. That is why I am concerned to read the President may 
propose to eliminate all Federal funding for brownfield. Is 
that a proposal you would support?
    Mr. McCarthy. No. I would encourage, you know, Congress 
represents the State level to look at those options, to 
remediate brownfields, to do conversions that bring them back 
as productive pieces of real estate.
    Schenectady, my testimony reflects--the testimony submitted 
reflects an old brownfield site, which was the American 
Locomotive Works in the city of Schenectady. It sat there for 
50 years. It was abandoned, underutilized, really an 
embarrassing piece of real estate. Everybody was afraid that it 
was beyond salvage.
    When we actually got in and worked through in a systematic 
process, the remediation was not that--or the problems weren't 
that bad. We were able to put there--now there is a--we just 
opened a new casino, which is a $300 million project. We have 
underway a $150 million mixed-use housing project going 
immediately adjacent to the Mohawk River.
    And so it shows that, again, working together, we are able 
to take that site that people had really ignored, and make it 
really an asset, not only for Schenectady, but the region.
    Mrs. Napolitano. Congratulations, sir. Thank you, Mr. 
Chair.
    Mr. Graves of Louisiana. Thank you. We are going to go to 
the chairman of the full committee, Mr. Shuster, for 5 minutes.
    Mr. Shuster. Thank you, Mr. Chairman.
    Ms. Pape, I appreciate your testimony. Besides upsetting 
the Botox world----
    [Laughter.]
    Mr. Shuster [continuing]. It was fantastic, fantastic 
testimony, and I think a great example, too.
    When I talked earlier about private-sector dollars, I think 
the water systems, wastewater, clean water, is--this is an 
option for us. And only 2 percent--I think was your testimony, 
you said--of water systems are operated by companies like 
yours. Do you see that growing? Do you see people coming to you 
more and more, saying we need to use the private-sector 
solution?
    Ms. Pape. Sir, we have certainly seen it more and more as 
municipal governments, especially, have dealt primarily with 
underfunded pension issues.
    Mr. Shuster. Right.
    Ms. Pape. They have looked around and just tried to decide 
what assets can we sell. Scranton, Pennsylvania, is one that we 
recently acquired at the end of 2016.
    Mr. Shuster. And you always buy them? Do you lease them, 
or----
    Ms. Pape. We always buy.
    Mr. Shuster. Always buy.
    Ms. Pape. And I would like to explain one of the reasons 
why, because it goes to the affordability question. One of the 
methods we have in Pennsylvania is that we can spread the cost, 
the expenses and the capital cost of our assets, over our large 
base of customers, which is 700,000 in Pennsylvania. So we can 
use that law when we acquire assets. We couldn't use it if we 
leased.
    Mr. Shuster. And your rates, when they go up, do you do 
that by yourself, or you have to consult with somebody to----
    Ms. Pape. The rates have to go through the Public Utility 
Commission----
    Mr. Shuster. Right.
    Ms. Pape [continuing]. Through a long 8-, 9-, 10-month 
process. Again----
    Mr. Shuster. So there is protection for the citizens if 
you--somebody saying, ``Oh, that is a private company, they are 
going to jack our rates up.'' Because one of the biggest 
challenges I face in my district, a rural district, a high 
senior population, incomes declining, and half the district 
flows into the Susquehanna, which is the Chesapeake water--and 
which causes us a lot of problems with water.
    So again--and I have many, many water systems, old systems 
that, you know, we have tried to push them this way. But it is 
a challenge to get them to consider this, because they are 
afraid they are going to give up their water, and not have any 
kind of control over it. So I appreciate what you are doing. 
And I would like to see more examples, because I have seen 
the--many examples where you are rebuilding their systems, and 
their rates have not gone through the roofs. In fact, some 
cases they stay relatively stable, so----
    Ms. Pape. We do have a customer assistance program also for 
people who cannot pay the rates.
    Mr. Shuster. Thank you.
    Mr. Ellig, have you seen any examples of good governance 
in--when it comes to these regulations, in either the U.S. 
Government or in foreign governments that you can point to to 
say this is how it should run, this is how we see it, so we can 
use it as examples to demonstrate to other agencies that there 
are cases where this can be done?
    Mr. Ellig. Yes, let me highlight one example. One of the 
things that I have spent a lot of time looking at is how well 
Federal regulatory agencies account for costs. And typically, 
what they do when they are issuing regulations, most of the 
agencies that do a good job, they are still only counting 
compliance expenditures as a measure of cost, and not looking 
at broader costs to society. And some of those costs have been 
mentioned here. In general, agencies are not good at taking 
account of the costs that arise when regulations make people 
wait for stuff.
    Now I am going to give you the good example. The good 
example is, the U.S. Department of Transportation is actually 
better at this than most, maybe because it is transportation, 
and they realize that waiting time and transit time are 
important. And so, I will single out USDOT as being pretty good 
at trying to take into account the effects of making people 
wait when it is issuing regulations. And they actually have 
values that they ascribe to people's travel time and waiting 
time. So that is a good practice that a lot of other agencies 
could learn from.
    Mr. Shuster. It is good to hear there are some good 
examples. I would like to continue talking to you in this 
discussion to try to identify more and more of these types of 
good programs that are out there.
    A final question to the mayor. You are under a consent 
decree. One hookup for every four you have to de-hookup. What 
is--why--what is the ratio? Who came up with that, and what is 
the sense in that? I don't----
    Mr. McCarthy. In New York State we work with the New York 
State Department of Environmental Conservation, which acts as 
the EPA's representative. And it was the terms that they put 
forth on the city to enter into the decree and move forward. 
And we want to remedy the problem, where we have the outflow, 
but that is the terms that they gave us.
    Mr. Shuster. Right, but what is it based on, just their--
they just pulled it out of the sky and said, ``one to four 
sounds good to us''? Because it sounds to me like, from your 
testimony, it causes you a lot of harm.
    Mr. McCarthy. We have right now a project where--it is an 
old industrial city. We have--a number of partners have come 
forth within the community, and we are doing a new construction 
housing project, fair market, within the city. We are having 
trouble getting the approval to be able to hook those houses up 
within the city of Schenectady to handle the wastewater because 
of the consent order.
    And over--we are permitted at 18.5 million gallons a day. 
Our average now is running about 11.8 million last year. And 
over the last 7 or 8 years, we have reduced the flow within our 
systems by about 4 million gallons a day, through dealing with 
I&I [inflow and infiltration] issues. So we have tried to do 
that. But again, it is that regulatory environment that 
sometimes logic just is not part of the discussion.
    Mr. Shuster. I went over my time, Mr. Chairman. Thank you 
very much for letting me.
    And you mentioned the important word, because my father 
keeps staring me on the wall. He would always say that people 
come in his office--when you start talking logic, he says that 
is the greatest sin in Washington, DC, is to think logically. 
So I think all of you are sinners at the table today.
    Mr. Graves of Louisiana. Thank you, Mr. Chairman. We are 
going to go to the gentlewoman from Illinois, Mrs. Bustos, for 
5 minutes.
    Mrs. Bustos. Thank you, Chairman Graves and Ranking Member 
Napolitano. I appreciate you holding this hearing. And I also 
want to thank all of our witnesses for being here today.
    In Illinois--I represent the northwestern region of 
Illinois--we have a real problem. Our aging water 
infrastructure is inefficient and can even put public health at 
risk. On top of that, we know that our fix-as-fail approach to 
locks and dams puts our growers and manufacturers, as well as 
the navigation industry, in a guessing game of whether they 
will be able to deliver to consumers on time. So, simply 
unacceptable.
