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

           FEDERALISM IMPLICATIONS OF TREATING STATES AS STAKEHOLDERS

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

                                    HEARING

                                   BEFORE THE

                             COMMITTEE ON OVERSIGHT
                             AND GOVERNMENT REFORM
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                               FEBRUARY 27, 2018

                                   __________

                               Serial No. 115-68

                                   __________

    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, Maryland
    James Comer, Kentucky
    Paul Mitchell, Michigan
    Greg Gianforte, Montana

                         Sheria Clarke, Staff Director
                        William McKenna, General Counsel
       Christina Aizcorbe, Intergovernmental Affairs Subcommittee Staff
                                    Director
                        Sharon Casey, Deputy Chief Clerk
                     David Rapallo, Minority Staff Director

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on February 27, 2018................................     1

                                   WITNESSES

    The Honorable Gary Richard Herbert, Governor of Utah
        Oral Statement...............................................     4
        Written Statement............................................     7
    The Honorable Susana Martinez, Governor of New Mexico
        Oral Statement...............................................    10
        Written Statement............................................    12
    The Honorable Clement Leroy Otter, Governor of Idaho
        Oral Statement...............................................    14
        Written Statement............................................    16

                                    APPENDIX

    National Governors Association Statement for the Record submitted
      by Mr. Palmer..................................................    44
    Western Governors Association Statement for the Record submitted
      by Mr. Palmer..................................................    49
    Recommended Principles for Regulatory Reform submitted by Mr.
      Connolly.......................................................    81
    NACo Statement for the Record submitted by Mr. Connolly..........    82
    Letter of January 20, 2017, from NACo submitted by Mr. Connolly..    88
    NewDEAL Statement for the Record submitted by Mr. Connolly.......    95

           FEDERALISM IMPLICATIONS OF TREATING STATES AS STAKEHOLDERS

                                  ----------

                           Tuesday, February 27, 2018

                      House of Representatives,
                  Committee on Oversight and Government Reform,
                                                       Washington, D.C.
        The committee met, pursuant to call, at 10:04 a.m., in Room
    2154, Rayburn House Office Building, Hon. Gary Palmer
    presiding.
        Present: Representatives Palmer, Gowdy, Duncan, Jordan,
    Sanford, Amash, Gosar, Meadows, DeSantis, Walker, Blum, Hice,
    Grothman, Hurd, Mitchell, Maloney, Norton, Lynch, Connolly,
    Kelly, Plaskett, Krishnamoorthi, Raskin, Welch, and DeSaulnier.
        Also Present: Representatives Bishop, Gonzales-Colon, and
    Zeldin.
        Mr. Palmer. The committee will come to order. Without
    objection, the chair is authorized to declare a recess at any
    time.
        I would like to thank Governor Herbert, Governor Martinez,
    and Governor Otter for the time they are taking today to share
    important testimony with the committee and the Speaker's Task
    Force on Intergovernmental Affairs.
        The committee and task force have been engaged in a review
    of federalism, identifying opportunities to improve the
    partnership between the Federal Government and State local
    counterparts. Your testimony will serve an important piece of
    this narrative as we look toward reform.
        It is my understanding Governor Herbert must leave by noon,
    so I will keep my statement short to maximize time for
    questions, and I will encourage our members to be sensitive to
    the time. And if there is a question toward the end of the five
    minutes that would require a longer answer, I would encourage
    the witnesses to provide the answer in writing.
        To the extent members do not need to use their full five
    minutes, please be mindful of the Governor's time. We will work
    our way through questions quickly to accommodate everyone's
    schedule.
        We would like to welcome those members of the task force
    for joining us today. I ask unanimous consent to waive members
    of the Speaker's Task Force on Intergovernmental Affairs for
    today's hearing. Without objection, so ordered. I will also ask
    unanimous consent to insert statements from the National
    Governors Association and Western Governors Association into
    the record. Without objection, so ordered.
        Mr. Palmer. I now recognize the ranking member, my friend
    Mr. Connolly, for five minutes for his opening statement.
        Mr. Connolly. I thank the chair, and I thank my friend Mr.
    Bishop in particular with the intergovernmental task force we
    both serve on, and I want to welcome our distinguished guests,
    the three Governors, for joining us this morning.
        We are conducting this hearing in collaboration with the
    Speaker's Task Force on Intergovernmental Affairs. As a member
    of that task force, I have been glad to work with Mr. Bishop
    and our colleagues over the course of the past year on several
    meetings and events centered around the topic of improving
    coordination among all of the levels of government.
        One thing our task force has done well is to promote an
    intergovernmental dialogue that incorporates all perspectives.
    While I would have preferred to include in on today's panel a
    local government perspective as well as the State perspective
    with equal billing, I hope we can invite in the near future
    American mayors and local government officials to testify to
    the full committee on this topic. And I was gratified that
    Chairman Gowdy agrees with that request. This is a dialogue
    best had without segregating the different levels of government
    in a way that promotes the very divisions we seek to address.
        In the spirit of promoting intergovernmental collaboration,
    I intend to introduce the Restore the Partnership Act to
    establish the National Committee on Intergovernmental
    Relations, a successor to the Advisory Commission on
    Intergovernmental Relations that operated from 1959 through
    1995. The commission will promote mechanisms for fostering
    better relations among the levels of government; provide
    technical assistance to the Federal, executive, and legislative
    branches in the review of proposed legislation; recommend the
    most desirable allocation of government functions,
    responsibilities, and revenues among the various levels of
    government; and help coordinate and simplified tax laws and
    administrative policies to achieve more orderly and less
    competitive fiscal relationship among the levels of government.
        As a former local government official who served for 14
    years on the Fairfax County Board of Supervisors, including
    five years as the chairman of the county, I have witnessed the
    good, the bad, and the ugly of intergovernmental relations. In
    our community, we led efforts to improve regional air quality
    enabled by strengthened Federal clean air regulations. We also
    dealt with the burden of unfunded mandates on localities like
    those imposed at the Federal level by the No Child Left Behind
    Act.
        And in Virginia, we adhere unfortunately to the Dillon
    Rule, which means local governments in my State only have those
    powers expressly granted to them. The Dillon Rule severely
    constrains the ways in which local governments can raise
    revenue to pay for public safety, public education, and
    mandates placed on localities by both the Federal and State
    Governments, and I think that is really important. Not all of
    the problems emanate from Washington. Many of them from the
    local government perspective emanate from State capitals.
        The revenue burden is why those of us from Dillon Rule
    States are particularly offended by the Trump budget and the
    administration's so-called infrastructure plan. Undergirding
    both is an assumption that the Federal Government defunds an
    activity or shifts the funding burden down to State and local
    governments and that there are untapped and unlimited revenue
    reserves that will fill the vacuum left by the Federal
    Government.
        The infrastructure plan, for example, would be paid for by
    taking money from Federal transit investments, and the plan
    would flip the Federal highway funding match on its head by
    requiring local governments to come up with an 80 percent of
    project costs as opposed to the current 20 percent. A Penn
    Wharton Budget Model team found that the plan would likely lead
    to an additional at best $30 billion in State, local, and
    private spending, 98 percent less than the $1.3 trillion the
    administration has claimed would be raised by the plan.
        The President's budget would compound the infrastructure
    investment crisis by retreating on Federal funding for things
    like Metro and the types of infrastructure loans, TIFIA loans,
    that have helped fund transit throughout the United States. The
    budget also sweeps the rug out from under local affordable
    housing initiatives by eliminating entirely the Community
    Development and Community Services Block Grants, as well as the
    HOME Investment Partnership Program. These housing cuts alone
    would cost my communities in Fairfax and Prince William
    counties right across the river nearly $10 million, local
    government, in affordable housing investments. The proposed
    cuts would expose the conservative panacea of block granting as
    potentially a more expedient method of cutting Federal
    investments in local communities.
        I look forward to our discussion today and hope it is not
    bound by rigid ideology. We should be mindful that not all
    unfunded mandates consist of the Feds putting mandates on
    States. All 50 States guarantee their citizens the right to a
    public education, but it is often local governments that bear
    the majority of the financial burden for public education. In
    my community, for example, 80 percent of the cost of public
    education is borne my local taxpayers, not by the State.
        Additionally, not all regulations or mandates are bad.
    There are Federal regulations that ensure everyone's right to a
    quality education. This Federal intervention was necessitated
    by State- and local-level intransigence in the past. This
    equality was hard fought for, and we should never again open
    the door to the abuse and discrimination that preceded it.
        Finally, we cannot ignore that a lack of regulation can be
    a form of an unfunded mandate in itself. For example, pollution
    from a State that lacks strong environmental protections can
    and will drift into neighboring States, creating air-quality
    issues and health problems that impose costs on both private
    and public sectors. Through the work of this committee and the
    task force, I hope we can create bipartisan support for
    unfunded mandate reform and find broad agreement that the
    Federal Government can and should improve its coordination and
    collaboration with State, local governments, and tribal
    governments. I hope the discussion today furthers our work
    towards those ends.
        And I thank you, Mr. Chairman, for calling us together for
    this hearing.
        Mr. Palmer. I thank the gentleman.
        I am now pleased to introduce our witnesses, the Honorable
    Gary Richard Herbert, Governor of the State of Utah; the
    Honorable Susana Martinez, Governor of the State of New Mexico;
    and the Honorable Clement Leroy Otter, Governor of the State of
    Idaho and a former Member of Congress and the old '70's TV show
    Welcome Back Kotter, welcome back Otter. Welcome to you all.
        Pursuant to committee rules, all witnesses will be sworn in
    before they testify. Please rise and raise your right hand.
        [Witnesses sworn.]
        Mr. Palmer. The record will reflect all witnesses answered
    in the affirmative. Please be seated.
        In order to allow time for discussion, please limit your
    testimony to five minutes. Your entire written statement will
    be made part of the record. As a reminder, the clock in front
    of you will show you your remaining time. The light will turn
    yellow when you have 30 seconds left and red when your time is
    up. Please also remember to press the button to turn your
    microphone on before speaking.
        Our first witness to give testimony will be Governor
    Herbert from Utah.

