[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
AN EXAMINATION OF FEDERAL PERMITTING PROCESSES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
THE INTERIOR, ENERGY, AND ENVIRONMENT
OF THE
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
MARCH 15, 2018
__________
Serial No. 115-67
__________
Printed for the use of the Committee on Oversight and Government Reform
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov
http://oversight.house.gov
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Committee on Oversight and Government Reform
Trey Gowdy, South Carolina, Chairman
John J. Duncan, Jr., Tennessee Elijah E. Cummings, Maryland,
Darrell E. Issa, California Ranking Minority Member
Jim Jordan, Ohio Carolyn B. Maloney, New York
Mark Sanford, South Carolina Eleanor Holmes Norton, District of
Justin Amash, Michigan Columbia
Paul A. Gosar, Arizona Wm. Lacy Clay, Missouri
Scott DesJarlais, Tennessee Stephen F. Lynch, Massachusetts
Blake Farenthold, Texas Jim Cooper, Tennessee
Virginia Foxx, North Carolina Gerald E. Connolly, Virginia
Thomas Massie, Kentucky Robin L. Kelly, Illinois
Mark Meadows, North Carolina Brenda L. Lawrence, Michigan
Ron DeSantis, Florida Bonnie Watson Coleman, New Jersey
Dennis A. Ross, Florida Stacey E. Plaskett, Virgin Islands
Mark Walker, North Carolina Val Butler Demings, Florida
Rod Blum, Iowa Raja Krishnamoorthi, Illinois
Jody B. Hice, Georgia Jamie Raskin, Maryland
Steve Russell, Oklahoma Peter Welch, Vermont
Glenn Grothman, Wisconsin Matt Cartwright, Pennsylvania
Will Hurd, Texas Mark DeSaulnier, California
Gary J. Palmer, Alabama Jimmy Gomez, California
James Comer, Kentucky
Paul Mitchell, Michigan
Greg Gianforte, Montana
Sheria Clarke, Staff Director
William McKenna General Counsel
Ryan Hambleton, Interior, Energy, and Environment Subcommittee Staff
Director
Emily Wong, Counsel
Sharon Casey, Deputy Chief Clerk
David Rapallo, Minority Staff Director
Subcommittee on the Interior, Energy and Environment
Blake Farenthold, Texas, Chairman
Paul A. Gosar, Arizona, Vice Chair Stacey E. Plaskett, Virgin Islands
Dennis Ross, Florida Jamie Raskin, Maryland
Gary J. Palmer, Alabama Jimmy Gomez, California
James Comer, Kentucky (Vacancy)
Greg Gianforte, Montana
C O N T E N T S
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Page
Hearing held on March 15, 2018................................... 1
WITNESSES
Mr. James Iwanicki, PE, Engineer-Manager, Marquette County Road
Commission
Oral Statement............................................... 4
Written Statement............................................ 5
Ms. Valerie Wilkinson, CPA Vice President and CFO, The ESG
Companies
Oral Statement............................................... 21
Written Statement............................................ 23
Mr. Kevin DeGood, Director, Infrastructure Policy, Center for
American Progress
Oral Statement............................................... 34
Written Statement............................................ 36
Ms. Diane Katz, Senior Research Fellow in Regulatory Policy, The
Heritage Foundation
Oral Statement............................................... 38
Written Statement............................................ 40
APPENDIX
February 24, 2016, Stateline Pew, Barrett and Greene, ``States
Strive to Eliminate Costly Construction Delays'' submitted by
Mr. Palmer..................................................... 64
AN EXAMINATION OF FEDERAL PERMITTING PROCESSES
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Thursday, March 15, 2018
House of Representatives,
Subcommittee on the Interior, Energy, and
Environment,
Committee on Oversight and Government Reform,
Washington, D.C.
The subcommittee met, pursuant to call, at 2:00 p.m., in
Room 2154, Rayburn House Office Building, Hon. Blake Farenthold
[chairman of the subcommittee] presiding.
Present: Representatives Farenthold, Palmer, Comer,
Plaskett, and Raskin.
Mr. Farenthold. Good afternoon. The Subcommittee on the
Interior, Energy, and the Environment will come to order.
Without objection, the presiding member is authorized to
declare a recess at any time.
I will now recognize myself for five minutes for an opening
statement.
Today, our subcommittee will examine the Federal permitting
processes under the National Environmental Policy Act, known as
NEPA, and the Clean Water Act. Numerous reports have documented
how convoluted requirements and lengthy application periods for
Federal environmental permits negatively affect infrastructure
and development projects. Today's hearing will explore the
problems and inefficiencies within those permitting processes
in order to highlight opportunities for reform.
NEPA was passed with good intentions nearly 50 years ago
but over time has evolved to become one of the most burdensome
regulations facing any development project. NEPA review for
complex projects that require an environmental impact statement
can take years to complete and cost millions of dollars. The
time for a full environmental review for a highway project has
now grown from approximately two years when NEPA was first
implemented in the '70s to over seven years in 2013. Even that
seems quick compared to the 17 years it took one company to get
a permit for mining in western Montana.
State and local governments are forced to navigate the
bureaucracy of a myriad of Federal agencies in order to get a
project approved under NEPA. In addition to all the red tape,
applicants face the constant threat of litigation brought by
environmental groups and other opponents to development. Even
the most minor oversight in the review process can prompt a
lawsuit from activists, adding further delay on top of an
already lengthy process.
The permitting program established in section 404 of the
Clean Water Act is similarly plagued by lengthy delays and high
costs for applicants. One of the witnesses we will hear from
today has been waiting nearly 30 years for a permit, and the
project remains in limbo. Environmental Protection Agency and
the Army Corps of Engineers share responsibility for
administering this program and over the years have used their
regulatory authority to expand the jurisdiction of the program
and their own authority.
The requirements for section 404 permits are vague, and
reports indicate that enforcement varies from district to
district. This makes it very difficult for applicants to know
what is required for a successful application. There is also no
time limit imposed on the review process, so permit applicants
face significant uncertainty and have difficulty planning for
when they can begin work.
Not only is navigating the permit process difficult, there
is also no guarantee that a project will be allowed to proceed.
In 2013, the Supreme Court held that the EPA has the authority
to retroactively veto section 404 permits issued by the Corps.
In that case, the permit had been issued four years prior to
the EPA's decision to veto it, and the permit holder was in
full compliance with the conditions of their permit. When a
project can be arbitrarily vetoed midway through development,
it is difficult if not impossible to attract investors and
creates enormous disincentives to undertake any project
requiring a 404 permit.
Some of our panelists have had particularly egregious
experiences trying to get a permit, and I look forward to
hearing their perspectives on the issue. I hope this hearing
provides a starting point for a productive discussion about
ways to improve the Federal permitting process and get American
infrastructure and development back on track.
Mr. Farenthold. I will now recognize the ranking member,
Ms. Plaskett, for her opening statement.
Ms. Plaskett. Thank you very much, Mr. Chairman, and thank
you, witnesses, for being here with us this afternoon.
We can all agree that environmental protection should go
hand-in-hand with economic development. The Virgin Islands,
which I am proud to represent, is a beautiful place that
thrives on tourism and understands more than most places the
importance of striking the balance between environmental
regulations and development.