    When we invest in our water infrastructure we create good-
paying jobs, protect our public health, and help get goods to 
market more efficiently. There is no reason we shouldn't work 
together to make sure our country's water infrastructure 
programs work for users and help address the massive backlog 
many of our communities face.
    So, again, my district, northwestern Illinois, live along 
the Mississippi River. The Illinois River runs through the 
southern part of my congressional district. So locks and dams 
are absolutely critical. So when I think of the water 
infrastructure, certainly I also think of water lines and the 
Clean Water Act. But in my district we also, as I said, think 
about navigation.
    So, for the panel, is anyone here prepared to discuss the 
navigation infrastructure on our rivers? And just wondering if 
that is something that any of our panelists would care to 
address. And that can be addressed to any one of you. Anybody 
want to volunteer for that?
    Mr. DeGood. I would go ahead and just say that I think, as 
part of a broader infrastructure package, that inland 
navigation has to be a part of that. And we support efforts to 
try and take both the Harbor Maintenance Trust Fund and Inland 
Waterways Trust Fund off budget, so that the full amount of 
revenue that is paid in by users through excise taxes on barge 
fuel and through the goods that are moved through our ports can 
be put to good use constructing the kinds of projects and 
making sure that the number of days that locks and dams are out 
of service due to maintenance and delays goes down.
    Mr. Stine. Mr. Chairman, I am just going to speak to one 
project that I am familiar with in my role on the Great Lakes 
Commission, which is the replacement of the Soo locks, which is 
a critical piece of infrastructure, vital to the economy of the 
Great Lakes. Our harbor of Duluth and Superior in Minnesota/
Wisconsin is a key piece of the national infrastructure, 
creates a vulnerability in our processing of goods and services 
across the Great Lakes, St. Lawrence Seaway, and that is one 
critical project that the Great Lakes Commission has passed 
resolutions supporting and has spoken up clearly on.
    So that is in a different hat that I wear on a different 
day. I will be back next week on behalf of that organization.
    Mrs. Bustos. Anybody else have anything to add on that 
topic?
    [No response.]
    Mrs. Bustos. All right. So this one I will address, Mr. 
Stine, to you. And then also, Mayor McCarthy. You guys had 
mentioned the State revolving funds in your testimony. It has 
been really important to my congressional district. The Clean 
Water State Revolving Loan Fund has been an invaluable resource 
in our area. We have got--including an $11 million sewer 
improvement project that wrapped up last year in a town called 
Rock Island, Illinois.
    Also, in a community called Galesburg, in my congressional 
district, incredibly important to replace about 2,000 solid 
lead lines that are going to people's homes from the water 
main. And so very important.
    Wondering if you have thoughts about the demand for these 
revolving loans, and whether the demand is outpacing what 
Congress provides annually in appropriations for that fund.
    Mr. Stine. Mr. Chair, Mrs. Bustos, yes, the demand far 
outstrips the available funding. States apply various 
approaches to leverage those dollars through their own 
resources. But the need is somewhere in the area of a couple 
hundred billion dollars over the next 5 years. Just for 
drinking water systems alone, it is probably $300 billion over 
the next 15 years. And as for clean water and wastewater 
infrastructure, the appropriations through the revolving funds 
are a significant source of revenue for States and local 
communities to meet those needs.
    Mrs. Bustos. Mayor McCarthy?
    Mr. McCarthy. Thank you. It is really critical for a lot of 
municipalities, and also smaller levels of Government, where 
the revolving loan funds--you know, New York you also have a 
set of expertise from that side, where they are doing unique 
projects that are in water and wastewater, so that they add a 
little bit of value to the community. And the no-interest and 
low-interest loans are, again, sometimes deal-makers in terms 
of allowing communities to go ahead with the projects, to meet 
the regulatory requirements that we are all dealing with.
    So I would encourage Members to look at funding those at 
levels that provide adequate resources for the local 
governments.
    Mrs. Bustos. All right, thank you. And I have used up my 
time. I yield back, thank you.
    Mr. Graves of Louisiana. Thank you. And I am going to turn 
to the former chairman of this subcommittee and mentor, Mr. 
Gibbs from Ohio, for 5 minutes.
    Mr. Gibbs. Thank you, and I want to congratulate Chairman 
Graves on your new position. I look forward to working with you 
in the majority.
    Anyways, Mr. Ellig, it is really refreshing to hear 
somebody talking about challenges we have with regulations. And 
your comment about the--some of our agencies using research to 
support their agenda, and then also using the media or social 
media--I can think of one example, and that was the United 
States rule that was pushed through I think was biased. Would 
you agree that that was an example of research that--to drive 
an agenda, a political agenda? And the----
    Mr. Ellig. Oh, yes. I am aware of that example, and it was 
highly controversial. I think, from my perspective, the bigger 
problem is when you have agencies that are supposed to be doing 
objective analysis, and then that gets turned into something 
that is supposed to be used for advocacy, rather than something 
that is supposed to inform decisions.
    Mr. Gibbs. Mayor McCarthy, thank you for referencing my 
integrated planning permitting bill. I really appreciate the 
support from the Conference of Mayors.
    Can you elaborate a little bit on your consent decrees? You 
know, this permitting planning bill, you know, it is really to 
develop a long-term plan and set benchmarks on goals. But when 
you are on a consent decree and under the restrictions of the 
permit, how is that--on hindering--is it--on the cost side, 
what would this bill--how would it really help you on the cost 
side?
    Mr. McCarthy. Our--some quick background on the overflow 
that we are dealing with is a valve in the city of Schenectady 
that we----
    Mr. Shuster. Can you pull the mic closer? Pull the mic 
closer to you a little bit----
    Mr. McCarthy. I am sorry. It is a valve in the city of 
Schenectady that we would open two or three times a year for 
hours during the day to handle high-water events. And that is 
the decree that we had to enter into. It is, you know, $14 
million that we are addressing to remediate that.
    We want to stop the outflow. But again, the cost and then 
the criteria where you have the 4-to-1 offset, it is very 
frustrating. We are taking an old, industrial city, we have got 
a lot of good things happening, we are seeing new investment, 
we are seeing people view the community differently. It is the 
birthplace of GE celebrating its 125th anniversary as a 
company. They are looking at opportunities within the 
community. And the 4-to-1 is, again, extremely restrictive.
    And where we have met all the other criteria--we have 
taken--we are permitted at 18.5 million gallons a day. We are 
only running about 11.8 million. And the last 4 years, through 
management, we are reducing the I&I inflow into the system. We 
have reduced that by about 4 million gallons a day. And if I 
would be able to----
    Mr. Gibbs. Yes, but having a longer framework than 5 
years--the permit is 5 years, I believe, that--you know, set 
benchmarks that reach that.
    Are you under--being fined in this consent decree, or not?
    Mr. McCarthy. We have not--well, there is always the threat 
of being fined. But we are, again, working in a manner where we 
have entered into the consent decree. We have negotiated with 
it, and trying to remediate the issue and again move forward so 
it is in everybody's best interest, even though the terms are 
frustrating to try and manage a city on a daily basis.
    Mr. Gibbs. Mr. DeGood, you brought up Cleveland and their 
challenges of having--I am from Ohio. The integrated planning 
permitting bill, how would that--in your instance, you brought 
up Cleveland. Would that be a benefit to them? Can you expound 
on that?