                           WITNESS STATEMENTS

                 STATEMENT OF HON. GARY RICHARD HERBERT

        Governor Herbert. Well, thank you. And, Chairman Gowdy,
    Chairman Palmer, Chairman Bishop, Ranking Member Connolly, and
    members of the committee and the Speaker's task force, I thank
    you for inviting me here today. I've been speaking about this
    issue for many years on--about the importance of federalism,
    what some describe as the vertical separation of powers between
    the State in the Federal Government, and to me this hearing is
    a sign of progress.
        Often when we talk about federalism, we focus on its
    constitutional foundation. That's important, but there's a very
    practical reason for federalism, to create better policy. As
    States, we've tried a wide variety of approaches to solving
    specific problems and developed expertise across the spectrum
    of public policy. When our political culture mistakenly
    presumes that the greatest expertise resides in Federal
    agencies, Americans miss out on the lessons already learned by
    the States.
        Today, I'd like to suggest several Federal laws that need
    to change to respect the separation of the power and
    responsibility and facilitate better policymaking. First, I
    would like to point out that laws and rules are poor
    substitutes for cultural norms, and what we really need is a
    cultural change within the Federal Government. Congress and
    Federal agencies must stop viewing States merely as--State
    input as merely a box-checking exercise rather than the genuine
    attempt to learn from what we're doing.
        Some infractions of federalism are process problems. The
    U.S. Code is littered with suggestions that Federal agencies
    consult with States as simply one among many stakeholders. For
    example, the Water Resources Development Act suggests that the
    Secretary may consult with key stakeholders, including State,
    county, and city governments. Similar language is found in the
    National Historic Preservation Act, the Energy Policy Act, and
    many, many more.
        And even as the title of today's hearing implies, the
    States are--States are not stakeholders. We're sovereign
    governments, partners who have been involved in--should be
    involved at the beginning of and throughout the policymaking
    process. The boilerplate language of these laws should be
    amended to reflect that reality.
        In the same vein, the National Environmental Policy Act,
    NEPA, requires a Federal agency to work with States to develop
    various alternatives and an environmental impact statement but
    also allows the agency to ultimately ignore input from the
    States. Sometimes the NEPA process feels like a little more
    than an exercise in generating high-quality paperwork. The law
    should be amended to give States not just a voice but a vote in
    the selection of a NEPA alternative, a change that would make
    Federal land management in the West far more democratic and
    responsive to the voters.
        States should also have a more substantive role in
    execution. The Endangered Species Act authorizes the U.S. Fish
    and Wildlife Service to write management plans, designate
    critical habitat, and impose land-use restrictions. This
    doesn't make necessarily sense to me. Utah's Division of
    Wildlife Resources is staffed with some of the best biologists
    in the field, who have a profound knowledge of Utah's ecology
    and wildlife. There is no good reason States shouldn't take the
    lead in species recovery.
        I don't want to leave you with a completely negative
    picture. We are currently enjoying a season of good
    relationships with many Federal agencies, many of whom are
    trying to push decision-making back down to the States, and
    that is refreshing, though it does illustrate what I said
    earlier about the importance of a culture of cooperation with
    the States. Good cooperation should not depend on a particular
    official or administration; it should be simply the way things
    are always done, regardless of who is currently in power.
        Again, I think we are making progress. Yesterday, several
    of my colleagues and I met with Speaker Ryan and later with
    Minority Leader Pelosi. Representative Pelosi quoted--reminded
    all of us of the famous quote of Judge Brandeis who said States
    of the laboratories of democracy, and she said let's let States
    help lead in developing good policy. I couldn't agree more.
        I also added another famous quote that most of you know
    about our Father of our Constitution James Madison who, in
    talking about in trying to ratify the Constitution and
    alleviate the fears that the States had about this new stronger
    Federal Government said to the States not to worry, Federalist
    45, it's an interesting read and it's a short one so it won't
    take a long time, but he said don't worry about the Federal
    Government because the powers we've given the Federal
    Government are few and defined, article 1, section 8 of the
    Constitution. He went on to say the powers we've given to the
    States, though, are numerous and indefinite.
        We need to get back to the vision of our Founding Fathers.
    We do need to change the culture and the thought process. We
    the American people are asking you the Federal Government to do
    more than your responsibilities would entail, more than what
    our Founding Fathers expected you to do. Rather, they should
    be--in fact, if they have problems and issues, they should
    first ask the States and their local governments and see if
    they can find a solution to the problem. We should get back to
    asking the States. As I said in my initiative as chair of the
    National Governors Association three years ago, the States,
    which are closer to the people, much more responsive to the
    people, quicker to act, and doing it less expensively and more
    effectively, are where in fact we should be working. States are
    finding solutions and improving people's lives.
        Thank you. I look forward to your questions.
        [Prepared statement of Governor Herbert follows:]
      [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Palmer. I thank Governor Herbert.
        Governor Martinez, we look forward to your testimony.

                   STATEMENT OF HON. SUSANA MARTINEZ

        Governor Martinez. Chairman Gowdy, Ranking Member Connolly,
    Task Force Chairman Bishop, and members of the committee and
    the task force, I am very grateful for this opportunity to
    speak with you today about the balance of power between the
    States and our Federal Government.
        As Federal legislators, you all face an incredible
    challenge in finding solutions that work for a nation of 320
    million people in urban, rural, and frontier areas spread over
    3.8 million square miles. In fact, our nation's incredible
    geographic and human diversity makes finding a cookie-cutter
    solution next to impossible. What works in South Carolina may
    not work in Virginia. And what works in New Mexico may not work
    even for our neighbors in Utah, which is precisely why it is
    imperative the Federal Government recognize the sovereignty of
    States, work with us, and allow us to lead and to innovate.
    When you do, great things really do happen.
        The New Mexico Human Services Department implemented our
    State's Medicaid managed care program, Centennial Care, in 2014
    under a demonstration waiver granted by the Centers for
    Medicare and Medicaid Services. Through this innovative
    program, managed care organizations administer a full array of
    services to New Mexicans through an integrated model. Care
    coordinators across the State help to ensure members receive
    the right services at the right time. New Mexico is a leader in
    providing home- and community-based services, and we are
    actually decreasing per-person healthcare costs. This
    innovation and resulting success is possible because the
    Federal Government allowed New Mexico to design and implement a
    Medicaid program that works for our State and for our people.
        House Resolution 1333 sponsored by Congressman Earl
    ``Buddy'' Carter of Georgia would provide us with even more
    freedom to further improve program efficiencies. When we do not
    receive that flexibility, inefficient Federal processes tend to
    have dire consequences that reverberate across my State.
        As another example, it takes our Energy, Minerals, and
    Natural Resources Department just 10 days to review new oil and
    gas permits, but it takes the Bureau of Land Management in New
    Mexico an average of 250 days. This delay has led to a BLM
    backlog of more than 800 applications for permits to drill in
    Mexico at a cost of approximately $1.9 million to New Mexico
    and $3.4 million to the Federal Government per day. Annually,
    this amounts to 100--excuse me, to $710 million for New Mexico
    and $1.2 billion for the Federal Government in lost and delayed
    revenue.
        If the BLM were to delegate its oil and gas revenue process
    to New Mexico and to other Western States for those--for these
    resources on Federal lands--States like Montana and Utah--it
    would result in billions of dollars of additional State and
    Federal revenue.
        During my time as New Mexico's Governor, I've seen two
    different sides of the State-Federal partnerships. At times,
    regulations and edicts from Washington have brought rigid and
    formulaic programs to New Mexico that do not allow us to adapt
    them to our unique States. That tide seems to be turning as
    Federal agencies like the Department of Interior and the
    Department of Transportation are engaging with us to face
    common challenges. As elected officials, we all strive to
    deliver the best possible results for those that we represent
    as well. We do that best when we work together and--
    constructively and collaboratively as true partners.
        And I thank you for this opportunity to speak with you.
        [Prepared statement of Governor Martinez follows:]
     [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Palmer. Thank you. Governor Otter, if you would give
    your testimony.