According to the American Society of Civil Engineers, our
nation faces an infrastructure investment deficit of $2
trillion. For instance, the estimated $1 trillion is needed to
fix America's drinking water infrastructure. Our nation's
transit system has a backlog of projects to attain a state of
good repair that will cost $90 billion and is projected to grow
to $122 million.
America's public school system needs $58 billion to
maintain and operate current facilities and an additional $77
billion to upgrade the current school facilities to reduce the
maintenance backlog. In my district, the public schools are
forced to run on four-hour rotations because of the destruction
to school facilities during the recent hurricane season. This
is expected to continue at least through the next school year
until new facilities can be constructed.
Finally, America's roads and bridges are in need of $836
billion to repair a system that has been underfunded for years.
Unfortunately, President Trump's infrastructure proposal
aggravates the infrastructure deficit. The Trump plan will cut
more than $168 billion from Federal highways, Amtrak, and water
infrastructure funding over 10 years. President Trump also
proposes retreating from the Federal Government's lead role in
financing infrastructure.
The Federal Government historically funded 80 percent of
the highways and 20 percent would be funded locally. This new
plan reverses the percentages and requires States to contribute
80 percent of projected costs in order to receive 20 percent
match. State officials know that requiring an 80 percent local
cost share for an eligible project is going to put most if not
all projects out of reach. In the Virgin Islands and Puerto
Rico it makes them basically out of the question.
The plan is little more than a wish list. It wishes that
State and local governments and private investors will make up
for reduced Federal investment in infrastructure, but we don't
have the luxury of magical thinking. The civil engineers
determined that inadequate infrastructure costs every American
family $3,400. Isn't it time we face up to the fact that we
cannot avoid the cost of investing in our infrastructure?
There is also much progress to be made in permitting. In
the Virgin Islands where the cost of living is 33 percent
higher than even the District of Columbia, every dollar in
local economy is crucial to the survival of the islands, and we
cannot afford drawn out delays in permitting for economic
development projects. But there are ways to speed up projects
that will not lead to environmental damage. Permitting agencies
should have enough funding to complete reviews quickly, and
coordination tools already available should be fully
implemented. The most common factor delaying water and
transportation projects is inadequate funding. What we need is
long-term Federal support. That should be our priority.
I thank our witnesses for sharing their testimony today and
look forward to this important discussion.
Mr. Farenthold. Thank you very much. And now, I am pleased
to introduce our witnesses. First, we have Mr. James Iwanicki.
Did I get that right?
Mr. Iwanicki. Iwanicki.
Mr. Farenthold. Iwanicki, all right. That wasn't even close
to what was in--the phonetic spelling in my notes. I am sorry,
Mr. Iwanicki. He is the engineer-manager of the Marquette
County Road Commission in the upper peninsula of Michigan. We
have Ms. Valerie Wilkinson, vice president and CFO of the ESG
Companies in Virginia; Mr. Kevin DeGood, director of
infrastructure policy at the Center for American Progress; and
Ms. Diane Katz, senior research fellow and regulatory policy at
the Heritage Foundation. Welcome to you all.
Pursuant to the committee rules, all witnesses are to be
sworn in before they testify. Would you all please stand and
raise your right hand?
[Witnesses sworn.]
Mr. Farenthold. Let the record reflect all witnesses
answered in the affirmative. You may be seated.
In order to allow time for discussion, please limit your
testimony to five minutes. Your entire written testimony will
be made part of the record. And as a reminder, you have got a
clock in front of you, and you have also got three lights.
Green means go, yellow means hurry up, and red means stop.
Please also turn your microphone on, and the budget-conscious
folks we are, we did not buy the most expensive microphones, so
they sound much better the closer you get to them.
So now, we will recognize Mr. Iwanicki. Did I get that--I
am getting closer.
WITNESS STATEMENTS
STATEMENT OF JAMES IWANICKI
Mr. Iwanicki. Thank you, Mr. Chairman and Madam Ranking
Member, and other distinguish members of the subcommittee.
Thank you for inviting me to testify on the Federal permitting
process under the Clean Water Act. I am Jim Iwanicki. I'm the
engineer-manager of the Marquette County Road Commission in the
upper peninsula of Michigan. I'm very familiar with the Clean
Water Act permitting process. Over the last five years, my
agency has averaged over 20 Clean Water Act permits per year.
I'm here today to testify about my experience in trying to
permit County Road 595 in order to improve the health, safety,
and welfare of our citizens, along with having a positive
economic impact on mining, logging, recreation, and tourism in
the State of Michigan.
The Michigan DEQ was ready to issue a permit for County
Road 595 pursuant to Federal Clean Water Act. EPA vetoed the
State's position and stopped the permit from being issued. That
is why I'm testifying about a road that never was, and counsel
for the Road Commission is in Federal court seeking the
opportunity to challenge EPA's veto. EPA's veto has caused
heavy truck traffic to be routed through populated areas of
Marquette County, through a university campus, three cities,
and next to schools.
In January of 2012 the Road Commission submitted a 404
permit application for County Road 595. It was 21 miles in
length, affected 26 acres of wetland, and it was a commonsense
solution to a transportation need in the county. The cost of
the project was $83 million. It was going to be funded through
a public and private partnership with Rio Tinto. Rio Tinto was
interested in the partnership because they were building a new
nickel mine called the Eagle Mine, and they were refurbishing
an old iron mill, the Humboldt Mill.
The distance between the mine and the mill as the crow
flies is about 19 miles. The existing road system that goes to
the mine and to the mill is over 60 miles one way. Five ninety-
five would reduce travel time by an hour, and 595 would have
been built in a working woods, not a pristine wilderness.
EPA only wanted to talk about preservation and would not
allow us to use creation for a wetland mitigation plan. EPA
continually changed the rules for wetland mitigation. In June
of 2012 they said a 20-to-1 ratio would covered direct and
secondary impacts of the project. By the way, the Michigan
Department of Environmental Quality replacement ratio is 12 to
1 max. We proposed to preserve 2.5 square miles next to the
McCormick track. The McCormick track is a Federally protected
wilderness area in the Ottawa National Forest. We proposed 640
acres of high-quality wetlands, a 25-to-1 ratio, plus 929 acres
of upland for a total of a 60-to-1 ratio.
In December of 2012, the EPA wanted additional mitigation
for secondary impacts and gave the Road Commission less than 30
days, including Christmas and the New Year's holiday, to come
up with a solution. EPA also wanted us to secure mineral rights
for the wetland preservation area. Federal rules only say to
protect sites to the extent appropriate and practicable. EPA
would not allow local units of government to be the land
steward of the preservation area, as allowed by law.
Michigan Department of Natural Resources voluntarily--
volunteered to be the land steward. They manage 4.6 million
acres for the State of Michigan. When the--we told the EPA that
they were willing to do that, their response was we were not
sure they were qualified, and they would have to check into it.
EPA demanded creating wildlife crossings large enough to
accommodate moose, bear, wolf, and cougar, but they would not
tell us where they wanted these crossings. These may be NEPA
requirements, but they are not requirements of the Clean Water
Act when a State has assumed authority.
EPA was unwilling to negotiate resolutions openly by
telling us directly what would satisfy their issues. In fact,
during the last months of the project, they would not even tell
us who the decision-maker was going to be so we could talk to
them directly and come up with a solution.