    Mr. DeGood. Well, I think it is important to note that, in 
the Cleveland example, they signed on to that consent decree in 
2011. And the program of projects that they put forward that 
the EPA agreed to includes a combination of gray and green 
infrastructure. So I think we are supportive, broadly, of the 
concept of integrated planning. But it is not necessary for 
that legislation to be passed for people to be able to use 
green infrastructure as part of a consent decree.
    I think our only concern with the legislation as is 
currently drafted is that some of the language comes 
precariously close to allowing affordability to be a mechanism 
by which we actually are reducing or weakening the limitations 
that we would normally put into our NPDES permitting processes. 
And I think, for us, that is probably a break point.
    Mr. Gibbs. My intent is really for the EPA and the local 
entities, districts to work together to come up with a long-
term solution. Because the problem you have, they can't charge 
the ratepayers enough, they can't always do everything at once, 
and give them that flexibility. But if you--a long, multiyear, 
long-term plan and set benchmarks, and you can get there.
    Mr. DeGood. Sure.
    Mr. Gibbs. I think that----
    Mr. DeGood. In the Cleveland example, they signed a 25-year 
agreement. So I think, you know, the EPA was cognizant of the 
fact that Cleveland had financial restrictions, and that the 
level of improvements that they were asking for were 
substantial enough that they went ahead and gave them what, at 
the time, was one of the longest consent decree implementation 
windows that had been ever given. So I think the EPA is aware 
of those challenges that local districts face.
    Mr. Gibbs. Thank you, Chairman. Time is up.
    Mr. Graves of Louisiana. Thank you. I recognize Mrs. 
Lawrence for 5 minutes.
    Mrs. Lawrence. Thank you, Chairman and Ranking Member, for 
this opportunity. Thank you all so much, panel.
    I am--I represent the--a part of Michigan. And so the Flint 
water situation was something that was extremely emotional, and 
something that has reconfirmed my commitment to clean water in 
America, and protecting our families and our health through 
water.
    Months after warning signs, the water in Flint, Michigan, 
as you know, did not meet the levels of--in lead that would be 
healthy for children in a city that depended on that. A man-
made disaster is a tragic outcome.
    We have found that in September 2016 the U.S. GAO released 
its study of water infrastructure for selected mid-sized and 
large cities with declining population, and it was alarming, 
what they found. They found many of them have lost a 
substantial percent of their population, as you mentioned, 
Mayor. And, because of that, they are seeing declining 
revenues, which makes it difficult to address the 
infrastructure needs. And in our investigation of Flint we 
found the finance and revenue of maintaining a water system was 
part of the equation that was used to make a very unfortunate 
decision.
    So my question is to you, Mayor McCarthy. In your written 
statement you talk about how your city is not atypical. It is 
older, it is industrial. I know a thing or two about that, 
being a mayor, myself. Can you talk about the water and 
infrastructure challenges in cities? Because you hear, as--U.S. 
Conference of Mayors.
    And if any other member wants to talk about that, because 
it is important that, as we move forward with the matches that 
we are talking about, that is the challenge--that we are very 
clear on investment in water infrastructure is not a luxury or 
a pretty thing, it is a necessity.
    So, Mayor, please.
    Mr. McCarthy. Thank you. The water in wastewater systems 
are key, in terms of basic quality of life, and then also, 
trying to rejuvenate and reinvigorate older communities. You 
want to be able to attract people there, you want to attract 
business, and you have to have those systems in place. We want 
them to maintain and be able to produce the highest quality 
water, treat wastewater.
    But the numbers, to be able to finance those systems, are a 
lot of times a burden on the community, and it comes a point 
where businesses, families, individuals choose to live in other 
places, as opposed to the older urban areas that you have some 
of the infrastructure in place that really just needs to be 
upgraded and modernized.
    Mrs. Lawrence. So I know in Flint--and you are seeing it, 
too--is economics. It is housing, and it is also--builds a 
community or--but most of all, it is a health component. Some 
people say quality of life. It is a necessity.
    Mr. McCarthy. Absolutely.
    Mrs. Lawrence. OK. Anyone else want to comment on that?
    [No response.]
    Mrs. Lawrence. Mr. DeGood, in your written statement you 
talk about the need for sound regulations such as the Clean 
Water Act, which restores and maintain the chemical and 
physical integrity. Are the regulations the reason we have a 
crisis in our water infrastructure in America today?
    Mr. DeGood. I think the answer to that is a resounding no. 
I think we have a crisis of underinvestment that is, in some 
cases, a shared burden for locals in the Federal Government.
    There are certainly places where we can point to where 
water services are underpriced. And I think, rather than trying 
to point to the regulations that we ask EPA and our State 
partners to enforce as being the problem, what we need to do is 
put some additional money on the table.
    I think what the construction grants program--from the 
original 1972 Clean Water Act--demonstrates for us is that when 
the Federal Government shows up with resources, often times 
local elected officials find the courage to raise money 
themselves. That is not always the case. There are certainly 
communities that are so economically challenged that you need 
to have different matching requirements and an understanding 
and a sensitivity to that.
    But those initial construction grants were, for the most 
part, a 55/45 Federal/local match. So our local communities 
stepped up and did what was asked of them. But I think, when 
you are faced with a bill and somebody is telling you it is all 
on you, go ahead and borrow the money, go ahead and do a P3, 
that is really not the answer.
    Mrs. Lawrence. Thank you. I want to close with this. In 
America we are going to start seeing water affordability being 
an issue in our cities, because we have to fund them, we have 
to provide safe, clean water. And when cities step up to make 
those investments, they have to get the revenue. And water 
affordability is going to be a issue we are going to talk 
about.
    Thank you. I will yield back.
    Mr. Graves of Louisiana. Thank you. Next is the gentleman 
from Pennsylvania, Mr. Smucker. Five minutes.
    Mr. Smucker. Thank you, Mr. Chairman. As a member of the 
Transportation and Infrastructure Committee, but not a member 
of this subcommittee, I appreciate the opportunity to be here 
this morning. Thank you for allowing me to do that.
    I specifically want to highlight an issue that is important 
in the district that I represent in Pennsylvania, the 
Chesapeake Bay watershed.
    Mr. Ellig, this was brought up earlier by Mr. Gibbs. And I 
appreciated, as well, your testimony in regards to the--some of 
the problems with our regulatory process which produces 
undesirable results at times. And specifically for our 
community, the interpretation of the EPA in regards to wOTUS, 
Waters of the U.S., and the extension of what is considered 
waters of the U.S., is a major problem.
    This was also briefly mentioned by Mr. Kernion. I was a 
contractor, as well, and so I understand the impact on 
development projects of interpretation of that law.
    But the Pennsylvania Farm Bureau president, Rick Ebert, 
noted after President Trump's Executive order that virtually 
all of Pennsylvania's land mass can be claimed by EPA officials 
as regulated water, subjecting land owners and communities to 
extreme and needless Federal permitting requirements and land 
use restrictions.
    These farming groups have also claimed that if they were to 
dig a drainage ditch on their property, it would potentially 
become a United States waterway under the WOTUS provisions. 
This is an example that I think--some of what you were 
describing--of an overreach of regulations.
    So, Mr. Ellig, I just--you know, how is it, if we have a 
regulation like that in place, how could groups go about trying 
to find a better balance between the goal that we want to 
achieve and that overreach?