               STATEMENT OF CLEMENT LEROY ``BUTCH'' OTTER

        Governor Otter. Well, thank you, Mr. Chairman, and I
    appreciate very much the opportunity to be here. Chairman Rob,
    good to see you again--Chairman Bishop, good to see you again,
    and Ranking Member Connolly. It is indeed--members, it is
    indeed a pleasure to be here today and have the opportunity to
    appear before you and talk about the relationships between the
    Federal Government and the Federal Government's creators, the
    States.
        I come to you in my 12th year as Governor of the great
    State of Idaho. I have approximately 113 days, 13 hours, 27
    minutes until I leave office, but then, who's counting? During
    my tenure, there's been three presidential administrations. At
    times, they have provided me the opportunity to see federalism
    at its finest. Idaho has been treated as a true partner with a
    meaningful voice in national policies and most--that most
    directly impact all our citizens.
        At other times and far too often, I have experienced the
    kind of dysfunction and heavy handedness from our national
    government that make a mockery of what the Founders referred to
    as federalism. In fact, I've seen both interpretations of
    federalism come into play on a single issue not only during my
    six years here in Congress but also as my three terms as
    Governor.
        The limited and narrow powers granted to the Federal
    Government by our Constitution have been expanded
    exponentially, constantly reaching far beyond those originally
    enumerated and the central powers relegated through the Tenth
    Amendment to the dustbin of history. The kind of mission creep
    is most apparent in Idaho and throughout the West wherever the
    Federal Government controls access to the enormous and vast
    swaths of our lands. Instead of being recognized as sovereign
    States with equal standing in our union and essential interest
    at stake, when it comes to managing our resources, we find
    ourselves continually having to ask the Federal Government,
    ``Mother, may I?'' And the problem increasingly extends beyond
    land management to issues as diverse as immigration and health
    care.
        Nevertheless, hope abounds. I want to express my
    appreciation to Congress and the current administration for
    working to restore the standing of States as true partners in
    governance. After years as an afterthought, how we collaborate
    and develop our own solutions once again matters again.
        In Idaho, this rebirth of federalism is resulting in
    development and application of innovative approaches to
    addressing shared challenges. With the encouragement of
    President Trump and the Congress and consistent with our role
    as the States as laboratories of democracy, I signed an
    executive order in January of this year directing my Department
    of Insurance to seek creative ways of improving access to
    affordable health care coverage in Idaho.
        We have seen premiums for the Affordable Health Care Act
    skyrocket in Idaho over the past three years. As a result,
    individuals and families are forced to make unacceptable
    choices: paying for health care or paying for groceries. But
    encouragement by elimination of the individual mandate and this
    administration's expressed support for greater flexibility,
    Idaho will now have the opportunity for an off-exchange's State
    plan that provides essential coverage at more affordable rates.
        Despite some overwrought arguments to the contrary, our
    plan actually will complement the ACA. That's because Idaho is
    requiring that insurance company carriers that offer choice in
    the State-based plans must also provide ACA-qualified plans.
    And most importantly, all ACA and State-based plans will be
    within the single risk pool, thereby broadening the risk and
    providing for the individual marketplace.
        Instead of standing idly by as more and more hard-working
    Idahoans are priced out or left out of the ACA insurance
    coverage, we decided to tackle the problem head-on using a
    first-of-its-kind approach, and we are confident that it will
    work.
        Another good example of our improving relationship with the
    Federal Government relates to a program known as the Good
    Neighbor Authority. In 2014, during the last administration,
    the 2014 Farm Bill authorizes States to lead forest restoration
    projects on national forest lands. That collaborative, cross-
    jurisdictional effort is increasing the pace and scale of
    timber harvest projects in areas prone to insect damage,
    disease damage, and subsequent wildfire.
        Over the next three years, we expect to treat nearly 11,000
    acres of Federal Forest Service land using the Good Neighbor
    Authority, harvesting 70 million board feet of timber and
    bringing $14.5 million in revenue. Good Neighbor Authority
    improves the forest health, reduces fire risk, boosts the rural
    economy, and pays for itself. It truly is the gold standard for
    cooperative federalism.
        We are similarly encouraged by the Trump administration's
    commitment to streamlining efficient and costly environmental
    review process. Decisions too often are being made in
    anticipation of being sued rather than based on sound science
    and local conditions.
        And finally, we are--continue to benefit from the
    flexibility that's being offered in Every Student Succeeds Act.
    Idaho now is empowered to be the architects of our own K
    through career education in Idaho.
        While this recent renewal of classic federalism is welcome
    and refreshing, there still remains much work, and I appreciate
    this committee's attention to that work. Again, thank you for
    the opportunity to testify before you today. Your continuing--
    and thank you also for your continuing service to the United
    States of America. And, Mr. Chairman, I stand ready to answer
    questions.
        [Prepared statement of Governor Otter follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Palmer. I thank the witnesses for their testimony. The
    chair now recognizes the gentleman from Utah, the chairman of
    the Committee on Natural Resources and chairman of the
    Speaker's Task Force on Intergovernmental Affairs, Mr. Bishop.
        Mr. Bishop. Thank you, Gary, and thank you, the three
    Governors, for joining us here today. It is extremely good to
    have you back here. And I am grateful to be here, especially
    for the task force. I noticed I think about six members of the
    task force have been or were here or are leaving here at the
    same time, whatever.
        Let me tell you what I am going to ask each of you so you
    can be thinking about it and then preface this for just a
    second.
        So, Governor Herbert, I want to hit you up on the
    consultation concept again, go into more detail on that. Ms.
    Martinez, I do want to talk to you about how we can make this
    effort on federalism a bipartisan approach, and for Governor
    Otter, I want to talk to you again about what you called
    mission creep or creeping conditionalism. You have to realize,
    I mean, there are about 266 former legislators who are Members
    of Congress. I don't know why we forget our lessons we learned
    in State legislature, but it seems when we come here to
    Congress, all of a sudden we want to solve all sorts of
    problems, regardless of how those problems are solved.
        There is something that is very unique now as both parties,
    both liberals and conservatives, are now talking about
    federalism under different titles more than ever before. If I
    notice, you know, Senator Feinstein has a bill that deals with
    federalism dealing with drones and Representative Cohen has one
    that deals with drug policy and Senator Baldwin has one that
    deals with health partnership. And one of you mentioned a
    resolution by Representative Carter. People are now talking
    about that. This is an opportunity we have of actually trying
    to implement it.
        So, Governor Herbert, let me start with you. You talked
    about collaboration, how important it is. We have long talked
    about consultation is important. How do we actually define
    consultation here to allow that State and local governments are
    ensured that they are consulted and that their comments are
    taken seriously? For example, we have had court cases in the
    State of Utah where commissioners' decisions have been thrown
    out because they said the commissioners had too much influence
    vis-a-vis NGOs. How do we ensure that States actually do
    fulfill that consultation role?
        Governor Herbert. Well, I think part of it is what I talked
    about, a culture change. We need to go back and review the role
    of the Federal Government in conjunction with the role of the
    States. It is often forgot that Federal Government was, as
    Butch Otter has said, created by the States. And we are
    sovereign States. We are, as Justice Brandeis said, you know,
    laboratories of democracy. We do have a role to play. And that
    is part of an attitude thing. For whatever reason, we have got
    to the point where we seem to ignore the role of the States and
    aren't listening to what the States are doing and let them
    perform their role as laboratories of democracy.
        Mr. Bishop. You went through a litany of laws in which it
    is allowed. Would it be better if we actually wrote laws so it
    was mandated?
        Governor Herbert. I think that, one, there ought to be a
    mandate to listen and respect the role of the States and,
    again, it's not just a matter of checking off a box and saying,
    well, we've got your input, now we'll ignore it.
        Mr. Bishop. Okay.
        Governor Herbert. We think that the States should have a
    role to make decisions, and we ought to devolve the decision-
    making power back to the States. We'd get a better result and
    less cost to the taxpayer.
        Mr. Bishop. Governor Martinez, how can we make this concept
    of federalism bipartisan? I mean, you represent a purple State,
    whereas in Utah and Idaho I think we have got zoning ordinances
    that keep Democrats at bay.
        Mr. DeSaulnier. If only you had a little purple.
        Mr. Bishop. Well, I am not going to say anything about
    Californians. So how do we make this issue bipartisan?
        Governor Martinez. Thank you for that question. So sorry, I
    forget the button. Thank you very much for that question,
    Congressman Bishop. I think it's important that we remember
    that we're not politicians but we're actually leaders. I am a
    Republican Governor in a State where we're outnumbered three to
    one by Democrats and independents, and so therefore, I have a
    very clear understanding that I represent all the people of New
    Mexico and not just those who voted for me or those of the same
    party.
        We have done this many times through, for example, when I
    expanded Medicaid. When I expanded Medicaid, it was not
    necessarily something that was a Republican thing to do.
    However, I went on a listening tour, private and local
    communities, private businesses, I did it with organizations
    and advocacy groups and wanted to hear why I should or should
    not expand Medicaid. And at the end of the day I did what was
    right for the people of New Mexico. I actually did expand
    Medicaid and I have also, through that process, costs per
    month--per person and per month have actually gone down, and
    that's why we're a leader in New Mexico because this was not a
    political decision.
        Mr. Bishop. I appreciate you doing that because you're
    talking about the attitude that Governor Herbert was talking
    about, and in the five seconds I have got left, I appreciate
    what you are talking because we are going to have an energy
    bill that tries to partner with the States to allow the States
    to do all the paperwork, keep the Federal standards but the
    States do the paperwork to see if we can actually work together
    more. I hope that comes in there.
        Butch, I am out of time, but if there is a second round, I
    want to come back to this idea of mission creep and creeping
    conditionalism with you. I will yield back but--sorry.
        Mr. Palmer. The chair now recognizes the gentleman from
    Virginia, Mr. Connolly, for five minutes.
        Mr. Connolly. Thank you, Mr. Chairman.
        And, Governor Martinez, I appreciate the decision you made
    on the expansion of Medicaid. I believe Governor Kasich, your
    Republican colleague in Ohio, made a similar decision. And we
    are now wrestling with it yet again in Virginia. It is costing
    my State billions of dollars not to do it. It is 400,000 people
    not getting coverage that otherwise would get it. And
    ironically, it is the red parts of the State, it is rural areas
    that are seeing the pressure on their hospitals and clinics
    closing because they financially can't make it. And the
    expansion of Medicaid would save those hospitals and provide
    care to people who desperately need it. So I applaud your
    nonpolitical decision, and I think that is the spirit in which
    Republicans and Democrats ought to approach governance,
    especially at the State and local level.
        All three of you come from Western States, and I know that
    if we had the Governor of New York and the Governor of Virginia
    and some other Governors, we might have a different perspective
    about the Trump administration and how helpful it has been or
    not, and I guess the jury will be out. We will see. But the
    philosophy you all are sharing with us, I find myself largely
    in agreement in principle. And, Governor Herbert, I was shaking
    my head listening to thinking, you know, a lot of wisdom there,
    but doesn't that apply to local governments, too? Are any of
    you Dillon Rule States?
        Governor Herbert. I come from local government.
        Mr. Connolly. You come from local government.
        Governor Herbert. I was a local county commissioner, and I
    have concerns about making sure that the State and the
    legislature and the Governor respect the role of the counties
    and the cities, so certainly there's some tension there.
        Mr. Connolly. Yes.
        Governor Herbert. The difference is, though, the States
    created those local entities, so they have--they are the
    mother. They're the ones that created it. The Federal
    Government is created by the States, that miracle in 1787, so
    it's a matter of roles and responsibilities under the law.
    You're right; it should not be a partisan issue. It's the