We had great political support for County Road 595. On the
local, State, and Federal level it was bipartisan. The Michigan
House and Senate approved; the Governor of the State of
Michigan approved; Dan Benishek, at the time a Republican House
Representative, approved; and both of our Democratic Senators,
Carl Levin and Debbie Stabenow, approved the project.
Congress wrote the Clean Water Act specifically to allow
States to assume Clean Water Act section 404 permitting
authority in place of the U.S. Army Corps of Engineers and the
EPA. Michigan has done that. Congress should do what it can to
see that the local- and State-elected officials who have
followed the Clean Water Act requirements can act in the best
interest of their community without arbitrary and capricious
interference from EPA bureaucrats in Chicago and Washington.
Congress should clarify the Clean Water Act. When a State
has assumed section 404 permitting authority and intends to
approve the project but the EPA objects, the permit
application--the permit applicant should be allowed to
challenge EPA's objections as arbitrary and capricious in
court.
Thank you, and I'd be willing to answer any questions that
the panel has.
[Prepared statement of Mr. Iwanicki follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Farenthold. Thank you very much.
Ms. Wilkinson, you are recognized for five minutes.
STATEMENT OF VALERIE WILKINSON
Ms. Wilkinson. Chairman Farenthold, Ranking Member
Plaskett, and members of the subcommittee, I appreciate the
opportunity to testify. My name is Valerie Wilkinson, and I am
the vice president and chief financial officer of the ESG
companies, a small business based in Virginia Beach, Virginia.
Homebuilders have become frustrated with the expansion of
Federal authority over private property and believe the current
permitting process is broken. For almost 3 decades we've been
held hostage by the EPA and the Corps, who have continually
altered the Clean Water Act 404 permit requirements. This is
perplexing as the relevant sections of the act have not changed
since 1972.
Our nightmare began almost 30 years ago when our company
proposed plans for a multi-use community to address the local
housing demand. While we were clearing our land in 1989, the
Corps asserted that our property contained jurisdictional
wetlands and that a 404 wetland permit was required. We hired
environmental experts to survey the land. However, the Corps
completely dismissed their assessments. The delineation took
years to complete because Corps officials disagreed on the
criteria for determining wetlands.
The regulatory environment changed again in 1999 when
Virginia adopted the Federal 404 regulations to create an
expedited one-stop-shop permitting process. Virginia DEQ staff
confirmed our expert's delineation, and we submitted our State
permit request. We agreed to revise our plan to further avoid
and minimize impacts and provided mitigation so for every acre
impacted two acres of wetlands would be restored and another
acre placed in preservation, resulting in no net loss of
wetland acreage or functions. The DEQ applauded the fact that
we exceeded the typical protective measures and issued a 15-
year permit in 2003.
Since the State and Federal requirements are the same, we
were stunned when the Corps disagreed with the DEQ's
delineation and added 36.7 acres of impacted wetlands to the
project. The basis of their decision for this 25 percent
increase was vague and unsubstantiated. Although we strongly
disagreed, we tried to move the permit forward by offering a
number of amendments to our proposal that lessened the
environmental impact and provided extensive alternatives
analysis, which prove the other options unfeasible.
Five years after we received a State permit, the Corps,
utilizing the same regulations, denied our request. The Corps
wrongly claimed that we had not adequately addressed
information requests even though we had replied to everyone,
provided numerous offsite analysis, as well as 17 onsite
alternatives and addressed every public comment to multiple
public notices.
Frustrated, we modified our project again in an effort to
stay out of court and salvage some of our extensive investment.
The significantly reduced plan decreased wetland impacts by 84
percent, and the Court accepted this as a modification to our
original application. However, the Corps adopted a new regional
supplement, which expanded the definition of a wetland, and we
were forced to start over again with a new set of rules.
Now, 13 years since first filing our Federal application,
we have responded to countless requests for information,
studies, data, only to be met with more delays and requests to
update and revise the information. We've hired more consultants
and experts. Many of these requests appear to be just stalling
mechanisms, yet we've complied again and again. We have been
prevented from developing any of our 428 acres for almost 30
years, and our 15-year State permit will expire in nine months.
We have spent over $4.5 million in the process and over $40
million in our investment in the property, and we still are not
close to a permit.
If constructed, our project will create jobs, increase
property tax revenue, and provide affordable housing. I hope
that our story can be used to advance positive reforms and
repair a broken regulatory system. Congress must work to pass
legislation that streamlines permitting and establishes a
process that offers transparency, certainty, and reasonable
deadlines.
Thank you for the opportunity to testify, and I look
forward to your questions.
[Prepared statement of Ms. Wilkinson follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Farenthold. Thank you. And I am sorry for what you are
having to go through.
Mr. DeGood, you are recognized for five minutes.
STATEMENT OF KEVIN DEGOOD
Mr. DeGood. Thank you. Thank you, Chairman Farenthold,
Ranking Member Plaskett, and members of the subcommittee, for
the opportunity to testify. It is a privilege to contribute to
this committee's work.
In recent years, environmental review and permitting have
come under sustained attack, often based on spurious claims
about the length of time needed to complete Federal reviews.
The President's infrastructure plan is only the latest example.
The hard truth is that infrastructure projects cost money,
yet when taken together, the President's budget and
infrastructure plan call for cutting $1.40 from existing
Federal of the structure programs for every $1 of proposed
expenditure. The net cut would reduce total construction
activity. In Washington, everybody wants to go to the ribbon
cutting, but nobody wants to pay the bill.
Instead of real spending, the President has proposed deep
environmental deregulation. The White House and other opponents
of environmental review paint a dire picture of a Federal
bureaucratic Leviathan implacably turning out red tape to our
collective detriment. If only, the argument goes, project
sponsors didn't have to study the potential impacts of
building, then everything would be cheaper, faster, and better.
This tidy narrative is false.
First, environmental review produces better projects and
saves taxpayers' money in the long run. History shows that
building first and asking questions later often leads to
irreparable social and ecological damage. Second, only a small
fraction of infrastructure projects must complete a full
review. And third, project review times for many categories of
projects have actually fallen in recent years.
In 1969, Congress passed NEPA to address growing public
concern over the serious community and environmental damage
caused by Federal actions, including the construction of new
infrastructure projects. The fundamental goal of NEPA is to
allow informed decision-making by providing the public with
detailed information on the potential harms associated with
infrastructure projects. Failing to consider potential impacts
from infrastructure projects is penny wise and pound foolish.
Take, for example, the Kissimmee River in Florida. The
river carries water south from Lake Kissimmee to Lake
Okeechobee, which then releases water into the Everglades and
recharges the Biscayne aquifer, which provides drinking water
to millions of residents of South Florida. In early 1960s,
prior to NEPA, the Army Corps reconstruct the this 103-mile
meandering Kissimmee River into a 56-mile-long, 300-foot-wide
drainage canal in the name of flood control. The resulting
environmental damage was so severe that Congress authorized the
partial restoration of the Kissimmee River just 21 years after
completion of the channelization project. When adjusted for
inflation, the channelization cost $194 million, and the
partial restoration will cost more than $1 billion, a fivefold
increase in constant dollar terms.
Opponents of review often argue that transportation
projects, especially highways, face inordinate delays. In fact,
only 4 percent of highway projects require a full environmental
impact statement. Since 2009, the average review time for major
highway projects has fallen to 3.6 years. That may sound like a
lot, but it's important to remember that mega-projects often
come with mega-complexities. By rushing environmental review,
we increase the risk of funding infrastructure that will
produce substantial social and environmental harms that could
have been mitigated with a bit of forethought and planning.