    Mr. Ellig. Well, yes. I understand why this is a difficulty 
for development. Also, for farmers in Lancaster County. I think 
we have to go back to basics and insist that our discussions of 
regulation be based on actual fact, and investigation of 
whether regulations really are likely to create the intended 
benefits, and whether they actually do, after they have been 
implemented, create the intended benefits.
    Because, unfortunately, an awful lot of the debate over 
regulation, particularly environmental regulation, has become 
kind of a holy war, where everybody argues on the basis of 
their intentions, rather than what actually happens as a result 
of the regulation.
    Mr. Smucker. Thank you----
    Mr. Ellig. So I would say, first things first, let's get 
back to factual investigation of what the actual likely results 
and the actual----
    Mr. Smucker. Thank you----
    Mr. Ellig [continuing]. Results of regulation----
    Mr. Smucker [continuing]. Thank you, and completely agree. 
One of the other points you made, which I thought was very 
good, you said regulatory agents often act as if enforcement is 
more important than compliance or achievement of regulatory 
outcomes.
    And just recently, farmers in the Chesapeake Bay watershed 
did a voluntary study and highlighted some of the actions that 
have already been taken, for which they are not recognized. So, 
for instance, 475,800 acres of nutrient manure management; 
97,562 acres of enhanced nutrient management; 2,164 animal 
waste storage units; 2,106 barnyard runoff control systems. You 
can go on and on.
    And the point I want to make is what farmers in my area 
want to see is more collaboration and less enforcement. Why can 
we not see that occurring by some of our agencies?
    Mr. Ellig. Well, you would get that if agencies were 
rewarded--individual agencies were rewarded for actually 
achieving results, rather than for achieving outputs or 
activities that are measurable--that may or may not produce 
results.
    Mr. Smucker. And again, additional point to make is 
farmers, builders, contractors, the municipalities in my area 
want to see clean water. They all enjoy clean waters on their 
farms. They want the Chesapeake to be clean. But again, they 
want to see more of that collaboration, which, I think, is 
sorely missing.
    So I--again, I appreciate your comments. I know we have 
taken the first step in this regard with the President's 
Executive order. And I know that this is of concern to the 
chairman of this subcommittee, as well, and I look forward to 
us continuing to work on this issue. Thank you.
    Mr. Ellig. Thank you.
    Mr. Graves of Louisiana. Thank you. We are going to go to 
the gentleman from California, Mr. Lowenthal, for 5 minutes.
    Dr. Lowenthal. Thank you, Mr. Chair and Ranking Member 
Napolitano. I am honored to join you as a new member of the 
Transportation and Infrastructure Committee, and the Water 
Resources and Environmental Subcommittee. I look forward to 
working together to improve the work of the Army Corps, to 
protect the Clean Water Act, and to build upon its successes, 
and that we craft a robust and equitable Water Resources 
Development Act. I want to thank you for convening this 
hearing, and for the people on the panel, for highlighting the 
importance of water resources and the relevant Federal agencies 
and the role they play in our Nation's infrastructure.
    First question I have is for Mr. DeGood. Recent reports--
and certainly not--we are not clear yet, but they seem to 
indicate that President Trump plans to propose devastating cuts 
to the EPA's funding and staff levels. Several of its most 
important programs may face elimination all together. Your 
testimony, and the written testimony, highlighted the 
importance, the enormous importance of the EPA to communities 
across the country, from protecting clean water infrastructure 
to safeguarding public health.
    What do you think that these cuts that we have been at 
least hearing about to EPA would mean for the Federal 
Government's efforts to maintain and improve clean water 
infrastructure?
    Mr. DeGood. So I think I would make three points to that 
question.
    One, we have had a lot of talk already this morning about 
frustrations that people have--I think often legitimate--with 
the length of permitting processes. I think when you are 
talking about potentially a 30-percent or greater cut to EPA's 
budget, you are talking about eliminating many of the 
positions, many of the people whose job it is to try to review 
these applications and to provide timely determinations. So, if 
our goal here is to give people greater certainty and to speed 
those processes up, I don't see how cutting Federal staff and 
Federal budgets are going to do that.
    But I think, more importantly, we really undermine our 
long-term productivity and long-term community health. As just 
one example, the section 106 grants program provides money 
directly to States to allow them to do the very implementation 
work of things like the Clean Water Act, right. This is 
monitoring and assessing water qualities, developing water 
quality standards, determining total maximum daily loads, 
ensuring compliance, taking enforcement actions. This is really 
the core of laws like the Clean Water Act. We hand off to 
States to do that work. And when we take money away through EPA 
budget cuts, we take away their ability to enforce those laws.
    And the last thing I will note is about the brownfields 
program. These are very productive dollars. And it comes down 
to a question of efficiency, and it comes down to linear 
infrastructure. If you allow a parcel that has been polluted 
over time through a prior industrial use to sit idle, and you 
go out and you have to build new infrastructure--that is water, 
that is sewer, that is roads, stop lights, all the things that 
go along with that--to try to attract new housing or new 
commercial development, you are creating additional facilities 
that you are going to have to try to maintain for decades into 
the future.
    When we remediate parcels that have existing pollution, 
what we are really doing is creating a pathway for future 
economic development at that site that will generate tax 
revenue on top of existing infrastructure. It is not something 
we have to go out and build new. So we are really cutting off 
our nose to spite our face when we talk about zeroing out the 
brownfields program.
    Dr. Lowenthal. Thank you. Next question I want to clarify 
something that I am not really clear on.
    Mr. Kernion, you brought up the issue of funding for 
Federal water agencies. And we have heard already of the 
backlog the Army Corps has for authorized but unconstructed 
projects, which--where the valuing is estimated at over $56 
billion.
    Now you talked about--in your written testimony, 
especially--that environmental review processes have played a 
major role in some of the backlog, or holding up the process. 
But we also heard from the opening statement from Ranking 
Member DeFazio that the Corps budget cannot deal with the 
backlog. It is not only--or it is not really the burdensome 
regulations that are leading to the backlog, but the lack of 
funding for the Army Corps.
    Could you kind of deal with this relationship and where you 
see this relationship between the funding and also the 
regulations?
    Mr. Kernion. Personally, I have seen both. And I am just 
speaking offhand. I have worked for--as a contractor for the 
Corps of Engineers now for over 30 years. And I have seen quite 
a bit of the both take place. In waiting on funding, I have 
seen projects shut down because they didn't have funding, where 
they have actually gone to contractors and said, ``Look, in 
order to keep going, you have to finance your project, or stop 
and take the brunt of it until we get more money appropriated 
for the project.''
    I have also seen the environmental things which I alluded 
to when I spoke about before. One of the biggest things that I 
have seen personally it wetlands issues. Now maybe EPA issues 
in other States--of course, where we are, it just seems like it 
is more wetlands.
    Congressman here talked about diverting water. Every time 
you divert water, it is not opening up another waterway, but, 
uh-oh, is that water going to go to an area that is now going 
to become a wetlands, and it is not dry--it is now dry, but you 
run water through it, it might be wet, and then you can't use 
the land again.
    And so, I have seen, actually, both of them. I don't know 
if I am answering your question right, but that is my personal 
experience with it.
    Dr. Lowenthal. Thank you, and I yield back.
    Mr. Graves of Louisiana. Thank you. Next we are going to go 
to a gentleman from Illinois, Mr. Davis.
