[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


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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

                              ----------                              
                                                                   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

                              ----------                              


                        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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