The push for further environmental deregulation is
especially troubling since Congress has already voted three
times in the past six years to speed the review process. In
fact, Federal agencies have yet to promulgate many of the
regulations implementing reforms to NEPA, included within MAP-
21, WRRDA, and the FAST Act. Moreover, the Trump administration
has yet to appoint a director for the Federal Permitting
Improvement Steering Council or to appoint a head of CEQ. In
short, Congress has granted the Federal executive numerous
administrative and regulatory powers to speed the environmental
review process. These reforms need time to be fully implemented
and given time to work before further changes are made to law.
Unfortunately, these facts haven't stopped the Trump
Administration from proposing to dramatically rollback review
by shortening the statute of limitations for filing legal
claims, allowing certain types of construction to proceed
before review completion, and limiting the scope of
alternatives analysis. These and other proposed changes would
lead to less community input and greater environmental harms,
including dirtier air and water.
In many respects, the fight over NEPA is a fight about
values and power. Environmental review is the process by which
we value people, places, and the environment by trying to
minimize the harms from development. Review also serves to
empower local communities. Moving critical information and
decision-making out from behind closed doors where planners and
developers tend to operate, yet without adequate time to study
a project or the ability to seek legal remedy when mitigation
efforts are inadequate, the concept of community and
environmental protection lose their meaning.
Weakening environmental review would simply add to our
fiscal burden by rushing construction of poorly conceived
projects that would require extensive remediation later on.
There are no shortcuts to fixing our nation's infrastructure
backlog. The only real solution is for Congress to once again
take the investment--I'm sorry, to make the investment
necessary to ensure our country can prosper and compete for
decades to come.
Thank you.
[Prepared statement of Mr. DeGood follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Farenthold. Thank you. Ms. Katz, you are recognized for
five minutes.
STATEMENT OF DIANE KATZ
Ms. Katz. Thank you. Chairman Farenthold and Ranking Member
Plaskett and members of the subcommittee, thank you for
inviting me to testify today. My name is Diane Katz. I'm a
senior research fellow in regulatory policy at the Heritage
Foundation. The views expressed in this testimony are my own
and should not be construed as representing any official
position of the Heritage Foundation.
Proponents of President Trump's infrastructure initiative
claim that it would create millions of jobs, accelerate
economic growth, and increase productivity. However, work must
actually commence in order for benefits to accrue, and a
variety of Federal, State, and local regulations imposes years
of delay and higher costs that serve little purpose except to
empower the Federal Government and antidevelopment activists.
Among the most problematic of these regulations are the
National Environmental Policy Act, or NEPA, and the section 404
permitting regime under the Clean Water Act. Four decades of
experience with both has exposed a raft of regulatory flaws,
including politicized science, arbitrary standards, and
protracted litigation. The average time--as the chairman
referred to earlier, the average time to complete a NEPA impact
assessment of a transportation project has expanded from 2.2
years in 197 to 6.6 years in the past 5 years.
Every day of delay increases project costs and postpones
the benefits of modernized and safer infrastructure. NEPA is
rendered largely obsolete by the vast number of categorical
exclusions that agencies routinely grant to waive environmental
reviews. The Federal Highway Administration alone grants more
than 50 types of exclusions, and waivers constitute between 90
percent and 99 percent of State transportation projects. Even
the Obama administration granted NEPA waivers to more than 95
percent of the projects funded by the American Recovery and
Reinvestment Act of 2009. It makes us wonder what the use of
regulation is if 90 percent of the time its compliance is
waived.
The Clean Water Act section 404 permitting is also a
regulatory quagmire. There is no agreement between Congress,
the EPA, the Army Corps of Engineers, State and Federal courts,
or the U.S. Supreme Court on the parameters of Federal wetlands
jurisdiction. The regulatory uncertainty is costly to
individuals, businesses, and the Nation.
Shoddy science also exacerbates the chaos of section 404
permitting. For example, the EPA established a scientific
advisory board in 2013 to review the science on the
conductivity of wetlands to downstream waters. The research was
supposed to interpret the science on wetlands to help clarify
Federal wetlands jurisdiction. But EPA didn't wait for the
results before revising the wetlands regulation in 2015, a
revision the dramatically expanded Federal powers over private
property and spawned lawsuits nationwide.
The regulatory complexity of infrastructure projects is
magnified to the extent that interagency coordination is
necessary. Federal agencies are constantly embroiled in
political skirmishes simultaneously called to account by
Congress, the White House, courts, and activists. Each operate
by a different set of regulatory procedures and few if any
observed deadlines. These and other regulatory hurdles
undermine U.S. competitiveness. The United States ranked a
measly 15th out of 33 OECD countries for ease of permitting in
the World Bank's 2017 Doing Business study. Even Estonia and
Portugal ranked higher. And the U.S. only ranked as mostly free
in 2018 in the Heritage Index of Economic Freedom.
Since the passage of NEPA in 1969 and the Clean Water Act
in 1972, there have been dramatic changes in America's
economic, social, political, and environmental landscapes. Back
then, NEPA was the vanguard of environmental protection, but
today, there is no shortage of other regulations to protect
water and air quality; wetlands and endangered species; and to
control runoff, hazardous waste, construction debris,
demolition dust, and every other byproduct of infrastructure
modernization. Going forward, any new infrastructure funding
should be conditional on meaningful regulatory reform, starting
with repeal of NEPA and the devolution of section 404
permitting authority to States.
Thank you.
[Prepared statement of Ms. Katz follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Farenthold. Thank you very much.
We will begin our questioning with the gentleman from
Alabama, Mr. Palmer. You are recognized for five minutes, sir.
Mr. Palmer. Thank you, Mr. Chairman. I might need about 30
minutes, but I will try to do it in five, maybe a little grace
from the chairman.
This is an issue near and dear to my heart and close to me,
particularly with my district. Mr. Iwanicki, early last year,
the committee held a hearing on environmental barriers to
infrastructure development, and one of the witnesses was Richie
Beyer. He is the county engineer in Elmore County, Alabama. In
his testimony, he used the example of a simple project to place
a 1.5-inch-thick wearing surface on roadway, and he noted that
the completion, the project file will be 20 times thicker than
the overlay that was placed on the road. The cost an average
would be two times more than a similar project funded solely
with local funds. It was $160,000 per mile under the Federal
guidelines versus 80,000 local only. And the project will have
taken 9 to 12 months longer than if it had been a local
project, all for a road that is materially the same, regardless
of the funding source. Does this track with your experience in
Marquette County?
Mr. Iwanicki. I would say it tracks perfectly with our
experience in Marquette County. Our costs are much lower when
we can use local money and it's a locally bid project and we
have to follow the same regulations. But as soon as we get
Federal money involved, it skyrockets its costs.
Mr. Palmer. How important is it to you to provide a
reliable service on rural roads? This is a rural road.
Mr. Iwanicki. The Marquette County Road Commission serves
about 67,000 people, and we're the largest county in Marquette
County. We have about 1,274 miles of local county road that we
take care of. I have $150 million need to fix our local roads,
and that's with about a $14 million budget. So my constituents
depend on the Road Commission to do the best they can with our
limited resources to make smooth roads for them.