    Mr. Davis. Thank you, Chairman Graves. Congratulations. I 
had a quick question for you that--you know, I kind of injured 
my finger on the chair, scooting my chair in earlier. Do you 
think the Corps could use some investigations money in their 
account to help me get to the bottom of why you have tried a 
conspiracy in your first hearing to attack my finger? I mean 
this is just outrageous.
    Mr. Graves of Louisiana. I think the Corps would love to 
investigate that.
    Mr. Davis. First off, it is great to have Chairman Graves 
and the Water Resources and Environment Subcommittee here, and 
I appreciate all of the testimony. We are all in the same boat. 
We all want to see infrastructure built in this country.
    Mr. Stine, you mentioned that the Mississippi River starts 
in Minnesota and ends in Louisiana. Well, you know what? It 
digests through Illinois. And our navigation system and the 
infrastructure that it needs to continue to keep our navigation 
system moving from north to south and south to north is right 
in my district. So it is imperative that we see action.
    And that is what we haven't seen. Twenty years ago I saw 
which plan the Corps was going to use to update the locks and 
dams in the Illinois and Upper Miss systems, and we have seen 
nothing since then, except the plan that they wanted to use. We 
see no investment. And we have seen, from the last 
administration, since 2010, that we have invested nothing in 
NESP to try and upgrade those antiquated systems. So we have 
got to have the progress in the middle of your area and his 
area to ensure that our products get from point A to point B 
and out into the global marketplace.
    That being said, Mr. Kernion, great to see you again. We 
met last night. One of the things that I proposed in the last 
WRDA [Water Resources Development Act] bill was to require a 
GAO study to study alternative models for management of the 
Inland Waterways Trust Fund, including a possible not-for-
profit corporation or Government-owned corporation that would 
actually put us on a path to have a continuous funding source 
for doing what the Corps of Engineers should do, and has done 
well in the past. That is to build infrastructure and design 
infrastructure. Seems pretty simple to me. Seems like sometimes 
over the last few years they may have lost their mission.
    That being said, you are a builder. What would more 
certainty, faster project delivery of navigation projects for 
someone like you, what would that mean to your employees? And 
what would it mean if we had a continuous funding source that 
industry could utilize to actually do what the Corps should be 
doing, build things?
    Mr. Kernion. Well, I am going to answer it like this. I 
think the Mississippi River, if you look at it, is probably--
and you compare it to a human body, it is one of the largest 
arteries, or the largest artery in the body. And at that point 
I believe you have to do everything you can to keep that river 
flowing, keep it from overflowing, and keep commerce up and 
down that river, because commerce is as important as anything.
    One of the things talked about is dredging the river deeper 
to get the Panamax ships into the river. If that was done, we 
would actually get--more commerce going up and down the river 
would flow, and it would be a different way to run, you know, 
goods through that artery.
    At the same time, the river is treacherous and is deadly. I 
have seen the river do some devastating things. I didn't 
realize water was as dangerous as it could be until I had a 
levee break years ago--I tried to stop it--after a hurricane, 
and it is brutal, what it can do and the damage it can do to 
people.
    But also, and what you had alluded to last night, was 
getting the projects funded for up there. For us, of course, we 
are 100 percent behind that. We would love to see it happen. 
The more projects up and down the river, we are happy. I was 
last year's president of Mississippi Valley--Mississippi River 
Valley's Associated General Contractors, and a lot of the 
contractors in our district work on that river, and they depend 
on getting the funding to build that infrastructure.
    Mr. Davis. Well, a lot of the contractors in my district 
work on that river. And you are absolutely right, we have got 
to have some movement.
    And I don't have much time left, and I know the chairman, 
he is not going to give me any extra time. So I want to make 
sure you--the witnesses know my opinion. You know, I think a 
body resembling the inland waterway users board and including 
other key stakeholders like many of you at this table, 
including Government representation, like the Corps of 
Engineers, would do a much more efficient job of identifying a 
project schedule and making expenditures to priority projects 
that have already received approval from Congress.
    After all, you guys are the people paying for the projects, 
right? Let's actually make sure they get done.
    And, with that, I have got about 2 seconds left, and I am 
going to yield it back, Mr. Chairman.
    Mr. Graves of Louisiana. That is impressive efficiency. 
Thank you, Mr. Davis.
    With that, we are going to yield to the gentlewoman from 
Connecticut, Ms. Esty.
    Ms. Esty. Thank you, Chairman Graves and Ranking Member 
Napolitano. And thank you to the entire panel. Many of us are 
bouncing between committees. I have got all three of mine going 
simultaneously at this hour.
    A couple of quick comments. To Mr. Stine, greetings from my 
husband, former commissioner of DEEP in Connecticut, and thanks 
for the good work ECOS does, in having grown up, in part, in 
Winona.
    To Mr. Kernion, father and grandfather, both AGC 
contractors, and my grandfather built locks and dams on the 
Mississippi River. So some experience with that.
    To Mr. Inamine, I grew up in northern California, in part. 
Very familiar with the Feather River and challenges there.
    So, to Mr. Ellig, I want you to know that there is support 
on both sides of the aisle for focusing on technology and 
outcomes. And I think it is vitally important, with constrained 
budgets, having been a local town council member, State 
representative, and now in Congress, we have got to figure out 
how to be faster and more efficient. And I appreciate you 
flagging time as a real cost. And that is something we really 
need to focus on, and I think we need to streamline our systems 
and get better outcomes with less time, and free up those 
resources to actually be spent on getting the outcomes.
    I wanted to turn to the issue of brownfields. And I think 
Mr. Katko is going to join me on that. We have legislation we 
are putting back in in this Congress. We need funding and to 
really focus on the vital importance of that, and rebuilding 
communities.
    And it is actually related to some of the issues Ms. Pape 
raised, too. If we don't get the funding in those communities--
and I represent Connecticut, I have got cities like Waterbury, 
Connecticut, which has major parcels of land right in the 
middle of downtown. If we don't rehab those, we are not going 
to be able to create jobs, we are not--we are going to be 
chewing up farmland elsewhere. So it is bad for the ecology of 
other communities. And, frankly, we are not going to have the 
jobs.
    So I would like, if you could, Mayor, if you can talk a 
little bit about how important brownfields are for 
revitalization of our communities, and which of the grants that 
are most important to you. Because, again, if we are looking at 
a 25-percent or anything like that kind of cut, we are going to 
be really challenged in figuring out how to work through that 
backlog on brownfields.
    Mr. McCarthy. Thank you. Brownfields, as you point out, 
they are underutilized, they are a negative influence on 
communities. And they have, largely, a proud history. There was 
something there at one time that added value. For whatever 
reason, it is no longer there. And so you have to have the 
tenacity and the systematic approach to work through whatever 
the problems may be.
    And a lot of times people will--they think that you can't 
solve the problem. But you can. And it is--requires the 
partnership that State, local, Federal-level, the private 
sector to come up, to do the evaluation, to look at the 
opportunities that are there, to create real value, and so that 
the funding from the Federal level is key in driving that 
overall discussion and the partnerships that can form if the 
funding mechanism is in place.
    Ms. Esty. We would love to cycle back with you on some 
specific proposals we were looking at to include P3s and other 
ways of leveraging those resources, whether it is for parks, 
which are part of creating that quality of life, or repurposed 
industrial sites, or shopping malls, or whatever it may be. We 
are trying to put some urban greenhouses in one of ours to 
bring food back into the city, cap those sites, but then 
actually repurpose them for use.