    vision of our Founding Fathers embedded in our Constitution.
        Mr. Connolly. Yes. Certainly, there is a legal argument
    that local governments are the creatures of the State. They are
    created by the State. But practically speaking, that doesn't
    really get us very far. In my State, the local government I
    headed is the biggest in the State and one of the biggest in
    the United States. We were a full-service--you know, my budget
    is bigger than the--you know, our budget was bigger than seven
    States' budgets. And what we constantly were subjected to--and
    this is not unique to my State. You see this tension in lots of
    States.
        But, you know, the State legislature was prejudiced against
    the more affluent northern part of the State, which, by the
    way, funds about half of the State. And so when you look at
    formulas for allocating resources, we always got the short end
    of the stick. In fact, one egregious example, there was a
    library fund years ago created, of course mostly funded by
    Northern Virginia by my taxpayers, and they actually had a
    formula that said no jurisdiction larger than 900,000 could
    qualify for benefits from the fund. So we funded the fund, and
    we got zero benefits because of course we were the only
    jurisdiction with more than 900,000 people in the State of
    Virginia it just so happened. It got that egregious.
        And, you know, we get real nervous when people talk about
    block granting things because that goes to the State capital
    where we know we are going to get the short end of the stick.
    We won't get a fair share. And so I am just curious, since none
    of you actually address local government in your opening
    remarks--understandably, you are talking about your
    relationship with the Feds--but what is good for the goose is
    good for the gander. What about your local governments? Have
    you ever taken a careful look at the State level about the
    unfunded mandates you impose, not you personally but the State
    does and sort of the imposition sometimes you make in laws and
    regulations that they then have to implement? Because the
    ultimate implementer of everything is local government.
    Governor Otter, you are shaking your head.
        Governor Otter. Yes. Well, thank you, Representative
    Connolly. I can tell you this, that in my 12 years as Governor
    and all the legislation--probably 350 pieces of legislation
    that I signed--am responsible for either signing or not signing
    or vetoing every year, in the most cases, the limitations that
    are put on local units of government are actually edicts from
    the Federal Government. And you can go right through almost
    every agency starting with the EPA and the Clean Water Act and
    those sort of things, so if a local government wants to develop
    in a certain area, they must certainly follow through all the
    ----
        Mr. Connolly. If I can interrupt, Governor Otter, because
    of time. Forgive me. But, I mean, that is not true in the case
    of education funding formulas. That is a State formula, not a
    Federal formula. And it has a huge impact on local governments
    and the tax rates they have to charge or not charge to fund
    their local education. In my case 80 percent of our school
    funding we bear because the State has a funding formula that
    just so happens to discriminate against certain parts of the
    State and benefits other certain parts of the State. I am sure
    politics has nothing to do with it. That is not a Federal
    issue, that is a ----
        Governor Otter. Well, perhaps ----
        Mr. Connolly.--State issue.
        Governor Otter.--we are a little more fair in Idaho because
    we actually assign so much money for each and every classroom
    unit no matter whether it is in Weippe, Idaho, or Boise, Idaho,
    the largest school district or the smallest.
        Mr. Connolly. My time is up. I want to learn more about
    that. Maybe we could get you to Richmond and educate them a
    little bit about ----
        Governor Otter. Be happy to.
        Mr. Connolly.--the funding formulas. Thank you, Mr.
    Chairman.
        Mr. Palmer. The chair recognizes the gentleman from North
    Carolina, Mr. Meadows, for five minutes.
        Mr. Meadows. Thank you, Mr. Chairman. I thank each of you
    for your testimony here today. The first one, the committee has
    reviewed a number of major Federal regulatory actions where the
    Federal Government actually did not adequately consult with the
    States. Some of those were with the EPA Army Corps of
    Engineers, the Department of Labor and its overtime rule,
    Department of Interior in terms of stream buffers are just a
    few examples of those.
        So the executive order 13132 on federalism and unfunded
    mandates actually required consultation with State and local
    governments. Can each of you very quickly let me know how you--
    how do you think that this particular executive order is
    working? Is the consultation actually taking place? And so,
    Governor, will you go ahead and--Herbert, if you will go ahead
    and start.
        Governor Herbert. Thank you. The fact that we are here
    today talking about it, I think we see progress. I'm hopeful.
    The fact that former Speaker Nancy Pelosi, first thing out of
    her mouth yesterday meeting with a few of us Governors was,
    hey, Judge Brandeis, laboratories of democracy, we need to let
    you guys take the lead on these policy issues. I think we are
    getting heard. I think there's been an attitudinal change that
    needs to continue, and so I feel good about the direction we're
    headed.
        Mr. Meadows. All right. Governor Martinez?
        Governor Martinez. Yes, sir. Thank you. Certainly, there's
    been more collaboration in the last two years than I
    experienced in the previous six years as being Governor. I've
    actually been asked to sit at tables within the Department of
    Transportation, as well as sitting at the table with a
    variety--yesterday with a committee in reference to our prisons
    and the reforms that can take place for individuals that are
    moving from within the prisons and out into the communities.
    That never happened before. I never even received a phone call
    when things were taking place. And particularly when an
    endangered species was being listed, it was--the State wasn't
    given the opportunity to protect that species as it's supposed
    to be given in order to eliminate the Federal involvement so
    that we can protect it and continue to have that not on the
    list of endangered species.
        Mr. Meadows. All right. Thank you, Governor. Governor
    Otter?
        Governor Otter. Congressman, I can think of several times
    when we have been consulted many times and never listen to.
    I've served as Governor under three presidential--under three
    different Presidents, three different administrations, and from
    time to time early on in my first two years when the Bush
    administration, things began to change and not for the better.
    They got worse for the next eight years. Now, they're starting
    to get better again. So simply in--simply requiring
    consultation doesn't always work. Sometimes, there has to be a
    result and whose side are we going to make the final decision
    on, the States or the Federal Government's side?
        Mr. Meadows. All right. So let me real quickly in the two
    minutes I have remaining follow up on that because what you are
    saying is it is not enough to just listen but it is actually to
    take that input and actually put it into action. So would you
    say that what we are seeing is actually more efficient policy
    and cost savings as a result of that collaboration?
        Governor Herbert. Clearly, as we look back and just again
    one of the controversial issues of the Affordable Care Act,
    Obamacare, the Governors were never one time consulted and
    asked what's our opinion, yet we're going to be on the
    frontlines of having to implement the program.
        Mr. Meadows. So what you are saying is is this
    collaboration could actually save the American taxpayer dollars
    ----
        Governor Herbert. Dollars and ----
        Mr. Meadows.--in a real way?
        Governor Herbert.--develop better policy.
        Mr. Meadows. Yes. Okay.
        Governor Herbert. And certainly, again, we ought to have
    the States weigh in, and we ought to not just be listened to
    but respected and considered and let us be part of the
    decision-making process.
        Mr. Meadows. All right. Governor Martinez, do you agree
    with that?
        Governor Martinez. Well, I agree that certainly in the
    education reform that was discussed by Congressman Connolly is
    that we were--in collaboration with the Federal Government,
    the--under the Obama administration, we were in collaboration,
    we were in agreement on education reforms, but it was our
    Democrat State legislature that was not in collaboration with
    the States and local communities.
        Mr. Meadows. But I can't help with that problem so ----
        Governor Martinez. I understand, but there are
    opportunities that we have actually agreed.
        Mr. Meadows. All right. Governor Otter?
        Governor Otter. I would say yes, and improving daily.
        Mr. Meadows. All right. So if that is indeed the case,
    would you encourage more reforms of this type where we can
    actually streamline this, yes or no in my 12 seconds? Yes,
    Governor?
        Governor Herbert. Yes, the more you involve the States, the
    better it's going to be.
        Mr. Meadows. Governor?
        Governor Martinez. Absolutely. There is no cookie-cutter
    solution that can be done for all States.
        Mr. Meadows. Governor?
        Governor Otter. Yes.
        Mr. Meadows. All right. Thank you. I yield back.
        Mr. Palmer. The chair recognizes the gentleman from
    Maryland, Mr. Raskin, for five minutes.
        Mr. Raskin. Mr. Chair, thank you so much for putting
    together this terrific panel, and it is an honor to be in the
    presence of these Governors.
        Everybody loves federalism in principle. Everybody loves
    federalism in theory, in the abstract. The question is whether
    you are willing to defend federalism when it cuts against your
    deepest-held policy preferences. And so I want to try to get
    beyond the level of principle, which we all embrace, to the
    critical issues that are facing us in this Congress.
        Let's start with marijuana. Right now, this might be the
    greatest federalism issue in the country. We have dozens of
    States that have embarked upon experiments with medical
    marijuana, with decriminalization of marijuana, with treating
    it as a public health problem rather than a criminal problem,
    and we got the Attorney General of the United States, Attorney
    General Sessions, who wants to come down like a sledgehammer on
    the States to crush all of these experiments and to revive a
    war on marijuana. And I just wonder whether any of you are
    willing to take a position on behalf of States' rights and
    federalism against what the Attorney General is trying to do?
    Governor Otter, perhaps you could start and just quickly go
    down.
        Governor Otter. Of all the States that I border, four of
    them have legalized recreational marijuana, and it would be one
    thing if that stopped at the border, but it doesn't stop at the
    border.
        Mr. Raskin. Well, nothing ever stops at the border. That's
    always the argument that the nationalizers take against people
    who I thought you were siding with, which was the States'
    rights people.
        Governor Otter. But it doesn't cause harm to my State ---
        Mr. Raskin. That is always the argument made it. Do you
    see? There is the problem.
        Governor Otter. Well, maybe that ought to give ----
        Mr. Raskin. We all love federalism in theory, but are we
    really willing to stick to it when it comes to a specific case
    where we are against it? I assume you don't favor the
    decriminalization of marijuana?
        Governor Otter. I do not.
        Mr. Raskin. Okay. So, Governor Martinez, where do you stand
    on it?
        Governor Martinez. As a prosecutor for 25 years and on the
    border of New Mexico with the Mexican border, I do not support
    the legalization of marijuana. I completely support ----
        Mr. Raskin. As a matter of States--you mean as a matter of
    exercise of your State power. The question is do you think the
    Federal Government should crush the experiments in the States
    with dealing with the marijuana problem?
        Governor Martinez. As the law stands today, it is my
    responsibility as a lawyer, as the Governor to the people of
    New Mexico. I have to comply with the laws of the United States
    Government, and that means there's no legalization of marijuana
    in my State. However, we do have a medical marijuana program
    that is very successful.
        Mr. Raskin. And they want to crush that, too. Governor
    Herbert?
        Governor Herbert. You've put the States in a Catch-22
    problem. You have a Federal law that says it's illegal. If you
    don't like that, change the law.
        Mr. Raskin. Yes, so you ----
        Governor Herbert. So that allows us then as States to take
    on the responsibility on a statewide basis. We are learning.
    We're next-door to Colorado. I've worked with Governor
    Hickenlooper. He's told us as a State and other Governors be
    very careful, watch we do. I ----
        Mr. Raskin. So you are supporting a change in Federal laws
    ----
        Governor Herbert. I support ----
        Mr. Raskin.--to allow the States ----
        Governor Herbert. Change the Federal law.
        Mr. Raskin.--to experiment ----
        Governor Herbert. Yes, you can't ----
        Mr. Raskin. Okay.
        Governor Herbert. You put ----
        Mr. Raskin. So let's try another one, which is again
    something we are dealing ----
        Governor Herbert. Take it off the schedule I so we can
    actually do the research necessary to backup ----
        Mr. Raskin. Good.
        Governor Herbert.--science to back up what--at least the
    anecdotal stories.
        Mr. Raskin. Here is another one that is happening right
    now. There is an effort to wipe out medical malpractice laws
    across the country and to impose one Federal one-size-fits-all
    solution in terms of medical malpractice where the awards are
    set when you get a jury trial and so on. Do you favor that, or
    do you think each of the States should be able to decide for
    themselves what their medical malpractice laws are?