Mr. Palmer. And you are certainly well aware that even
though rural roads represent less than half of traffic in the
United States, it represents over 50 percent of traffic
fatalities?
Mr. Iwanicki. You are correct.
Mr. Palmer. Okay. On bigger projects, one in particular is
in my district. It's the northern beltline. This was a project
that was approved--funding was approved for this in 1989, and
typically, it takes 15 to 20 years to complete a project like
this. What this is is the completion of the beltline around the
city of Birmingham of I-459. It is a Federal project. It is a
multi-lane highway. It is absolutely essential not only for
economic opportunity in the Birmingham metropolitan area but
for the whole region. It improves east/west traffic, economic
traffic between Atlanta west and north/south traffic from the
Gulf Coast to up north. And like I said, it typically takes 15
to 20 years. This was approved in 1989, and now they are saying
that it might be completed in 2054. Ms. Katz, would you like to
comment on that?
Ms. Katz. What's ironic in those types of instances--and
unfortunately, they're not all that rare--is that many of these
projects have environmental benefits that are foregone in the
name of environmental permitting. If you have new road projects
that are going to reduce the amount of, you know, traffic jams
and so on and make routes quicker, those are environmental
benefits. There are also a number of safety--public health and
safety benefits to having more modern infrastructure, and so
there's a lot that we lose. It's not just money that we lose.
There a lot more important things that we lose for these
projects and permitting go off the rails.
Mr. Palmer. Let me read a couple of quotes from a Pew
Charitable Trust report from Stateline about this. They
actually talk about this project in Alabama, but here are a
couple of statements, one from Philip Howard, founder and
chairman of the Common Good, a nonpartisan group focused on
good government. He says, ``A delay is bad for the environment,
it is bad for the economy, it is bad for jobs, it is bad for
global competitiveness. There is nothing good about it.''
Now, here's a comment from Bill Reinhardt, editor of a
monthly newsletter called Public Works Financing. He said,
``You delay the benefit the project was supposed to deliver. If
the project was supposed to be delivered in 2012 and it isn't
delivered until 2022, then you delay all the economic benefit,
the lifestyle benefit, the employment benefit. If you don't
deliver the public good, the public suffers.'' How would you
respond to that?
Ms. Katz. I'd say that's absolutely corrects, and what's
tragic about it is that it's avoidable.
Mr. Palmer. It certainly is. Mr. Chairman, going back if I
may if you will indulge me for just another minute or so ----
Mr. Farenthold. Without objection, the gentleman is
recognized for another minute.
Mr. Palmer. Thank you. Going back to the county engineer
Richie Beyer's testimony, he is talking about a situation where
they had a flood and it washed out a pipe. And they wound up
having to get all the permitting, and they spent almost a
quarter of the funding that was necessary for this just to
get--before they could even start the project. What should have
taken just a few weeks wound up taking months. And this made
the road impassable.
That's the kind of stuff that we are dealing with right
now. We have overregulated ourselves, we are overregulating our
infrastructure, and it makes it extremely expensive, much more
expensive than it ought to be. I think that's what we ought to
be talking about in our infrastructure funding efforts.
I yield back, and I thank the chairman for his indulgence.
I would also like to enter the Pew article into the
official record if I may.
Mr. Farenthold. Without objection, so ordered.
Mr. Farenthold. I will now recognize the ranking member for
her questions for five minutes.
Ms. Plaskett. With the chair's indulgence, I would ask that
Mr. Raskin go ahead of me.
Mr. Farenthold. We will recognize the esteemed professor
for five minutes.
Mr. Raskin. Mr. Chairman, thank you very much, and, Ms.
Plaskett, thank you.
Welcome to all of our witnesses.
So I am new to the whole issue, so I am looking for
clarification here because I know it is being said that section
404 is responsible for slowing down needed infrastructure
improvements, and I know that this story has been invoked by
the President in his infrastructure plan as well. But I want to
make sure I know exactly what the law is so we are all clear in
terms of the terms of the discussion.
The NEPA requires Federal agencies to evaluate the
potential environmental effects of major actions. It does not
prohibit any action at all, is that right, Mr. DeGood?
Mr. DeGood. That's correct.
Mr. Raskin. Okay.
Mr. DeGood. It's a procedural statute.
Mr. Raskin. And so it really requires the decision-makers
be methodical and transparent about considering the
environmental impact of their projects. Is that right?
Mr. DeGood. Correct.
Mr. Raskin. Okay. Is it true that it forces all projects to
go through a detailed environmental review process and
environmental impact statements?
Mr. DeGood. No, I mean it varies by project category, but
it's usually in the single-digit percentages.
Mr. Raskin. Of all of the projects that are coming forward?
Mr. DeGood. Correct.
Mr. Raskin. Okay. And I have heard reference to the fact
that 95 percent of projects are categorical exclusions. Is that
because they just don't have sufficient environmental impact to
make a difference? And what happens to a categorical exclusion
project? How long does that take? Does it take years or months
to get that through or ----
Mr. DeGood. You know, I can speak most directly about
surface transportation and say that there are two kinds of
categorical exclusions, those that are documented and those
that are undocumented. For an undocumented, it can be a matter
of a few days, and for a documented, potentially a few months
but almost never longer than that. So in the time it takes you
to put together a bid prospectus, you can have all of this
documentation wrapped up.
Mr. Raskin. So you are saying in more than 9 out of 10
cases it would be a categorical exclusion, and you are talking
about a matter of months or weeks or even a few days?
Mr. DeGood. Yes.
Mr. Raskin. Okay. Around 4 percent are environmental
assessments. What does that mean and how long does that take?
Mr. DeGood. So environmental assessments can vary quite a
bit if you're not sure whether or not your project is likely to
have a substantial impact. Sometimes you'll undertake an
environmental assessment, which is typically a shorter process.
That's a little less involved. And during that process, if you
come across something that is going to be a significant impact,
you can expand it to be a full environmental impact statement.
And if not, you come to the end of that process and you have a
finding of no significant impact, then you can proceed with
your project.
To show you that that's not just small projects in terms of
either dollars or scope, here in northern Virginia the I-66
public-private partnership to expand that facility outside the
Beltway had a two-step process. They first started with the
tier 1 EIS but then ultimately were able to complete that
entire environmental review under the environmental assessment.
So it's not just that EA is applied to smaller projects or
small-dollar projects. They can apply to very big multi-
billion-dollar facilities.
Mr. Raskin. Okay. So 1 percent or fewer of the projects
then require environmental impact statement. How do I know if
my project is going to require an environmental impact
statement? Whose decision is that?
Mr. DeGood. Well, ultimately, it's the Federal Government's
decision, but you as the project sponsor are going to have a
very good sense of that going into it. So if you're doing
something like, say, repaving an existing State highway inside
of the active right-of-way, it's likely that you're going to
have a categorical exclusion. If you're engaging in a
greenfield construction, which is to say you're building out
into an area which is not currently developed, it's almost
assuredly going to be the case that you need to have a full
environmental impact statement.
Mr. Raskin. Okay, but I have heard different people raise
disagreements over this or that project, and obviously we can't
relitigate the whole administrative process. That is why we
have an administrative process. So without entering into the
specifics of any particular project, is it that the case that
we could cut this process in a way that would save hundreds of
billions of dollars for the economy? And does this really have
hundreds of billions of dollars of impact on the economy?