    Mr. DeGood, you talked a little bit about that. Can you 
speak both about brownfields and the importance of that, and 
also return a little bit to the importance of leveraging that 
Federal funding? Because I saw it at the local level. If 
communities don't have those match for water systems, they 
can't get the goodwill of local residents to raise the property 
tax to pay for those projects.
    Mr. DeGood. I think that is absolutely right. I think one 
of the hardest things, as an elected official, is when somebody 
tells you that it is your responsibility, and your 
responsibility alone. And it is a hard thing to go out into 
your community, even if you passionately believe in the value 
of something like the Clean Water Act or the flood control 
standards that the Army Corps has, even if you want to try to 
engage in redevelopment, if you are saying, ``We are on our own 
here.''
    And so, that is why, when we start hearing stories about 
the kinds of budget cuts that this administration is 
contemplating for the Environmental Protection Agency, it is 
disheartening because we know that, ultimately, for an 
administration that has spent so much time talking about jobs, 
taking these dollars out are actually going to do just the 
opposite. It is going to take the stick out of local elected 
officials' hands and make them unable to deliver for their 
communities.
    Ms. Esty. I see my time is expiring, so I am going to yield 
back my 5 seconds. Thank you.
    Mr. Graves of Louisiana. Thank you, Ms. Esty. With that we 
are going to turn to the gentleman from New York, Mr. Katko, 
for 5 minutes.
    Mr. Katko. Thank you, Mr. Chairman, and congratulations on 
your chairmanship. I look forward to working on this committee.
    Mr. McCarthy, welcome, and I appreciate your testimony thus 
far. As you may or may not know, I am from upstate New York, in 
Syracuse, and spent a lot of time in Schenectady. And in so 
doing, I led--it led me to the conclusion that Schenectady is 
very much in this same boat of all the upstate New York cities. 
We have lost tremendous amounts of manufacturing and tremendous 
amounts of tax base over the last several decades, and that has 
led to profound infrastructure problems, which I am not quite 
certain that this--we have delved into it with enough detail. 
That is what I want to do for the next few minutes.
    As you may or may not know, in Syracuse we still have--we 
have such a profound problem with our water infrastructure that 
some of the pipes we use in the city of Syracuse are still 
wooden from, like, the late 1800s, early 1900s, which is 
unbelievable to me. Last year we had well over 100 water main 
breaks in the city of Syracuse. And some of the really up-and-
coming areas, like Armory Square were often peppered with back 
hoes digging up lines and fixing them and water problems, and 
it just seems, in this day and age, that is crazy.
    So, with that as a backdrop, if you could describe for me, 
you know, the state of your water infrastructure, and then I 
have some followup questions from there.
    Mr. McCarthy. Schenectady is fortunate for its water 
supply. We get that from the Great Flats aquifer, the 
recharge--it is the Mohawk River. And so we have a high 
quality, really, low-cost source of water.
    Mr. Katko. Same in Syracuse, yes.
    Mr. McCarthy. Again, it is one of the great things about 
upstate New York. And at the same time, as you point out, we 
have infrastructure that was put in 100 years ago, 125 years 
ago, sometimes longer. And it just has a realistic life span.
    And so, you have to be able to manage those resources. And 
without--you know, you hope that those pipes are going to last 
another 50 years. The reality is they are not going to. And the 
ability to predict when something happens is unfortunate--it is 
just that element of randomness, so that you are dealing with a 
major break in a water line or sewer line, and it is always 
occurring at 2 o'clock in the morning on a weekend, and you are 
having to mobilize crews that would be normally doing other 
things.
    But if we can get ahead of that problem, those cities in 
upstate New York--and mirrored across the country--have long, 
distinguished histories of significant economic outputs, 
centers of innovation, technology, and you want to have that 
water and sewer system in place so that we can position the 
communities for, really, that next generation of innovation and 
evolution of urban life.
    Mr. Katko. Right. And I totally agree with you. And from an 
industry standpoint, I can only note that we really have a 
limitless supply of water between Lake Ontario, the Finger 
Lakes--it is just amazing, in upstate New York, that the 
quality of water that we have is consistently some of the best 
in the country, and we don't have systems to deliver it.
    So how do you, in your mind, assess the adequacy of the 
funding to replace these--to fix these projects? And what would 
you suggest we try to do, from a legislative standpoint?
    Mr. McCarthy. In Schenectady, we have largely dealt with it 
ourselves, even though we have had some assistance from the 
State, some assistance from--some Federal money in the funding 
streams. But Schenectady gets referenced continually as having 
one of the highest tax rates, not only in New York State, but 
in the country. And it is because we are paying for those 
things. And it is not only water and sewer, but it is other--
roads, school district--other community assets.
    And you get to the point where, even though you are trying 
to keep up and keep ahead of the curve, it creates a negative 
influence where it, in fact, deters our ability to attract 
residents, to attract business, to plan the assets of the water 
and other natural resources that exist not only within 
Schenectady, but in upstate New York.
    Mr. Katko. All right, so how would you--I understand the 
problem, but how would you fix it? What would you think we need 
to do?
    Mr. McCarthy. I would like a funding formula that has 
participation at all levels, so that you have Federal money, 
there is State money, there is local money. Some of the highway 
and bridge money, it is a good formula, it is 80 percent 
Federal, 15 percent State, and then 5 percent local.
    Mr. Katko. Well, how about the Clean Water State Revolving 
Fund? Is that a fund you can access? And, if you can, is that 
adequate for the job?
    Mr. McCarthy. We have found it adequate, because, again, we 
have had low cost for our water source. I am not sure that is 
shared by other communities across the country, and I don't 
have some of that information directly available, but we will 
have it forwarded to you at the conclusion of today's hearing.
    Mr. Katko. I appreciate it. Thank you. I yield back my 
time. Thank you, Mr. Chairman.
    Mr. Graves of Louisiana. Thank you, Mr. Katko. And, with 
that, we are going to recognize the gentleman from California, 
Mr. Garamendi, for 5 minutes.
    Mr. Garamendi. Chairman Graves, thank you--
congratulations--Ranking Member Napolitano, and what is left of 
the committee.
    Just a couple of comments before I ask a question. Mike 
Inamine is here. He faced a most difficult situation over the 
last month, when the floods occurred in California when the 
Oroville Dam spillway failed and--releasing an extraordinary 
amount of water down the Feather River through his responsible 
area on the west side of the Feather River and the community of 
Yuba City, causing--the failure of the spillway caused a 
massive evacuation of over--almost 200,000 people, of which 
about 100,000 of those were in the community that he was trying 
to protect by flood-fighting.
    An extraordinary piece of work, fighting a flood while 
everybody was leaving town. And I know you and your crews did 
not leave town, you stayed there and fought the flood, even 
though you might have been under 20 feet of water had that 
spillway actually failed. That is the emergency spillway 
actually failed. Within 7 hours you would be under 20 feet of 
water. Courageous, necessary.
    One of the major--as I understand it, Mr. Inamine, is that 
the--one of the significant flood fight areas--that is a levee 
that was failing--was to become a part of a Corps of Engineers 
project, but had not yet been designated in the New Start 
programs that we receive occasionally from the Corps of 
Engineers.
    My point here is that if that particular 1-mile stretch of 
the levee--I think there was two, two stretches, actually--had 
been designated in the 2017 work plan, would you have been 
fighting floods?