        Governor Otter. We already have that in Idaho.
        Mr. Raskin. You have what?
        Governor Otter. We have limitations on medical malpractice.
        Mr. Raskin. Sure, but they are set at different places in
    different States. You think we should have one-size-fits-all
    national solution or do you think the States should be able to
    decide for themselves?
        Governor Otter. I do not think we ought to have a national
    solution.
        Mr. Raskin. Governor Martinez?
        Governor Martinez. I agree completely.
        Mr. Raskin. Yes?
        Governor Herbert. State decision-making, no one-size-fits-
    all.
        Mr. Raskin. Okay. Well, so there I just want you to know
    you are siding with the Democrats in Congress against the
    legislation that is being pushed by the Republicans ----
        Governor Herbert. It shouldn't be partisan.
        Mr. Raskin. And that is why I am with you. I appreciate the
    fact that you are standing up for the federalism principle, you
    know, in reality when it counts. Let me just do one more. The
    conceal-carry permits, there is an attempt to wipe out all of
    the laws of the States on concealed carry to say that if you
    get the right to carry a loaded weapon in Florida, which has
    very liberal laws on this, you should be able to come into my
    State, for example, which doesn't allow people who have
    domestic violence offenses or other violent misdemeanor
    convictions to get one. Do you think that should be a matter of
    national law or do you think it should be up to the States who
    gets to carry a loaded pistol in their ----
        Governor Herbert. I can tell you ----
        Mr. Raskin. Yes.
        Governor Herbert.--it's clearly--it's been tested all over
    the Supreme Court, it's a State issue. We have reciprocity. We
    have people that come to Utah, get a concealed weapon permit
    when 31 other States ----
        Mr. Raskin. And you can make the reciprocity agreements and
    ----
        Governor Herbert.--run State by State by State ----
        Mr. Raskin. Yes.
        Governor Herbert.--reciprocity, there should not be a
    national norm.
        Mr. Raskin. Got you. Governor Martinez?
        Governor Martinez. Absolutely, I am--I have a conceal-carry
    license, and I at first was very leery, but I certainly
    appreciate the fact that it's something that can be decided
    within the State because, as a law enforcement family, my
    father, my husband, my son, it always worried me that citizens
    were carrying it. However, with the training that we have
    implemented, it is a very safe thing to be able to have a
    concealed carry.
        Mr. Raskin. And you don't want us trampling the laws of New
    Mexico to say we know better than you, we are going to bring it
    down to the lowest common denominator?
        Governor Martinez. That's exactly right.
        Mr. Raskin. Governor Otter?
        Governor Otter. I believe the same. It's a State issue.
        Mr. Raskin. Well, I thank you very much for standing up for
    federalism in that case, and I am happy to yield back, Mr.
    Chairman.
        Mr. Palmer. I thank the gentleman. The chair now recognizes
    the gentlewoman from Puerto Rico, Ms. Gonzalez-Colon, for five
    minutes.
        Ms. Gonzalez-Colon. Thank you, Mr. Chairman. And thank you,
    all Governors, for being here today and for your testimony.
        Coming from Puerto Rico, we also have got the same problem
    in the States, and when these executive orders may not apply to
    the island as we do not have that sovereign power, I may say
    that all those regulations did apply and do apply to Puerto
    Rico. And each agency it says the executive order shall have
    accountable process to ensure meaningful and timely input by
    State and local officials in the development of regulatory
    policies that have federalism implications within 90 days. Of
    course, that 90 days never occurred, and that designation that
    comes with that mandate always put a burden on some of the
    States to comply with those regulations. So what kind of burden
    in terms of the expenses all of your States are incurring to
    comply with all those regulations in your States? Governor
    Otter?
        Governor Otter. Well, I haven't got--I haven't added up the
    list of the costs that we've had, but I can tell you this:
    Nearly every public policy that we deal with in Idaho we have
    to factor in what the Federal Government wants us to do, as
    well as how much of the cost they want us to suffer. So I would
    tell you when we establish public policy, we really need to see
    who it helps and who it harms. And sometimes there's very
    little attention or care paid, especially from the Federal
    level.
        Ms. Gonzalez-Colon. Governor Martinez?
        Governor Martinez. Yes, thank you so much. And certainly
    our prayers continue to be with your people ----
        Ms. Gonzalez-Colon. Thank you.
        Governor Martinez.--in Puerto Rico. Regulations, for
    example, with BLM and the duplication of work that takes place
    with the Federal Government and the State Government, the types
    of testing that is done, environmental testing, that's a
    duplication of costs not only to State Government but also to
    the Federal Government and the people who are conducting
    business within our State. You know, time is money, and when
    something can take 10 days within a State regulation, what
    takes 250 days in a Federal regulation, you can see where time
    is money and that business people will end up going someplace
    else to conduct business where it is easier and better to do it
    because they don't have the Federal land that they're having to
    deal with with BLM but actually having to deal with just State
    land.
        Ms. Gonzalez-Colon. Are we talking about NEPA?
        Governor Martinez. NEPA is one of those that is required,
    yes, and then sometimes it's not required but they're making us
    do it anyway, which ends up being more expensive. There are
    regulations that actually have exclusions, but we're made to
    comply nonetheless.
        Ms. Gonzalez-Colon. And how much will that cost your State?
        Governor Martinez. Oh, cost--the costs that I was quoting
    you just a while ago, it costs the Federal Government in actual
    dollars. It is $1.9 million to New Mexico per day and $3.4
    million to the Federal Government per day in revenues. That is
    what is being lost right now because of these regulations.
        Governor Herbert. Let me just speak about Utah, and again,
    it kind of goes to what Representative Connolly was talking
    about, local government. When we put together our budget, we
    have local government comes to us and said we'll trade you one
    dollar of Federal money that comes to the local government for
    85 cents of a State dollar, and that's because the red tape,
    the regulations are so expensive they'll give a discount of 15
    percent just to get a State dollar.
        Why does it take so long for the Federal Government to make
    decisions? We had a question with Interior here on a road,
    whether it should be opened or closed on some of our public
    lands. It took us 7-1/2 years, 7-1/2 years to get a decision,
    and the only reason we got a decision was because we eventually
    decided to sue to make them make a decision. That is time is
    money, and when you have local governments say we'll give you
    the Federal dollar, give us back just 85 cents, we know that
    the cost of the Federal oversight is really getting too
    expensive and too time-consuming.
        Ms. Gonzalez-Colon. So you know that with President Trump's
    infrastructure plan we also are looking for a streamlined
    process in NEPA. Are you in favor of that?
        Governor Martinez. Yes.
        Governor Otter. Yes.
        Governor Herbert. Absolutely.
        Ms. Gonzalez-Colon. Can you provide some examples of
    specifically what can we be looking at that process directly
    for the States?
        Governor Otter. Well, I can tell you that we find most of
    the standards for our highway systems in Idaho if there's any
    Federal participation in those--in some cases if it's our State
    highways paid for by our State-only money leading to a Federal
    connection--intersection, those are required to meet the same
    standards, and those are standards that may work very well in
    Virginia or New York or someplace else, but in Idaho it's a
    little different.
        Governor Martinez. I agree. Certainly, I think NEPA has its
    place, but to have it overly expansive on a State that not
    necessarily--like, we're very rural, and to have similar type
    of testing. I believe in the facts and the evidence and the
    data that shows that--whether or not NEPA is something that
    should be applied to a particular project. If it doesn't
    support it, then we shouldn't be doing it just for the sake of
    that's how we've always done it.
        Governor Herbert. I think it speaks to the lack of trust.
    Again, the Federal Government doesn't believe that our own
    environmental scientists can make the assessment and the
    evaluation. We're doing a reconstruction of our interstate
    along the Wasatch front. It's the same right-of-way and roads
    that we've had for 50 years. Why are we having to go--because
    we're expanding capacity--a complete revival of an
    environmental assessment costs time and it's a waste of time
    and money.
        Ms. Gonzalez-Colon. Thank you, Mr. Chairman.
        Mr. Palmer. The chair now recognizes the gentlelady from
    the District of Columbia, Mrs. Holmes Norton, for five minutes.
        Ms. Norton. Thank you very much, Mr. Chairman.
        Much of the discussion both from those of us in Congress as
    we question you and from you have, it is assumed, an
    adversarial relationship. Of course, there is a built-in
    adversarial relationship when you are part of a whole and yet
    we are very different. We are exquisitely different from coast
    to coast.
        On the other hand, the deep pockets of the Federal
    Government does allow it, along with the Constitution and
    Federalist notions, to fund important benefits that the States
    want.
        I want to ask about Medicaid expansion because of the way
    you all have approached it. There are States that apparently
    prefer to leave a considerable amount of money, indeed most of
    the money the Federal Government would pay for--most of it on
    the table, which is to leave the health care of their own
    residents on the table. Governor Martinez, you did not make
    that decision. An article was provided from the Albuquerque
    Journal where you stated, ``Access to health care has the
    potential to improve the well-being of our families so our kids
    can learn better in school and so Mom and Dad can be better
    parents and more productive employees.'' You did accept
    Medicaid expansion.
        Governor Martinez. I did.
        Ms. Norton. And would you discuss the remarkable results
    there? The figures I have show that your uninsured rate was 25
    percent and that it is down now to 10.2 percent. Are those
    figures correct?
        Governor Martinez. Yes, ma'am.
        Ms. Norton. Governor Herbert, so you found that rather than
    assuming the Federal Government was an adversary, working with
    the Federal Government, particularly when there was money on
    the table and the health and lives of your own residents was at
    stake, that that is not always an adversarial relationship. It
    can be a very beneficial relationship, perhaps the way the
    Founders saw it.
        Governor Herbert, you of course tried to expand Medicaid in
    Utah, and I commend you for the several compromises that you
    tried to achieve so that Medicaid could be--or so that health
    care could be available for more in Utah. And you were not able
    to do that. You said, ``The poorest among us will continue to
    struggle until Utah leaders can find agreement on this
    difficult issue.'' What was difficult with the Federal
    Government funding the lion's share of health care and your
    compromising approach so as to try to bring together people who
    might otherwise be adversaries?
        Governor Herbert. Well, one, I respectfully reject the
    attitude that it ought to be adversarial. I think it ought to
    be collaborative. We have difference of opinion. There may be
    some tension there, but it shouldn't be adversarial. We should
    try to solve the people's problems.
        Ms. Norton. Exactly.
        Governor Herbert. All the money that the Federal Government
    gets comes from State taxpayers. You take the money from us,
    you come back, you come up with programs. Sometimes we like
    them, sometimes we don't. We learn from the States. We learn
    from Susana Martinez, New Mexico, and how it works in there and
    we'll learn maybe that will--we'll want to adopt in the State
    of Utah.
        Ms. Norton. Well, why were you unable, since you were
    willing to compromise, to get Medicaid expansion?
        Governor Herbert. Because we could not convince members of
    the legislature, particularly in our House side, that it would
    be the fiscally responsible thing to do in the long term. It's
    not just a matter of what can we get today, get some of our
    taxpayers' money back, but what's going to be the ongoing
    obligation in the long term? Can we afford to buy today and not
    afford to buy tomorrow?
        Ms. Norton. Yes, that was the reason that that was given
    even though there was a huge amount of money on the table and
    no indication that Congress was going to pull it back.
        Governor Otter, did you mention that you had tried some
    sort of compromise in this regard as well?
        Governor Otter. I have and I continue to. In fact, I have
    one before the Legislature this year.
        Ms. Norton. I just want to say that what this does indicate
    is that the Governors are closest to the people, and while we
    see some States that would rather leave that health care--leave
    where, for example, Governor Martinez was unwilling to leave
    the health care of her residents, increasingly we do see more
    States. Even though the affordable health care has been under
    such assault in Congress, we now see more States wanting to be
    a part of the program, and I think that has everything to do
    with who is closest to the people. We can debate the matter
    here. You have got to live with the matter in the States. Thank
    you for your testimony.
        Mr. Palmer. I thank the gentlelady. The chair now
    recognizes the gentleman from Iowa, Mr. Blum, for five minutes.