Mr. DeGood. No. I mean, many of the figures in the Common
Good report I rebutted in a piece that we have up on our
website. A lot of the assumptions and a lot of data in that
just simply were not sound. There are not hundreds of billions
or trillions of dollars' worth of savings to be had for
shortening or eliminating environmental review.
Mr. Raskin. I mean, it sounds good. If we could do it, I
think most people would want to do it, but it does seem, given
that such a tiny fraction of the cases even go through the
environmental impact statement stage, that it seems hard to
believe. Okay. I think my time is up, so, Mr. Chairman, I will
yield back. Thank you.
Mr. Farenthold. Thank you very much. We will now recognize
the gentleman from Kentucky, Mr. Comer, for five minutes.
Mr. Comer. Thank you, Mr. Chairman.
Ms. Katz, my first question is can you describe the steps a
local government or private developer must take to follow NEPA?
Ms. Katz. You probably can't account for all of them
because there are so many, but if there is any nexus with the
Federal Government in the project, then the--you know, the
company has to obtain a review or a categorical exclusion from
the Federal Government. Contrary to what Mr. DeGood said,
there's no way of knowing whether or not you'll have to do in
EIS because different agencies can make different decisions in
different ways about what kind of assessment you'll have to
undertake.
That's just the beginning--the very beginning of the
process. There are--you know, depending on the type of
projects, State--we have the State and Federal regulations and
permits that one has to, you know, apply for and receive.
Mr. Comer. But why is the process so slow?
Ms. Katz. Why is government so slow?
Mr. Comer. That is right.
Ms. Katz. You know, there is--you have different agencies
all working in different ways at different time periods and,
you know, I think if you had this going on strictly at the
State level, there'd be--you know, you'd--there'd be a lot more
accountability in terms of, you know, getting people to act.
Unfortunately, Washington doesn't much care about what's
happening in Marquette, and it tends to move--and the Federal
Government has so expanded its reach that it has so much to do,
it just takes a very long to do everything.
Mr. Comer. Let me ask, on average, how long does it take
for an applicant to get signoff that their project is a NEPA
complaint on average?
Ms. Katz. The fact--the data I have is for transportation
projects, and so it takes on average now almost 7 years,
whereas in Europe, where they also do environmental permitting,
it takes about two years.
Mr. Comer. It is bad that Europe, with their type of
government, can get it done that much faster than the United
States. Let me ask, how can the process be improved to
facilitate infrastructure growth?
Ms. Katz. Well, I don't think we need NEPA at all. I mean,
NEPA was, you know, developed in 1970, and since that time, we
have, you know, a plethora of other environmental safeguards.
Most agencies treat NEPA as pro forma anyway, so I think
getting rid of NEPA would help. There are a lot of projects
that don't undergo the most intensive assessments. The problem
is that you'd never know which ones will, and those that do
cost a great deal.
Mr. Comer. My last question, you can explain how does the
high cost of permitting affect taxpayers.
Ms. Katz. Well, this goes, you know, to what we were
talking about, opportunity costs. For every day of delay, the
cost of Federal projects increase of course, and that leaves
fewer resources to do a great many other things. Also,
infrastructure improvements produce environmental, public
health, and economic benefits, and all of those, you know, are
delayed by regulatory barriers.
Mr. Comer. Well, I really appreciate ----
Ms. Katz. Not to mention even the loss of our economic
freedom. That's incalculable of course.
Mr. Comer. Absolutely. And I appreciate your answers to the
questions. I appreciate everyone who testified. You know, it is
a goal of this Congress and this administration to try to
reduce the regulatory burden. I appreciate the Chairman for
bringing this topic to be discussed today in committee, and
hopefully, this Congress can begin to take steps to try to ease
the regulatory burden so that we can get more development done,
you know, in the right way but by significantly reducing the
regulatory burden and compliance that is holding back the
private sector and holding back local governments from
expanding and investing in the infrastructure that they need.
But thank you, Mr. Chairman. I yield back.
Mr. Farenthold. Thank you very much. We will now recognize
the ranking member for five minutes.
Ms. Plaskett. Thank you, Mr. Chairman. We have been talking
quite a bit about infrastructure, and in my opening statement I
discussed the President's infrastructure plan with a budget cut
of $122 billion from the highway trust fund. Mr. DeGood, what
would you predict what happened to the Nation's highways if the
plan to cut $122 billion goes into effect?
Mr. DeGood. Well, I think we can say with a great deal of
certainty that there would be a reduction in the total amount
of maintenance and construction work happening around the
Nation. We should also recognize that the highway trust fund is
something that provides funding to every community, big and
small, urban and rural. And one of the real challenges with the
cuts that the President is proposing is that it would have this
regional impact. Places that are struggling economically would
not be able to go out and raise the kinds of revenues that this
administration is talking about them doing, and I think would
lead to further regional economic and social inequality.
Ms. Plaskett. I know that the civil engineers have given us
a D-plus. With these budget cuts, do you--I am concerned about
what our grade will be after that. Are you?
Mr. DeGood. Absolutely. I think there would be some States
and some metropolitan regions that have more dynamic economies
today that might be able to raise additional revenues, and
maybe those regions wouldn't fall behind, but I think that they
are more the exception than the norm. For instance, this White
House has pointed to ballot initiative that was passed in Los
Angeles County Measure M in 2016 by more than two-thirds of
county voters. It's important to remember that Los Angeles
County has an annual GDP of more than $700 billion. It's not
particularly representative of the rest of the country. I
myself am from Toledo, Ohio, and I know that Toledo does not
look like Los Angeles and would struggle to try to match with
that kind of revenue base.
Ms. Plaskett. I don't think many of us look like Los
Angeles. Having grown up in New York, I think that is a good
thing, maybe not a bad thing. But one of the things that you
are talking about in terms of just revenue growth and growth in
revenue--and for me, one of the other things that we look at
when we talk about infrastructure is jobs and the importance of
jobs. How many jobs could $2 trillion in infrastructure
spending create? Is there an extrapolation that will be able to
tell us what that is?
Mr. DeGood. Rough estimates on Federal infrastructure
spending are that every $1 billion produces roughly 12,500
direct and indirect jobs per year, so if you want to talk about
$2 trillion, you'd have to factor in sort of over how many
years that was. But if you're saying $200 billion a year, so
$200 billion times 12,500 is a rough estimate of what the
annual job creating power of that would be.
Ms. Plaskett. So if the same one would $200 billion in cuts
be equal to two--so that's not a loss of jobs but just jobs not
realized, correct?
Mr. DeGood. I think some of that is a loss of jobs and some
of that is the jobs are not realized. It partly depends on
whether or not States would try to step up and fill that void.
And as I mentioned previously, I think some would be able to
and some would not.
Ms. Plaskett. Ms. Katz, you discussed that you didn't think
that NEPA was really necessary, that it was pro forma in some
respects. I know that Congress recently did reforms to NEPA.
The FAST Act is supposed to have streamlined the permitting
process and expanded the list of activities that receive
categorical exclusions from environmental review. Do you have
any reports which show what the outcome of the FAST Act reform
has been?
Ms. Katz. What I did for a recent report is that I went
through both the--or the MAP-21 Act, the FAST Act, and the--
I'll tell you where it is in the second--the SAFETEA-LU Act,
and I looked at whether the reform was optional or a
requirement. And the vast majority of the so-called reforms
were categorical exclusions, and there were a handful of
requirements. And from what I've been able to tell, it hasn't
done anything.