    Mr. Inamine. There are really two parts to respond to that 
question. And it gets back to my earlier comments about how 
flood control projects are repaired or improved. And it is that 
we collaborate with Corps of Engineers to get New Start 
designations, new projects constructed by the Corps. And, in 
fact, that reach of critically deficient levee has been a 
source of a couple of failures, protects 20,000 people, just by 
itself, was part of the Federal project authorized by Congress 
in 2014.
    But through the State of California, we--for these 
critically damaged sites, we can't wait. And so we applied, 
while we were working with the Corps on the civil works 
process, we worked through the Corps of Engineers under the 408 
process, and used our own money, and just do it ahead of time.
    Well, under that circumstance, in fact, we had applied to 
repair that reach of levee, or a portion of that critically 
damaged reach of levee, last year. We were lined up to do it 
last year. And because of some cultural resource issues, we had 
to go through another--a second 45-day review period through 
the 408 process. Rather extraordinary. As a result, killed our 
construction season.
    Fast forward to last month. We are flood-fighting that 
reach that would have normally have been repaired under a 
normal construction season. That is money out of our pockets. 
We are hopeful that the State will reimburse us at the end of 
the day. And that was work that could have been done in a 
normal construction season.
    Mr. Garamendi. I think the point I want to make here is 
that there are all kinds of projects. There are the nice-to-do 
projects, there are the necessary projects, and then there are 
those projects upon which human life depends. And in this case, 
these levee improvements, they are known levee weaknesses. It 
is not just in my district, although I have 1,100 miles of 
levees, but around the Nation.
    There are known weaknesses in levees upon which human life 
is at risk. And we ought to be prioritizing, you know, nice to, 
necessary, economic development or whatever, and then life 
threatening. And we should urge the Corps of Engineers, in the 
process that we have now established, where they come to us 
with their proposed projects, that we keep in mind the life-
threatening projects.
    And so, we have more than enough in my district, but I 
suspect that the Members of Congress, some of whom are still at 
this committee hearing, have similar necessary-to-preserve-
human-life projects.
    I am going to be out of time in 6 seconds, but I want to 
really congratulate, Mike, you and the work you have done. You 
have taken more than 40 miles of levee, you have upgraded those 
40 miles of levee in a very rapid process. Had you not done 
that, surely, even without the failure of the emergency 
spillway, there would have been lives lost, had you not been on 
top of these projects over the last several years. 
Congratulations to you and thank you for that effort.
    Mr. Graves of Louisiana. Thank you, Mr. Garamendi. Next we 
are going to go to the vice chair of the subcommittee, Mr. Mast 
from Florida. You are recognized for 5 minutes.
    Mr. Mast. Thank you, Chairman, and each of you for your 
testimony today. I really appreciate it. I enjoyed reading 
them.
    You know, number one, you know, I live in one of those 
areas. Very similar issues as so many here, issues with the 
Corps of Engineers, issues with the infrastructure that is 
going on in my community. Personally, it is regularly plagued 
by massively harmful discharges coming out of Lake Okeechobee, 
and going out towards the east coast and west coast of Florida. 
They are implemented by the Corps of Engineers. Sometimes these 
discharges are--freshwater into our saltwater estuaries are as 
high as 7 million gallons a minute at their peak flows. It is 
very devastating. We get just absolutely devastating algae 
blooms.
    And again, probably the most disconcerting part to me is 
that these are imposed by the Federal Government on us. But 
they are not cleaned up by the Federal Government, and that is 
one of the worst things that I can say about them.
    Now, one of the other things that we could say about this 
is this is just freshwater that is simply lost out to sea. And, 
as we look at each of our areas across the country, where we 
see people--some people that don't have enough water--and, as 
was said before, some of us that have way too much water--it 
can become very troublesome and very frustrating to all of us. 
And that is just as an aside here.
    Now, from my vantage point, one of the best ways to ensure 
that water is utilized in a beneficial way, instead of being 
wastefully discharged, is for the Corps of Engineers, in many 
of these cases, to marry their flood control efforts and that 
mission with their ecological restoration mission that they 
have in so many places.
    For my area it is mirroring the flood control of the dikes 
surrounding Lake Okeechobee with the ecological restoration 
that is south of Lake Okeechobee that feeds into the Florida 
Bay and the Florida Everglades. And that means, in order for 
them to get this done in a timely way--which hasn't happened in 
my area--tackling what we are talking about today, these 
burdensome regulatory problems, construction issues, funding 
delays that are just slowing the Corps of Engineers from 
completing projects. In my area the Herbert Hoover dike 
rehabilitation, 60-plus projects. When they don't get done, it 
really adds up.
    So what I really want to ask you all, this kind of, to me, 
is Exhibit A of how there can be otherwise well-intentioned 
rules and regulations that exist out there, but they actually 
end up hurting our communities and impeding environmental 
protection and impeding the progress of infrastructure.
    So, with that in mind, I was particularly struck by your 
testimony, Mr. Kernion, when you said a couple of things. One, 
in order to build a 21st-century infrastructure, we have to 
build it some time this century. And I think that is a very 
important thing to say. But more specifically, when you talked 
about the Port of Savannah going through a 14-year 
environmental review process--14 years--and a 30-year-to-
completion process.
    So, in that being your testimony, I wanted to ask you two 
specific things. One, can you pinpoint one specific thing, the 
biggest bang for your buck, ``This is what we do to enable this 
infrastructure to be completed to''--you know, which piece of 
it do we get out of the way? What is your number-one piece to 
enabling this to get things done?
    Mr. Graves of Louisiana. Make sure your microphone is on, 
please.
    Mr. Kernion. I said this earlier. The biggest thing that I 
have seen is the--lack of a better way to say it, red tape with 
the environmental procedures and approvals to get projects 
moving forward.
    Mr. Mast. Now, you listed in your testimony a number of--
you know, you listed wildlife, EPA, NOAA, and a number of 
others. Can you point to one specifically?
    Mr. Kernion. Yes. Well, there is a lot of things. And I 
will give you an example. If we are building a levee, and there 
is a tree in the way and it has got an eagle in the top of the 
tree, that levee is going to be moved to buy houses, something 
is going to happen. Don't have anything against eagles, I think 
they are great. But it costs a lot of dollars to move it, you 
know, rather to go ask the guy if he could find another tree.
    But--and I am not trying to be funny about it, but I will 
see some things that are--really get to be, like, major impacts 
to what we do, that is all. And it is the environmental things, 
more so than anything. Indecisiveness? Yes, big issue there. 
But a lot of the environmental red tape on some things that are 
really--you know, they shouldn't happen, that is all.
    Mr. Mast. OK. I have another question for you--I got a 
couple more seconds here--and that is this. I get an answer 
often from the Corps of Engineers when I talk about timelines 
for getting things done that there is simply not enough 
manpower, not enough qualified crews to go out there and get 
some of the projects done, specifically in my area, around Lake 
Okeechobee, that the Corps of Engineers is conducting.
    Can you speak to whether you think that is an accurate 
assessment? Is there enough crews out there to go out there and 
complete things in a faster way? Do you guys have the manpower, 
as general contractors, construction contractors?
    Mr. Kernion. Do the contractors, or does the Corps?
    Mr. Mast. The contractors.
    Mr. Kernion. The Corps of Engineers--General Van Antwerp, 
years ago, asked us after Katrina if the contractors had the 
manpower to put it in place, all of the restoration efforts. 