        Mr. Blum. Thank you, Mr. Chairman, and thank you to our
    panelists today for being here. I must say, first of all, I am
    a huge, huge supporter of the Tenth Amendment. In addition to
    it being in the Constitution, I also know that Governors and
    their State legislators can do most everything less expensive
    than this Federal Government and produce better results. You
    see here in Washington--this is not news to you all--there is
    no penalty for failure. Typically, when a program here doesn't
    produce results, we just spend more money on it. It is always
    we haven't spent enough money. But you all are CEOs of your
    States and you have to live with the results, so thank you for
    being here and thank you for what you do.
        I don't have an agenda here but I would like to chat about
    sanctuary cities, sanctuary counties. I am from eastern Iowa,
    and when I am out there talking to people, they just don't
    understand how cities, counties--it is not States per se, but
    how they can choose to ignore the law. And we have had
    Presidents who, if they didn't like a law, let's just not
    enforce it. You know, I think you would all agree one of the
    reasons we are the greatest nation on the face of this earth is
    because of the rule of law, and we are a nation of laws. And I
    am going to listen. I would like to have your opinions about
    sanctuary cities, how you deal with that in your State. I don't
    know if you have any in your States, but what your thoughts on
    that are.
        Governor Herbert. Well, us going first, it's a challenge
    because we do respect our local governments in Utah, so our
    cities, our mayors and council people, our county
    commissioners. We don't support anything other than the rule of
    law. We think if anybody goes contrary to that, that's a
    mistake. If you don't like the law, change the law, whether
    it's a Federal law or a State law. So I think we're asking for
    chaos and division in our country if we don't adhere to the
    rule of law.
        Mr. Blum. Do you have sanctuary cities in Utah?
        Governor Herbert. We--maybe Salt Lake City. I think the
    mayor there was--indicate we--we're not going to round up
    people and violate their peace and tranquility to be upholding
    the law of the Federal Government, so they don't feel like it's
    their responsibility. So I don't know if I'd say we're a
    sanctuary city there, but that would probably be the only place
    it would be considered at all. I don't think they claim to be a
    sanctuary city.
        Mr. Blum. Recently, I saw on TV--you probably all did as
    well--the Oakland, California, mayor saying that she felt it
    was her--ethically, she needed to forewarn potentially illegal
    immigrants that ICE was going to conduct operations in their
    area, in their neighborhood. Governor, can you give me your
    thoughts on that?
        Governor Herbert. Well, my thoughts really are it's a
    Federal issue. We actually tried to find a State solution. We
    went to the--we were challenged in court by the Obama
    administration. We lost where the court said this is a Federal
    issue. I later met with President Obama and he talked about his
    executive order, and I said, well, you're trying to do the same
    thing I did. We tried to do it by law and a State-right
    position. You're trying to do it by executive order, and you're
    going to lose in court, too, because it's a congressional
    responsibility.
        It's disappointing I think to many people across the
    country that we can't come together on that. Maybe there are
    different aspects we have disagreement, but we all agree we
    should secure the borders. Why don't we just do that? We--is
    not just the gate--or, excuse me, not just the fence, the wall,
    again talking to President Obama about this. The gate doesn't
    work. We ought to work on the gate so the people come and go as
    we think would be appropriate, and he agrees. He says, why
    can't we get Congress to act? That was President Obama to me.
    Well, that's the frustration I think of many people across the
    country.
        Mr. Blum. Well said. Governor Martinez?
        Governor Martinez. Yes. As Governor, I took an oath to
    enforce the rule of law, whether that be the Federal Government
    and the implementation of their Federal laws and the State
    laws. However, I also understand that the enforcement of
    immigration laws is that of the Federal Government and not of
    the State. I do not support sanctuary cities. I think it is
    something that is--can be very chaotic. We are releasing
    individuals from jails, et cetera, that are violent offenders
    and not notifying the Federal Government that someone is within
    our community who is a violent offender, whether be released
    from prison or from the State or from local jails that now are
    amongst the population of the people.
        And I have a responsibility to protect the people of the
    State of New Mexico, the citizens of New Mexico from anyone who
    is violent and being released from a jail. So I signed an
    executive order just shortly after becoming Governor and doing
    away with sanctuary State policies. That doesn't mean cities
    have not declared themselves as a sanctuary city. However, I am
    very much not in favor of that.
        If the law needs to be changed, the Federal law, then
    change it, but the confusion that is taking place is going to
    end up in some very terrible outcomes, and so that is why I
    don't support it. I support making sure that we're enforcing
    the rule of law.
        Mr. Blum. With the indulgence of the chair, could Governor
    Otter answer my question?
        Mr. Palmer. I yield additional time to Governor Otter.
        Mr. Blum. Governor Otter?
        Governor Otter. Well, thank you very much, Congressman. You
    know, it really is a pretty simple--28 words. ``Those powers
    not delegated to the United States by the Constitution nor
    denied to the States by it are reserved to the States
    respectively or to the people.'' And if you want to view the
    scope and the jurisdiction of supremacy, look to article 1,
    section 8--or, pardon me, section 8 of article 1 because those
    enumerated powers are exactly what the Tenth Amendment was
    talking about. That is where the government--Federal Government
    is supposed to exercise supremacy. Those are the limited and
    delegated powers.
        Mr. Blum. Thank you. I have gone past my time, but thank
    you for your service to your States. Thank you very much.
        Governor Otter. Thank you.
        Mr. Connolly. Mr. Chairman?
        Mr. Blum. Thank you, Mr. Chairman.
        Mr. Palmer. Yes?
        Mr. Connolly. Mr. Chairman, if you would just allow me real
    quickly, picking up I think on a distinction made by Governor
    Herbert. There is a distinction between declaring oneself a
    sanctuary city or county and a local police force or sheriff's
    office saying it is a Federal responsibility for enforcement,
    not ours, and we are not going to take that on ourselves. Those
    are two different things, and I think I heard Governor Herbert
    make that distinction. Certainly, in my community that is our
    position, one that we don't declare it sanctuary but we don't
    feel that it is our responsibility locally to enforce Federal
    immigration laws as such. That is a Federal responsibility.
    Thank you, Mr. Chairman.
        Mr. Palmer. The chair recognizes the gentlewoman from New
    York, Mrs. Maloney, for five minutes.
        Mrs. Maloney. Thank you, Mr. Chairman, and I thank all the
    Governors for your service and for your testimony today.
        I would like to ask you about President Trump's
    infrastructure proposal and how it is going to affect your
    States. When the President released his proposed budget for
    2019, he announced the vague outlines of a plan that he claims
    will boost investment in infrastructure in our nation. We need
    it. His plan includes $40 billion through a rural block grant
    program, as well as $130 billion in various funding pots for
    which States will compete. But even if they win this
    competition, States would receive only 20 percent of the amount
    needed to fund an infrastructure project, and States and
    localities would have to contribute the remaining 80 percent of
    the cost.
        And he further went forward with his idea to allow States
    to impose tolls on all interstate highways, and he says this
    would allow them to raise the revenue for the infrastructure
    investment.
        So I would like to ask all of you, would you raise tolls on
    interstate highways to generate revenues for the infrastructure
    funding under this plan for your State? Are you planning to
    raise tolls which--if you want to go down just starting with
    Governor Herbert and Martinez, Otter.
        Governor Herbert. There may be some appropriate use of toll
    roads. We see them around the country. Certainly, the
    Pennsylvania Turnpike and others have been worked out very
    successfully. I'm not really in favor of toll roads. I think
    that we need to address our infrastructure needs that has been
    neglected. I think President Trump is right about that since
    the Eisenhower days. But probably an adjustment of the gasoline
    tax, which has not been done for, what, 25 years or so ----
        Mrs. Maloney. I agree.
        Governor Herbert. So if you're going to do that, at least
    to recapture what we've lost from inflation, it would probably
    be a good thing.
        That being said, you know, States aren't waiting for the
    Federal Government. Again, we appreciate the partnership when
    it's appropriate. You're taking money from us, and we'd like to
    get some of it back. But we just completed one of the larger
    construction projects in America, $1.7 billion of our
    interstate, did it all with State dollars.
        Mrs. Maloney. Governor Martinez, would you support a gas
    tax for infrastructure?
        Governor Martinez. No, ma'am, I would not.
        Mrs. Maloney. Okay.
        Governor Martinez. We've actually done something very
    different in New Mexico. Having had continuing resolutions with
    the budget, we had to become very creative in how we were going
    to widen roads, make roads more accessible. We do not have any
    tollbooths in New Mexico, and so what we've done is made sure
    that there was skin in the game for local communities,
    counties, the legislators that represent those counties and
    municipalities in the State legislature, that their port
    dollars are going towards true infrastructure. The State
    would--and then the port--the part of the infrastructure
    dollars that were given to me were part of that, and then
    Federal dollars were.
        Also private sector, they were laying, for example--
    Facebook, when we brought them in, they were going to lay down
    cable for the internet, and what we did through the Department
    of Transportation is actually dig the trenches for them to be
    able to then lay down the cable that was necessary for the web.
    And so these are public-private community local projects for
    very big projects of road infrastructure that were not only
    funded but completed and completed on time and on budget.
        Mrs. Maloney. And, Governor Otter, would you support a gas
    tax or would you support tolls on your interstate highways?
        Governor Otter. As recently as two years ago, I increased
    the gas tax in Idaho and also the licensure of automobiles. One
    of the problems with just looking at the gas tax is that we
    have so many automobiles that are either 50 miles to the gallon
    but still want the same amount of safety, still want the same
    amount of space on the highway but are getting 50 miles to the
    gallon or a run-off of electricity.
        In Idaho--in fact a lot of places in the West--it would be
    very difficult to put in toll roads because of the access to
    the freeway--to the State freeways. So that's something we'd
    have to--we might be able to find some isolated places where we
    could do that, but I can tell you this, the infrastructure in
    all the West and especially Idaho--because we are a value-added
    manufacturing State and there's only one way to get our
    products to market, and that's down that highway.
        Mrs. Maloney. Okay. And also, his budget would cut $122
    billion from the existing Highway Trust Fund over 10 years, and
    this means States would receive less money from Federal highway
    and transit formula programs, which currently match at a rate
    of 80 percent Federal to 20 percent local. So let me ask all of
    you. Would your States like to receive less money from the
    Highway Trust Fund?
        Governor Herbert. You know, we would take less money if
    you'll take away the red tape and redundancy. I've met with our
    contractors in Utah, seven major road builders, and say if we
    could get the money block granted to the States without all the
    Federal red tape, we'll build the same number of roads for 50
    percent less money. You don't have to have more money, you just
    cut and save.
        Mrs. Maloney. Well, my time is expired. Thank you.
        Mr. Palmer. I thank the gentlelady.
        Mr. Connolly. Mr. Chairman, I ask unanimous consent to
    enter into the record statements from the National Association
    of Counties on this subject and from the NewDEAL Coalition,
    Debbie Cox Bultan, the executive director ----
        Mr. Palmer. Without objection, so ordered.
        Mr. Connolly. I thank the chair.
        Mr. Bishop. Mr. Chairman?
        Mr. Palmer. Mr. Bishop.
        Mr. Bishop. I have one request if I could from the task
    force at the end of this. All of you have spoken very well
    about how, if everyone has good intentions, we can always get
    along. The problem that Congress has to try and come up with
    rules to make sure that if people are jerks, we can still get
    along. So what the task force needs from you three, if you
    would be kind enough, are some specific recommendations of what
    we can do not just to ensure that you are consulted but you are
    remembered for it. But we can talk about--I didn't get a chance
    to ask you about the mission creep, how we can deal with those
    issues, the mission creep. Should States have not just
    standing, which they have, but special standing in order to sue
    on issues that are imposed upon you? Some specific ideas that
    can be very helpful to ensure that, regardless of what happens,
    States are recognized, States are understood, and States have
    the right to have that statement.
        So I am asking that for the task force, not for the