Ms. Plaskett. But how do we know what the effects of the
FAST Act have been? You are looking at what the acts were
supposed to give, but in fact we don't have reports as yet on
what the FAST Act--what the streamlining reports have shown to
be able because it has been so recent, has it not? I mean, ----
Ms. Katz. Well, it hasn't changed the fundamental problems
with NEPA. That's why we ----
Ms. Plaskett. But we don't know if Congress' reforms have
actually had an effect as yet. Mr. DeGood, do you know what the
effects of those reforms have been? Do we have statistical
analysis as yet as to what Congress' reforms have done?
Ms. Katz. I don't know.
Mr. DeGood. We do not. I mean, the simple answer is we do
not. I believe there are three covered projects, which have
been put under the FAST-41 dashboard. But because this
administration has not appointed a director to that Permit
Steering Council, it's really not performing at the way
Congress had intended. So I think what we need to do is give it
more time and push the administration to take advantage of all
the authorities that Congress has already given them.
Ms. Plaskett. So my conclusion would be--and I see that my
time is up at this point--is that Congress has done some
reforms as yet through the FAST Act to streamline the
permitting process. However, we are asking now to--we are
having hearings to do even additional streamlines to that, but
we haven't even seen what the reforms that we recently passed
have been. And it would be my position that we should wait for
the reports to come back, impress on the President the need to
fill those slots so that Congress can get the statistical
analysis to determine if there is additional work that needs to
be done. Thank you.
Mr. Farenthold. Thank you. I will now recognize myself for
five minutes.
Mr. Iwanicki, I heard the story about all the back and
forth you went with the EPA and Corps of Engineers. To me, it
just sounds crazy. The Corps and the EPA and your county
government, the State government of Michigan, aren't we all
supposed to be on the same team looking out for the people and
the environment?
Mr. Iwanicki. I believe you're correct, and I guess that
was the most frustrating part of the whole experience is that
the EPA kept moving the goal posts on us. They kept moving the
goal line, and every time we came up with ----
Mr. Farenthold. Did somebody in your office just make
somebody at the EPA mad and say we are going to stick it to
them or do you think this is--I mean, was there personality
problem? It seems ----
Mr. Iwanicki. I don't think there was a personality
problem. I think there was an issue problem. And I think they
were trying to make an issue, in my opinion, of mining in the
upper peninsula of Michigan. And, you know, we are--helped
build this country with our copper mining and iron ore mining,
and we are a resource area for this country. And when you have
places like Copper Harbor, Ironwood, Iron Mountain and you got
two local papers called the Mining Gazette and the Mining
Journal ----
Mr. Farenthold. I have visited the area. I have actually --
--
Mr. Iwanicki.--those resources are important to us, and we
need to make sure that we do it responsibly and have the
ability to get those resources to the rest of the country.
Mr. Farenthold. Just out of a point of personal curiosity
for me, you talked about bear and cougar crossings. How do
those work? My experience with most wild animals in Texas is
they cross the road where they want to cross the road.
Mr. Iwanicki. That was a very frustrating issue with this
permit process because, you know, up until like a month before
or several months before, they didn't even recognize cougar in
the upper peninsula of Michigan. And when asked where they
wanted them, they would not tell us where they wanted of them,
and they wanted also to place fencing to channel the animals to
those crossings.
Mr. Farenthold. All right. Thank you very much.
Ms. Wilkinson, you talked about your long process. I think
you outlined three definitional changes of what a wetland is
based on the Corps and the EPA. Is there a settled-upon
definition now?
Ms. Wilkinson. It varies from district to district. The
regulations are extremely confusing and vague and seem to be
capricious in their application. Our experts in the field who
this is their life what they do, can't second-guess and can go
in knowing what is going to be claimed as jurisdictional, and a
lot of that has to do with primary and secondary indicators.
Understand in our area in Chesapeake, Virginia, the land
we're often talking about a seasonably wet. ``To the surface''
means actually 12 inches below the surface, and it is--it's
non-titled forested land, so if you went out and walked on it
or were on it, you would not think of this as the type of
wetland aquatic resource that we typically do. And ----
Mr. Farenthold. There are no endangered species or anything
that ----
Ms. Wilkinson. No. We have gotten letters to that extent.
That has been dealt with with U.S. Fish and Wildlife.
Mr. Farenthold. And you have actually offered to mitigate
on additional property and create substantially more wetlands
than would be affected under every ----
Ms. Wilkinson. Yes.
Mr. Farenthold.--every Corps report, is that correct?
Ms. Wilkinson. Yes, absolutely we did, and that's why the
DEQ held us up kind of as an epitome of the permitting process
when we, again, through the 404 regulation, so that's a ----
Mr. Farenthold. So does this change based on--I know the
Corps rotates in new colonels every three years. Does this
change based on that leadership or do you think it's beyond
just who happens to be in charge of your Corps district at the
time?
Ms. Wilkinson. It's a combination. It changes at the Corps,
changes at the EPA, also the changes in the interpretations or
the regulations when the supplements come out or any additional
information. So it's kind of all of the above adds to this
ever-changing environment.
Mr. Farenthold. Okay. And, Ms. Katz, you talked about
waivers that came out specifically during the stimulus under
the previous administration. And are the waivers sometimes
politically based or are they more factually based? I mean, how
arbitrary is the waiver process?
Ms. Katz. Well, what I can tell you is that each agency
comes up with its own waivers, and the--there is no oversight
over, you know, whether the waivers they come up with, you
know, have a solid basis beneath them. So there's a great deal
of arbitrariness in terms of what a waiver is and who gets it.
Mr. Farenthold. And just real quick because I am out of
time, but I do want to ask one other question if the committee
will indulge me. Mr. Iwanicki suggested that maybe part of his
issue getting permitted was the environmental effects of
something that the road would be servicing or the policy of not
wanting to do mining in that area. Do you see that in other
places, Ms. Katz?
Ms. Katz. Absolutely. I'm a regulatory expert, and I follow
all of these things very, very closely. And the political
science drives much of our regulatory decision-making and
policy much more than natural science.
Mr. Farenthold. All right. Thank you. I see I did go over
45 seconds. Thank you for the indulgence.
I think before we vote we do have time for one more round
of questioning since there are only three of us here. So I will
recognize Mr. Palmer again for five more minutes.
Mr. Palmer. Thank you, Mr. Chairman.
First of all, Mr. DeGood said that about 9 out of every 10
projects are not subject to delay. Is that correct?
Mr. Iwanicki. Again, it depends on the category of project
that we're talking about, but ----
Mr. Palmer. Small projects, for instance? I meant across
different Federal agencies, but yes. Typically speaking--and
again, I can speak most to service transportation--yes, 9 out
of 10 are better ----
Mr. Palmer. That hasn't been our experience in Alabama, so
I am not going to dispute what you are saying, although I think
we will research it extensively to see if that is the case. But
like I said, it is not our experience in Alabama. But given
that you have made that statement that 9 out of 10 small
projects are not subject to delay, would you support an
exemption of projects that are less than $5 million in Federal
funding, which was, you know, based on the flexibility that was
in MAP-21 and the FAST ACT? Could we ----
Mr. Iwanicki. Impacts are not tied to the dollar amount.
The impact has to do with the type of work in question.