And contractors stepped up to the plate and got it done. Corps 
of Engineers stepped up to the plate and got it done, also.
    One of the things that I do not know is--I have never 
worked personally with that district around Lake Okeechobee. I 
have heard some rumors about guys that have worked with them, 
and I will refrain from comment on that, what I have heard, but 
it is a different district. And when you work for the Corps of 
Engineers in different districts, they operate totally 
different.
    You know, we did FEMA trailers on a Corps contract after 
this most recent flood up in--around Baton Rouge, Louisiana. 
And dealing--they had one of the district--I think it was the 
northern Alabama--came down. Totally different ballgame than 
working with the New Orleans district. I mean totally 
different. Some of it was shocking, what we have to go through, 
be quite honest with you.
    But I don't--I have never worked with the people in your 
area to be able to comment on that that much, as far as the 
Corps, then. But the contractors, I think contractors are--can 
come up to the plate and make it happen.
    Mr. Mast. OK. My time has expired, so I thank you for your 
comments.
    Mr. Graves of Louisiana. Thank you, Mr. Mast. I am going to 
go to the ranking member, Mrs. Napolitano, for 5 minutes.
    Mrs. Napolitano. Just last one before we let you go. Mr. 
DeGood, if the President were to put forward a proposal that 
privatized leverage private equity capital as the primary 
Federal role in addressing water infrastructure projects, what 
would be the likely impact to communities like mine, or anybody 
else's, where local ratepayers already having a difficult time 
making ends meet in addressing the water quality in their area?
    And the second question--and I will make it--I want to get 
over it--you described a recent trend for local communities to 
take on more debt to address local water challenges. Yet often 
the communities have insufficient tax and user fee revenues to 
cover these debts. I strongly believe they want clean water, 
just like anybody else, but often have competing needs for 
municipal service, fire, and police that need to be addressed. 
And the solutions for this change would be what? How can the 
Federal Government play in this?
    Mr. DeGood. Right. I think it is important to understand 
that private equity, even with the presence of the tax credits 
that President Trump and some of his team have talked about, 
would have very little value for many communities. If you are 
already struggling to find the financial resources to repay 
municipal bonds at 3 percent or 3.5 percent, it is unlikely 
that you are going to magically have the resources to be able 
to cover the return on private equity that can be anywhere from 
10 to 18 percent, depending on the project.
    And again, even with the presence of tax credits bringing 
down the cost of that equity somewhat, it is still going to be 
a stretch for communities. And I think one of the things that I 
have found that is troubling about some of the public-private 
partnerships that have happened in recent years is the extent 
to which local communities are paying the premium price that 
goes along with a P3, but not receiving some of the benefits 
that we normally associate with this form of procurement. 
Specifically, if we compare this to the transportation side, we 
see that there is more of an opportunity for true risk 
transference, especially for projects that may exceed $1 
billion or $1.5 billion.
    But when we are talking about smaller systems, where the 
only infrastructure upgrades that are contemplated as part of 
these capital improvement programs are basic repairs and 
rehabilitation--replacing pump stations, we can't really 
honestly say that that private-sector contractor is taking on 
this risk payment because of the complexity of the work.
    Again, some of these contracts have the public maintaining 
complete liability for any environmental discharges that 
violate Federal or State laws. They have the public on the hook 
for any rate increases for the water deliveries they may take 
for regional drinking water providers. They have the public on 
the hook for any cost overruns in the infrastructure projects 
that they have in their capital plan.
    So, to my mind, it is troubling for us to say to local 
communities, ``Don't worry, you can always go out, take equity 
capital, take these tax credits from the Trump administration, 
and that is going to solve your problem.'' It just really 
isn't.
    Mrs. Napolitano. Anybody else?
    [No response.]
    Mrs. Napolitano. Thank you, Mr. Chair.
    Mr. Graves of Louisiana. Ms. Pape, I am curious if you 
would care to respond to Mr. DeGood's comments.
    Ms. Pape. I would. I can't speak to a leased form of 
private equity investment, but I can speak to acquisition of 
assets by private entity. And in that case, in many instances, 
we can spread those costs, because we have a larger base. It is 
a very capital-intensive industry.
    We also take on all risk. We don't leave risk with the 
community. We take it on, not only for the assets that we are 
buying, but for upgrading. And asset renewal is an ongoing 
effort. It is not a once and done, it is every day, every year, 
you are continually looking at what needs to be replaced, what 
condition do you have.
    So, in terms of the private companies that buy assets, we 
do assume the risk, and we are able to spread out the cost, as 
well. So the impact on the customers is not as great.
    Mr. Graves of Louisiana. Great, thank you. I will tell you 
I have a number of other questions for all of you. You have 
been patiently sitting there for 2 hours, and we are most 
appreciative. We are going to have, I think, a number of 
questions for the record for each of you.
    I just want to say, in closing, I am going to go back to 
home, and Mr. Kernion is from Louisiana. He made mention in his 
testimony about a situation at home where we have an eroding 
coast. We have lost approximately 2,000 square miles of our 
coast, wetlands. And we are all familiar with how important 
wetlands are, and we are familiar with the Clean Water Act, and 
404 permits, and things along those lines.
    Well, the primary cause of this wetlands loss in the State 
of Louisiana is actually the U.S. Army Corps of Engineers. And 
it is interesting to see this--kind of the irony in the 
regulatory program, in that they are making everyone else 
protect wetlands and restore wetlands and mitigate wetlands, 
yet in the case when their own actions cause loss, they 
literally are doing nothing. And, not only doing nothing, but 
in fact, impeding efforts, as was noted, by the State and 
others, in some cases, to actually restore wetlands.
    And so, look, this isn't a partisan issue, this isn't--this 
is something that all of us need to be working very closely 
together on. Make note. The administration, again, announced 
that they intend to pursue a $1 trillion infrastructure 
package.
    We have a project in south Louisiana called the Gulf 
Hurricane Protection Project that has been in the study phase 
since 1992. The Federal Government has not stuck a shovel in 
the ground. We have a hurricane protection project in Louisiana 
called the West Shore project. The project just came out of the 
study phase, and, thankfully, the committee authorized the 
project in the WRDA bill, but it was in the study phase for 
approximately 42 years before--I want to be clear--before a 
project recommendation was made, right? So not a single thing 
has been done, just a project recommendation.
    We heard Mr. Inamine note that in his case, when he carried 
out the project on his own, that he was able to do it for 
approximately half the cost.
    So this isn't anything to beat up on anyone, this isn't a 
partisan issue. This is all about the fact that we have limited 
resources. And many of you, in your testimony, talked about the 
need for greater investment. Well, one of the ways you get 
greater investment is by stretching your dollar, by ensuring 
that you are most efficiently using the resources that you 
have. If you can carry out a project for half the cost, you can 
do two of them.
    It is a simple concept, and something that I think we need 
to be paying careful attention to, the amount of money that we 
are spending on administrative, on regulatory compliance, and 
on project implementation to ensure that we can sit here and 
tell taxpayers that we are maximizing the limited resources 
that are available.
    So, with that, I again want to thank all the witnesses. You 
can expect questions for the record that we will be submitting, 
and ask for your response to those. And thanks again. It has 
been very helpful. And if no other Members have anything to 
add, the subcommittee stands adjourned.
    [Whereupon, at 12:17 p.m., the subcommittee was adjourned.]


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