[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
LEGISLATIVE HEARING ON: H.R. 5468, THE ``PERMITTING LITIGATION
EFFICIENCY ACT OF 2018,'' AND H.R. 4423, THE ``NORTH TEXAS WATER SUPPLY
SECURITY ACT OF 2017''
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HEARING
before the
SUBCOMMITTEE ON
REGULATORY REFORM,
COMMERCIAL AND ANTITRUST LAW
of the
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
APRIL 12, 2018
__________
Serial No. 115-29
__________
Printed for the use of the Committee on the Judiciary
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://judiciary.house.gov
________
U.S. GOVERNMENT PUBLISHING OFFICE
30-953 WASHINGTON : 2018
COMMITTEE ON THE JUDICIARY
BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr., JERROLD NADLER, New York
Wisconsin ZOE LOFGREN, California
LAMAR SMITH, Texas SHEILA JACKSON LEE, Texas
STEVE CHABOT, Ohio STEVE COHEN, Tennessee
DARRELL E. ISSA, California HENRY C. ``HANK'' JOHNSON, Jr.,
STEVE KING, Iowa Georgia
LOUIE GOHMERT, Texas THEODORE E. DEUTCH, Florida
JIM JORDAN, Ohio LUIS V. GUTIERREZ, Illinois
TED POE, Texas KAREN BASS, California
TOM MARINO, Pennsylvania CEDRIC L. RICHMOND, Louisiana
TREY GOWDY, South Carolina HAKEEM S. JEFFRIES, New York
RAUL LABRADOR, Idaho DAVID CICILLINE, Rhode Island
BLAKE FARENTHOLD, Texas ERIC SWALWELL, California
DOUG COLLINS, Georgia TED LIEU, California
RON DeSANTIS, Florida JAMIE RASKIN, Maryland
KEN BUCK, Colorado PRAMILA JAYAPAL, Washington
JOHN RATCLIFFE, Texas BRAD SCHNEIDER, Illinois
MARTHA ROBY, Alabama VALDEZ VENITA ``VAL'' DEMINGS,
MATT GAETZ, Florida Florida
MIKE JOHNSON, Louisiana
ANDY BIGGS, Arizona
JOHN RUTHERFORD, Florida
KAREN HANDEL, Florida
Shelley Husband, Chief of Staff and General Counsel
Perry Apelbaum, Minority Staff Director and Chief Counsel
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Subcommittee on Regulatory Reform, Commercial and Antitrust Law
TOM MARINO, Pennsylvania, Chairman
BLAKE FARENTHOLD, Texas, Vice-Chairman
DARRELL E. ISSA, California DAVID CICILLINE, Rhode Island
DOUG COLLINS, Georgia HENRY C. ``HANK'' JOHNSON, Jr.,
KEN BUCK, Colorado Georgia
JOHN RATCLIFFE, Texas ERIC SWALWELL, California
MATT GAETZ, Florida BRAD SCHNEIDER, Illinois
KAREN HANDEL, Florida VALDEZ VENITA ``VAL'' DEMINGS,
Florida
C O N T E N T S
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APRIL 12, 2018
BILL TEXT
Page
H.R. 5468, the ``Permitting Litigation Efficiency Act of 2018''.. V
H.R. 4423, the ``North Texas Water Supply Security Act of 2017''. X
OPENING STATEMENTS
The Honorable Bob Goodlatte, Virginia, Chairman, Committee on the
Judiciary...................................................... 6
The Honorable Tom Marino, Pennsylvania, Chairman, Subcommittee on
Regulatory Reform, Commercial and Antitrust Law, Committee on
the Judiciary.................................................. 1
The Honorable David Cicilline, Rhode Island, Ranking Member,
Subcommittee on Regulatory Reform, Commercial and Antitrust
Law, Committee on the Judiciary................................ 3
WITNESSES
Prof. E. Donald Elliott, Yale Law School, Senior of Counsel at
Covington & Burling, LLP
Oral Statement............................................... 7
Mr. William L. Kovacs, Former Senior Vice President for
Environment, Technology & Regulatory Affairs, U.S. Chamber of
Commerce
Oral Statement............................................... 9
Prof. Emily Hammond, Glen Earl Weston Research Professor of Law,
George Washington University Law School
Oral Statement............................................... 10
Mr. Mike Rickman, Deputy Director of Operations and Maintenance,
North Texas Municipal Water District
Oral Statement............................................... 12
Additional Material Submitted for the Record
Memorandum and Letter submitted by the Honorable Tom Marino,
Pennsylvania, Chairman, Subcommittee on Regulatory Reform,
Commercial and Antitrust Law, Committee on the Judiciary. These
materials are available at the Committee and can be accessed on the
Committee Repository at:
https://docs.house.gov/meetings/JU/JU05/20180412/108120/HHRG-
115-JU05-20180412-SD002.pdf
Statement submitted by the Honorable John Ratcliffe, Texas, Vice
Chairman, Subcommittee on Regulatory Reform, Commercial and
Antitrust Law, Committee on the Judiciary. This material is
available at the Committee and can be accessed on the Committee
Repository at:
https://docs.house.gov/meetings/JU/JU05/20180412/108120/HHRG-
115-JU05-20180412-SD004.pdf
Letters submitted by the Honorable Val Demings, Florida, Subcommittee
on Regulatory Reform, Commercial and Antitrust Law, Committee on
the Judiciary. These materials are available at the Committee and
can be accessed on the Committee Repository at:
https://docs.house.gov/meetings/JU/JU05/20180412/108120/HHRG-
115-JU05-20180412-SD003.pdf
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
LEGISLATIVE HEARING ON: H.R. 5468, THE ``PERMITTING LITIGATION
EFFICIENCY ACT OF 2018,'' AND H.R. 4423, THE ``NORTH TEXAS WATER SUPPLY
SECURITY ACT OF 2017''
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THURSDAY, APRIL 12, 2018
House of Representatives
Subcommittee on Regulatory Reform,
Commercial and Antitrust Law
Committee on the Judiciary
Washington, DC
The Subcommittee met, pursuant to call, at 10:00 a.m., in
Room 2141, Rayburn House Office Building, Tom Marino, [Chairman
of the Subcommittee] presiding.