    subcommittee purposes but for the purpose of the task force as
    we try and come up with recommendations. So anything you could
    give me that is specific as to what we can do statutorily to
    help on all these issues, as the gentlelady from the District
    said, you know, what you do with the money that is laying on
    the table.
        Governor Otter. Representative Bishop, I can tell you this,
    consult us at the beginning. Generally, what we find is we
    come--we are invited late to the party. Public policy has
    already started to see its first or second or third draft by
    the time--if they ever do ask the States--by the time the
    States are asked. And make it a requirement for the agencies
    that are going to put in new rules, new--which become laws and
    which become those laws that we have to operate by, but ask us
    at the beginning. Is this something you folks need? Are we
    solving a problem here or are we looking for--just to create
    another law?
        Mr. Bishop. Perfect. Help me find a place that we can
    statutorily mandate that.
        Governor Herbert. Can I add, Congressman Bishop, that it
    would be nice if the Congress would say--when issues come
    before them and say is this best handled at the State level?
    That'll be the first question. Maybe it's their responsibility.
    Maybe they can address this better rather than just taking on
    anything and everything. I think, again, we the people of
    America are asking you to do more than was ever envisioned by
    our Constitution or our Founding Fathers. And the States are
    adept. As Congresswoman Pelosi said yesterday, laboratories of
    democracy. You guys should be leading in on policy. We have a
    lot of responsibility. You have a few. Article 1, section 8, as
    Governor Otter mentioned. So ask yourself, is this really
    something we should do or should we let this be handled by the
    States?
        Governor Martinez. I just have one last statement if I may.
    I am certainly hopeful that federalism is not just a principal
    or a theory but that it is actually a practice as a United
    States citizen. And with that I think we will actually become a
    better country every single day, understanding that the States
    have the solutions for their people that may be very different
    from our neighbors, allowing us to take lead in many of the
    projects, many of the things in which the Federal Government
    cannot make a single solution that satisfies us all.
        Mr. Connolly. Would my friend from Utah yield for a minute?
        Mr. Palmer. I don't know. Would I? It depends. What are you
    going to say?
        [Laughter.]
        Mr. Connolly. I would certainly support his request, but I
    would remind ourselves respectfully we have three Governors
    from Western States in front of us. We don't have the Northeast
    perspective, we don't have the West Coast perspective, and this
    is big country and there could be other points of view. And I
    just hope that in inviting feedback to inform us in considering
    a statute that we make sure we have broad feedback from other
    experiences, including, well, other States just so that we are
    well-informed at that we are getting all balanced points of
    view, with no disrespect at all because I found the testimony
    quite convincing this morning in many respects, but I just ask
    that of my friend from Utah.
        Governor Herbert. Can I just respond? Because I'm the one
    here who's been the chairman here three years ago of the
    National Governors Association, a bipartisan organization. We
    get along actually very well, very congenial, and we respect
    each other's difference of opinions on things. So I would
    welcome all 50 States and the five territories for that matter
    to weigh in on this issue. But I can tell you, having
    experienced my involvement for eight years with the National
    Governors Association, most all of us would say give us more
    flexibility. Let us take on the challenges. We don't need the
    one-size-fits-all mentality that comes too often out of
    Washington, D.C. Democrats and Republicans alike would agree
    with that. So I think get everybody. I think you'll find that
    we have a lot of consensus on this issue amongst the States.
        Mr. Connolly. I had dinner last night with your colleague
    John Carney of Delaware, and he said very nice things about
    you.
        Governor Herbert. Well, and I'll say nice things about him.
    We were Lieutenant Governors together, so we've been around for
    a long time.
        Mr. Palmer. Just for the record, we gave every opportunity
    for a Democratic Governor to join the panel and would really
    like to have heard from them. In that regard, what I would
    recommend is that if there are other Governors, Republican or
    Democrat, who would like to submit a statement for the record,
    the record will be held open for two weeks. I will remind you
    of that at the conclusion of the hearing.
        At this time I will recognize the gentleman from
    California, Mr. DeSaulnier, for his questions for five minutes.
        Mr. DeSaulnier. Thank you, Mr. Chairman. And being from
    California, I wish our Governor was here. It would be even more
    entertaining; he always is.
        Let me just say this challenge of course has been with this
    country forever, how this relationship works. When I was on the
    executive board of the National Conference of State
    Legislatures, to your comments, Governor, I found that
    environment to be very collegial, bipartisan, being a Democrat
    from the bay area and the State Senate. So there are examples
    where this works. And I think when you are involved in that, as
    you are, you realize that 50 States are very different and
    there are lots of communities within that.
        But there are compelling places, and I want to talk
    specifically about addiction and opioid addiction in my
    questions and the results of the bipartisan commission that the
    administration put together that was chaired by former Governor
    Christie and what the relationship is in terms of best
    practices to this epidemic and the Federal Government's role.
        So one of the key quotes from that report from Governor
    Christie is ``One of the most important recommendations in the
    final report is getting Federal funding support more quickly
    and effectively to State governments who are on the frontlines
    of fighting this addiction battle every day.'' And my district,
    very different from other places, it is a more upscale part of
    the bay area, or much of my district, and it is upper middle
    income. I have lots of meetings and put a good deal of my time
    in my former job working with the Attorney General's Office,
    now U.S. Senator Kamala Harris to deal with that. So knowing
    that it is very different in different communities, what you
    need from the Federal Government, and could you express the
    urgency you need it when it comes to addiction and opioid
    addiction in your States? Can you start?
        Governor Herbert. We're not asking for much from the
    Federal Government. Again, I am cognizant of your budget
    challenges. The fact that you're $20-21 trillion in debt is not
    lost on a State that has a AAA bond rating. We try to live
    within our means and not spend more than we take in and we have
    rational debt.
        So, that being said, I'm not looking to the Federal
    Government. We're trying to do this--this has been an issue
    that's been raised by the National Governors Association four
    years ago. We're on the cutting edge of this in the States.
    We're doing things in our respective States to address this
    issue. We're putting warning labels, we're--there's talk about
    litigation, lawsuits against the pharmaceuticals that have
    evidently withheld information about the addictive nature of
    these drugs. That's probably something that's going to be in
    our future. I think tobacco litigation.
        We are training our doctors better. We have now put a
    database in the State of Utah so that doctors can know if
    you're doctor-shopping and what your issues have been, if
    you've been in the emergency room, if you've been to a doctor,
    and your general practitioner, they can all access this on the
    internet without violation of HIPAA laws. We've got that wired
    in so there's permission given.
        So, again, we're doing things at the States. We're learning
    from each other. And again, we'll homogenize together as we
    find the successes that are taking place in the States. So I'm
    not asking for anything from the Federal Government.
        Mr. DeSaulnier. Either of you?
        Governor Martinez. No, actually, we've done the very same
    thing in making sure that we can prevent that kind of doctor-
    shopping. You know, you go in for a root canal and you get 30
    days' worth of opioids, which is really completely unnecessary.
    However, that person can become addicted, and therefore, the
    database is very helpful for us to make sure that there isn't
    that doctor-shopping because from the opioids and we're not
    able to continue to have access, then you turn over to heroin,
    and heroin is very accessible because we're on the border. It
    may be very different from Montana, may be very different from
    the middle of the country, but right there in New Mexico it is
    very accessible and very cheap.
        Governor Otter. During our meetings this week, we had a
    very good roundtable on--and we had a report from the task
    force to which you referred that Governor Christie held. And
    there was one thing that almost all the States need, and that
    was a review of all Federal rules and regulations that inhibit
    us from defending ourselves from that epidemic.
        Mr. DeSaulnier. And that one thing I would ask for your
    help with, Representative Carter, a Republican from Georgia, a
    pharmacist, he and I have worked closely together. In
    California, we spent $5 million, which was not significant in
    our budget, to make sure that the Department of Justice and the
    medical board has real-time information for people who are
    doctor-shopping. So one of the things that Representative
    Carter and I have been working on is interoperability as all
    States try to bring this system up.
        And then, just lastly, until I came to Congress, I never
    was a States' rights advocate, but being from California, I am
    becoming more and more of one. When you see things that work
    well in one State that is very different from another State,
    just if we could have more of a conversation that I would see
    as more bipartisan, more evidence-based, that what works in the
    bay area is not going to work in many of your jurisdictions and
    vice versa. Some of that is politically driven obviously, but
    when we really look at the evidence and what works, including
    on immigration, I wish we had more of those discussions, and I
    hope you have them when you meet with your colleagues.
        Governor Otter. Thank you.
        Mr. DeSaulnier. Thank you, Mr. Chairman.
        Governor Martinez. Thank you.
        Mr. Palmer. I thank the gentleman.
        The chair now recognizes the gentleman from Wisconsin, Mr.
    Grothman, for five minutes.
        Mr. Grothman. Thank you very much. It is an honor we have
    three Governors at one shot.
        The committee has heard from State and local governments,
    and I certainly hear from them at home all the time that the
    compliance of Federal regulations is very, very expensive. And
    lawmakers have shared compliance with Federal--some lawmakers
    have shared compliance with Federal regulators, forcing local
    governments to create funding by increasing sales and property
    taxes on citizens. Do you know how much money, say, your States
    spend to comply with Federal mandates and regulations?
        Governor Herbert. As I mentioned earlier--and I don't--we
    could probably reduce it to a number, but it's--our local
    governments tell us we'll give you a dollar--a Federal
    Government dollar to spend in exchange for 85 cents, so it's
    about a 15 percent margin as a minimum.
        Mr. Grothman. Okay. I will give you another question. I
    used to be a State legislator in Wisconsin, and one of the
    things that bothered me is sometimes Federal funds come with a
    maintenance-of-effort requirement in which you are really
    forced to spend money just to keep the Federal funds coming,
    money that you don't want to spend. Have you guys had any
    experience like that?
        Governor Herbert. We have. Remember years ago the cops
    grant where you're trying to get public safety and so you would
    get money from the Federal Government to hire policemen, but
    then you had to maintain those. You could not diminish your law
    enforcement, so it was built into your baseline. You took the
    grant and then you had to continue to spend money.
        Again, as far as the concern we talked about with Medicaid
    expansion, for our legislators, the concern is what is going to
    be the ongoing cost? And the match just stays the same, so you
    still get--have to come up with your portion of the match, and
    that's an ongoing--I mean, with the rising cost of health care
    has caused some of the legislators to say we can afford it
    today, but we're not--we don't think we can afford our match
    tomorrow.
        Mr. Grothman. How about TANF? Do you guys have any problem
    spending all your TANF dollars, or when things are going well,
    do you find that you have to look around to spend things on
    that you really wouldn't spend them on otherwise?
        Governor Herbert. You know, we've taken a little different
    approach in Utah. Again, we appreciate the programs that are
    out there to help people get out of poverty. We're probably the
    State leading the Nation in getting people out of poverty. The
    average length of time when people come to us, say, on Medicaid
    is only nine months because we emphasize we're going to help
    you in the short term. We're going to give you education,
    training, and skills so you can start helping yourself. It's
    the old adage of we're not just going to give you ----
        Mr. Grothman. Right.
        Governor Herbert.--a fish, we're going to teach you to
    fish. And that's something that I think is a good program that
    we're doing in Utah that I think other States, work efforts are
    ----
        Mr. Grothman. It is, but I am going to tell you the problem
    that I think we bumped into in Wisconsin, and that is when you