Mr. Palmer. No, I am asking you ----
Mr. Iwanicki. No, I would not. No, I would not. It's not a
question of dollars.
Mr. Palmer. I didn't think you would, but I thought I would
ask you anyway just in case. But I want to give you an example
of--and this is in your district I believe or close to it. It
may not be. I don't know all the districts in Texas, but in
Houston I got small, medium, and large. It sounds like ----
Mr. DeGood. Everything is large in Texas.
Mr. Palmer. Yes, everything is large in Texas, but when you
hear this, you are going to appreciate how large some things
are in Texas. For instance, for a small project, a 2.7-mile-
long widening of a local road, it was delayed 33-1/2 months,
and it cost $96,000 a month, Mr. Chairman, in delays, $3.5
million total. Now, you get to the medium-sized projects, which
was on U.S. Highway 59 that was a 2.6-mile-long widening, that
was delayed almost 5 years, and that cost $297,000 a month.
That's almost $18 million. And then one more large--and we
won't stay on this line--it is a 1.5-mile-long interchange on
I-10, that was an 11-month delay, $447,000 per month, $5.1
million. It is an enormously wasteful deal going on here with a
lot of permitting delays that are absolutely unnecessary.
I yield back.
Mr. Farenthold. Thank you very much.
I will now recognize Ms. Plaskett for five more minutes of
questions.
Ms. Plaskett. Chair, I don't know if I have five more
minutes, but first, I did want to say, Mr. Iwanicki and Ms.
Wilkinson, I really understand what you are going through. In
the Virgin Islands we have had projects for, whether it be
National Marine Fisheries, Army Corps of Engineers, or others
that have taken years for permitting, as well as our own
permitting processes. Then, when you get the Endangered Species
Act on top of it, that can really drive the length of time in
which projects--we have had projects that have been delayed
because in the interim that the project was initially drawn up,
other species were put on the list after the initial project,
which changed things as well. So I really do empathize and
understand the issues that you are talking about.
You know, but one of the things I am hopeful for is that I
have been with the chairman very much in favor of some kind of
streamlining, and it is my hope that the FAST Act will do some
of that and once we do an evaluation of that, determine how we
can do even more to assist.
But one of the things that I think is an even larger issue
is the lack of funding, the lack of support that those who are
doing this process have. The Army Corps of Engineers, the
National Marine Fisheries, those at environmental protection
agencies, to be able to address the needs and the uptick in the
amount of projects that Americans are trying to do to improve
their roads, their ports, et cetera. And so I am hopeful that
rather than cutting in funding, we can support the scientists
and others who are willing to do that so that we compete with
other places such as France and Europe. For the Virgin Islands,
we are competing with places like Saint Martin and Cuba, who
have no EPA, who may be building beautiful buildings very
quickly, but I guarantee 20 years from now, those buildings
will be at fault and the environment will be compromised.
Mr. DeGood, did you have anything? I see you nodding your
head emphatically. I love it when people are agreeing with what
I said. Please help me here.
Mr. DeGood. Sure. I will just throw out a number I think to
put a perspective on this when we talk about investment and
what does it mean when the Federal Government plays a
leadership role. If we look in real inflation-adjusted terms,
1955, before the passage of the Interstate Highway Act,
compared to 1970, the Federal Government increased its
expenditures on highway construction again in real dollar terms
by 543 percent.
Ms. Katz. They were building.
Mr. DeGood. That's what it means to say that you have a
national program of infrastructure investment. That's what it
means for the Federal government to play a leadership role. So
I think if we want to be serious about addressing the backlog
that you addressed in your opening remarks that the Army
Corps--I'm sorry, that the American Society of Civil Engineers
has put forward, that's the level of Federal involvement that
we need to see.
Ms. Plaskett. And now I agree. I heard Ms. Katz say that is
because they were building. They were building it as opposed to
repairing or fixing it, correct?
Ms. Katz. They were building the interstate system.
Ms. Plaskett. Right. And I think right now, we are at a
place and time where we can have a 1950s building and
interstate system that was created in 1950s in the 21st
century. Other places like Japan, Europe have just gone three
generations ahead of us while we are just trying to repair a
1950s system rather than rebuilding a completely new system
that meets the 21st century and beyond. So I think that it is
time for us to be investing in this so that we can not only
keep up it still be the innovators and the new--as my kids say,
the new-new that is out there for the world.
I yield back.
Mr. Farenthold. Thank you very much, and I will now
recognize myself for the second round of questioning, and then
we will let you guys go.
I want to talk for a second about the EPA's ability under
section 404 to retroactively kill a project. Mr. Iwanicki, can
you tell us how that affects public projects or public-private
partnerships?
Mr. Iwanicki. I don't have any direct experience with them
killing a project after it's been permitted, but I know that
what they did with our mining project, one of--or with our road
project for the mine was that, you know, my counterparts in the
U.P. needed us to challenge them because they were afraid if
they used those same standards on all our roads in the U.P., we
couldn't do anything to fix them or create new ones for our
citizens.
Mr. Farenthold. Great. Ms. Wilkinson, do you want to talk
about how, as a private entity looking to do some development,
the prospect of after getting your permit and potentially being
under construction the EPA coming in and vetoing your permit
would affect that?
Ms. Wilkinson. Yes. Uncertainty is detrimental to any
project. It makes it very difficult when you're making your
initial investment decisions. It makes it difficult to do--
attract equity investors. It makes it difficult to get loans
when they're concerned that you could be moving forward and
have a problem. You know, we just--we don't have a seat at the
table with these other agencies. The Corps is the one day to
day that we're dealing with. And it's a very difficult hill to
climb to know that you could make it through all of these--this
time, these years, this entire process, and then have a veto.
Mr. Farenthold. I can understand the frustration. Just
moving the goalpost is bad enough, but after you've scored,
taking the points off the board has got to be even worse.
Ms. Katz, Mr. Iwanicki talked a little bit about the mining
industry in the upper peninsula of Michigan. It is my
understanding that there is a real issue here. We have got
testimony submitted for the record that indicates the United
States only attracted about 7 percent of worldwide mining
exploration dollars in 2016, down nearly 20 percent from the
late '90s due in significant part to our really burdensome,
unpredictable permitting system. Have you seen other evidence
that permitting problems negatively impact U.S.
competitiveness? And are there signs of similar effects in
other sectors of the economy?
Ms. Katz. There certainly are, and in my testimony, my full
testimony, as well as in my remarks here today, you know, I
noted just a couple of the survey results that are related to
business receptiveness in different countries, and the U.S. has
been losing ground to other countries because just in the Obama
administration alone the regulatory burden--cost burden
increased $122 billion a year. That's on top of what already
existed. And so the regulatory load is becoming unsustainable.
And when that happens, people take their money elsewhere.
Mr. Farenthold. Thank you very much. I appreciate
everybody's testimony. I would like to thank the members and
staff for putting together a great hearing and the work you and
the folks that helped you did. I would like to thank you all
for appearing before us today.
We will keep the record open for two weeks for any members
to submit written opening statements or questions. If we get
any of those questions, we will forward those to you by mail
and would appreciate your taking a few moments to answer those.
If there is no further business, without objection, the
subcommittee stands adjourned.
[Whereupon, at 3:07 p.m., the subcommittee was adjourned.]
APPENDIX
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Material Submitted for the Hearing Record
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