    are successful, you have to keep spending the same amount of
    money or more, right, which is a problem. You are kind of
    penalized for being successful because the Federal Government
    says if you want to keep this money coming, find something to
    spend it on. And in that way you kind of penalize the
    successful States.
        Governor Herbert. Well, that's an adverse incentive, and so
    that's probably not a good policy.
        Mr. Grothman. Okay. But you guys never have a problem
    spending all your TANF money. Okay.
        Governor Herbert. Yes, I don't know--for example, CHIP, we
    don't spend all the CHIP money. Again, we're working on trying
    to get people off government assistance, and most people don't
    want to have government assistance. They want to have a job;
    they want to be able to be self-sustaining. That's the American
    way. So we don't spend it just to spend it and find ways to
    spend it. We're trying to actually solve problems.
        Mr. Grothman. You can always find a way, though, to spend
    it that might be good. I mean, the question is--I should put it
    this way: Because of maintenance effort, are you spending
    dollars that you feel you would never spend on your own if you
    had to tax yourself for it? I guess I should put it that way.
        Governor Otter. I think there's many areas, Congressman,
    where we could cut down on the amount of Federal dollars that
    we need if we're allowed to implement those things that the
    Federal Government or those programs want us to achieve. And I
    think Governor Herbert has spoken to it very well, and that is
    we know that there's going to be a time when people are going
    to hit an economic or a financial speedbump in their life, and
    yes, it's important that they have a government which can
    respond to that but only on a temporary basis. And if we had
    the rules and regulations that we could enforce that say, okay,
    while you're laid up, while you're doing this, you're going to
    get an education. We're going to send you back to school. And
    we would spend some of that money then on getting you a
    retrofitted for the economy of the State of Idaho in a new
    profession if we were allowed to.
        Mr. Grothman. I think one final question here in the final
    30 seconds, obviously, everybody is thinking about what went on
    in Florida, and you get so much stuff on the internet and so
    many articles on there, you don't know what is true and what is
    not true, but it appears as though there have been Federal
    grants in which you are encouraged to report less crimes or
    less arrests or that sort of thing. So, in other words, maybe
    people do things different to pretend that they have better
    outcomes than they are having. In other words, they are in this
    case apparently arresting fewer people than they should arrest
    or I would say they should arrest to get more Federal money. Do
    you find that there are any programs like that in which you are
    incentivized to hit targets that you might not want to hit?
        Governor Herbert. You know, I can't think of anything. If
    in fact that's the case, again, we can see the incentive is in
    the wrong place. It ought to be for--the incentive ought to be
    have better outcomes, and we ought to be full and transparent
    in how we collect the data and not try to game the system.
        Governor Martinez. I think at times there's--there are
    Federal dollars, for example, in law enforcement and the
    maintenance of efforts that takes place. However, the
    paperwork, the amount of documentation that is required to be
    submitted, the limitations that come with those dollars when
    they may be better used different than having to come to the
    Federal Government for permission, to change the shift a little
    bit but still under the umbrella of law enforcement, that
    becomes a challenge for us.
        Governor Otter. If I understand your question, Congressman,
    probably the most egregious that I've seen is the introduction
    of a new species under the Endangered Species Act that then the
    State is required to maintain.
        Mr. Grothman. Okay. I would like to thank the chair for
    giving me an additional minute.
        Governor Otter. So would I.
        Mr. Palmer. At this time I will recognize myself for five
    minutes. And the first thing I want to do, Governor Martinez,
    is your testimony talked about the fact that there are more
    than 800 applications for permits to drill in New Mexico at a
    cost of approximately $1.9 million to New Mexico and $3.4
    million to the Federal Government per day. And I think you went
    on to say that it takes an average of 250 days. That is $850
    million just on the Federal side.
        And the reason I bring that up is that I have been here--
    what is today, the 27th? I have been here three years, one
    month, and 21 days, and one of the first things I pushed was
    opening up Federal lands for energy. We are an energy
    superpower. There is no question about it. The Federal
    Government has tremendous resources.
        And I bring this up in the context of infrastructure
    because I think a gas tax is the revenue source of diminishing
    returns. Governor Otter made this point about the fuel
    efficiency that we are achieving and we continue to want to do
    that. Everybody wants more fuel-efficient vehicles. So when you
    attach a gas tax, you know that that is a revenue source of
    diminishing return.
        What I think might be more helpful is if we take your
    testimony and this whole permitting thing, expedite this, get
    it down so that we not only can shorten the amount of time it
    takes to take advantage of a lease but increase the royalties--
    we haven't increased the royalties on Federal energy resources
    since the 1920s--and direct a portion of that into the Highway
    Trust Fund for infrastructure. We could set it up on a system
    where there could be matching money for the States and let the
    States manage it. Would you like to comment on that?
        Governor Martinez. Yes. Thank you very much for that
    question and comment. I think it's very important to understand
    that New Mexico is really a gem within the country not only for
    energy independence for the country but also the revenues that
    it generates. There's--for petroleum, there are so many
    products. It's not just for vehicles and ----
        Mr. Palmer. That is right.
        Governor Martinez.--gas is not just for vehicles. I mean,
    what goes--what products use the petroleum? And if we took that
    out of every product that we see and touch every day, we would
    be shocked to know how much of that is used in a variety of
    products.
        The--under the previous administration, it was better to
    say nothing to the private industry, not to give permission or
    to deny it. Under my previous administration as a Governor, the
    same thing. It was easier to say nothing, which costs people
    money to have something sitting there. We had some of these
    permits sitting there three years when I entered into office,
    so it was a quick move of going forward and backwards for every
    permit coming in the door and everything that was sitting
    there. To be able to have the revenues that allow us for
    education, allow for special projects, infrastructure projects
    that we have, and our permanent fund. We have a permanent fund,
    is one of the healthiest ones in the country because of oil and
    gas just in case when it was developed we ran out of oil and
    gas. But because technology is so great now, we're able to
    actually produce more and make it more available so that we're
    not reliant on countries that are in such turmoil.
        Mr. Palmer. Well, it has been reported that there is a
    formation out West in western Colorado, southwestern Wyoming,
    and northern Utah, the Green River Formation, that holds three
    trillion barrels of recoverable oil. That is three times what
    the entire world has used in the last 100 years. I don't want
    to stay focused on that. I want to talk about some of these
    other issues and a more collaborative effort between State and
    local government.
        I think that is a legitimate discussion, particularly since
    my brother is a county engineer--on how we can work on
    infrastructure together on the permitting. What we have seen
    over the last few years is just an enormous drag on
    infrastructure and really on the economy because of permitting.
    The infrastructure is so important to the economy.
        I would like to get some feedback from each of you on how
    you see we could improve that process, maybe let the State and
    local governments do more of the work in a collaborative way,
    as you talk about, Governor Herbert.
        Governor Herbert. Well, thank you. Again, I come from local
    government. I was a county commissioner for 14 years. I
    participated with NACo on many things. We railed against the
    Federal Government when I was there about the unfunded or
    underfunded mandates would come to local government, so the
    issue is still here. It's always probably going to be here, but
    at least we ought to be cognizant of it.
        In Utah, we in fact invite--they have an association for
    the cities called the League of Cities and Towns. They come. We
    have 245 of them that they represent, the cities of the State,
    29 counties, part of our Utah Association of Counties. They are
    probably the most active people on the Hill during the
    legislative session to make sure that what we do, they get
    input and they're invited.
        We equalize our educational funding in the State of Utah so
    that if you're in a rural part on the Navajo Nation that you
    get as much education funding as you do if you're in the middle
    of the urban heartland of the State of Utah. So we try to
    respect, you know, all the local government and their
    subdivisions and make sure that they're part of the decision-
    making process in the State of Utah.
        Again, a lot of it's just an attitude. We're saying we're
    not going to make decisions at the State level until we've got
    input from the local levels, and some of that we devolve down
    and let them say, you know what, that's a county issue. In your
    county, you take care of it. That's a city issue. You're a
    city, you take care of it and the State will stay out of it.
        Mr. Palmer. Okay. In that regard--and this is my last
    question--we have talked a good bit about shrinking the State
    and local consultation requirements of reforming the Unfunded
    Mandates Reform Act to help restore the States' partnership
    with the Federal Government. What I want to know is how
    important are these types of reforms, and are there other
    possible areas for reform that Congress could be, should be
    looking at to improve the relationship or communication between
    the Federal Government and the States? And each of you can
    answer that, and we will be done.
        Governor Otter. Mr. Chairman, let me begin by saying we
    learned a lot about ourselves during the recession between '08
    and '10. And what we did is what almost every Idaho family did
    is they sat around the breakfast table when the work ran out
    for Dad and said, you know, what things do we--what are--what
    is necessary and what is nice? To find out what is necessary,
    we look to the Constitution, and the Constitution was pretty
    specific about an education system for the State of Idaho and
    other areas. And then we said, well, what is nice? If we
    haven't got the money for nice, we're not going to do those
    things anymore.
        And so I think at every level of government, especially
    when you run into a time like the Great Recession--like the
    recession was, that's the process that you have to go through.
    And even further than that, after the recession we didn't go
    back to the old ways of doing things because we learned there
    were a lot of things that were simply not the proper role of
    government.
        Mr. Palmer. Thank you. Governor Martinez?
        Governor Martinez. I completely support that. You know,
    having inherited the largest structural deficit in the history
    of our State. I have not raised a tax once. And they can call
    it whatever they want, revenue enhancements, whatever it may
    be. We've not raised a single tax but we've actually become
    competitive with our surrounding States, which didn't exist for
    a very, very long time. It was believed doing the same thing
    over and over again we were going to get different results, and
    we didn't. We became competitive and we've actually recruited
    companies and businesses to New Mexico because we're doing it
    different.
        However, now, we're turning over an amazing budget. We have
    a surplus. We have great royalties. We have a permanent fund
    that's outstanding. But I hope that the next Governor doesn't
    see it as a way to start a spending frenzy and then growing
    government back to where it used to be, which was absolutely
    unnecessary, way too many employees to actually complete the
    mission of the State. And so that's what we've done is reduce
    our actual government size to fit what was necessary for us to
    deliver the services that are required.
        Mr. Palmer. Thank you. Governor Herbert?
        Governor Herbert. I'll just finish by saying this. You've
    heard me say this already. But all 435 Members of the House,
    all 100 Members of the Senate, the President should always ask
    the question, ``Is this an issue, something that should be
    better addressed at the State level?'' That should be the
    beginning of every discussion. And it'll be differences of
    opinion, but many times you're going to say, you know what,
    that probably is going to be better and more effectively
    addressed at the State level. Let them take on that
    responsibility. We will welcome that. And I think that's a
    bipartisan approach, by the way, that feeling. Thanks for
    hearing us today.
        Mr. Palmer. Well, I thank our witnesses again for appearing
    before us today. I think this has been an excellent hearing and
    very constructive.
        The hearing record will remain open for two weeks for any
    member to submit a written opening statement or questions for
    the record.
        If there is no further business, without objection, the
    committee stands adjourned.
        Governor Martinez. Thank you. Thank you for the
    opportunity.
        [Whereupon, at 11:48 a.m., the committee was adjourned.]

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