Present: Representatives Marino, Goodlatte, Issa, Collins,
Buck, Ratcliffe, Handel, Cicilline, Johnson of Georgia,
Schneider, and Demings.
Staff Present: David Flores, Chief Counsel; Slade Bond,
Minority Counsel; and Andrea Woodard (Lindsey), Clerk.
Mr. Marino. Good morning. The Subcommittee on Regulatory
Reform, Antitrust and Commercial Law will come to order.
Without objections, the chair is authorized to declare a recess
of the committee at any time. I do not expect there to be votes
before noon, so I think we should be fine.
We welcome everyone to today's hearing on ``the Permitting
Litigation Efficiency Act of 2018'' and ``the North Texas Water
Supply Security Act of 2017.'' And I now recognize myself for
an opening statement.
Following the recession, it took until June 2014, 78 months
after the prior jobs peak, or 6.5 years later, for even the New
York Times to claim that we, as a Nation, had recovered all of
the recession's job losses. Billions of Americans lost for
years the ability to earn a living and support a family with a
fulltime job. Americans were ready to work and employers were
eager to create jobs.
The problem was that government just would not get out of
the way. One of the biggest ways government was too much in the
way was in the tortuously slow Federal permitting of
construction projects. One did not have to be a supporter or an
opponent of the nearly trillion-dollar 2009 stimulus bill to
recognize that it would not deliver enough recovery fast enough
if the construction projects it sought to fund were not shovel
ready. As President Obama famously remarked, too many projects
were not shovel ready.
Much of that failure is due to the Federal Government's red
tape and obstruction, heavy permitting, and litigation system.
In 2011, a study of proposed projects in just one sector of the
economy, the energy sector, found that if a modest number of
these projects were allowed to go forward and break ground, the
direct and indirect economic benefits would be tremendous.
An identified 351 project, if approved, could generate $1.1
trillion and create 1.9 million jobs annually. But our
permitting system for years has frustrated that kind of help,
giving us instead overwhelming delays in administrative review
and obstructive litigation, challenging worthy permits.
By the end of 2015, Congress responded with desperately
needed permit streamlining reform and title 41 of the Fixing
America's Surface Transportation Act, commonly known as FAST-
41, but FAST-41 was only a start. It covered only certain
categories of construction projects, and generally just those
projects that required investments of $200 million or more.
Moreover, FAST-41 was subjected to a 7-year sunset. That means
that if, in just a few years, Congress does not extend them,
all of FAST-41 reforms will be lost.
Beyond question, there is more that needs to be done. My
bipartisan bill, H.R. 5468, the Permitting Litigation
Efficiency Act of 2018, is designed to meet that need, fairly,
squarely, and simply. Whether or not 41 is extended, my bill
sets a default rule for all permitting, that an agency that
delays more than 2 years in granting or denying a permit
application should be presumed to have unreasonably delayed in
taking action on the application, subjecting the agency to
liability in court, and enabling the court order it to get the
job done. That 2-year rule is consistent with actions taken by
the Trump administration to implement both FAST-41 and the
president's own executive orders on permitting.
My legislation also carries forward and extends to all
permitting FAST-41's reforms, that require anyone suing to
challenge an agency's ultimate decision, to sue promptly and
sue only on the basis of arguments the agency had a chance to
consider during its administrative process.
This will bring to a definitive end the days in which anti-
growth, anti-permitting advocates can lie in the weeds during
permit review, hiding arguments from the agency and then wait
up to the full 6 years allowed by current law once a permit is
finally granted before ambushing good-faith project developers
with job-killing litigation. The Permitting Litigation
Efficiency Act is short, simple, and balanced legislation to
help make sure recent advances in permitting reform do not go
up in smoke soon, but instead are advanced and entrenched.
I look forward to our witness's testimony concerning my
bill and the other bill we consider today, the North Texas
Water Supply Security Act of 2017. That bill introduced by
Representative Sam Johnson of Texas is consistent with my bill
and highlights the need for reform to prevent the kinds of
infrastructure crisis that North Texas and communities
throughout the country could face without further legislation.
The chair now recognizes my good friend, and ranking member
from Rhode Island, Congressman Cicilline, who is, once again, a
ranking member.
Mr. Cicilline. Thank you, Mr. Chairman. Since 1970, the
National Environmental Policy Act has saved time and American
taxpayers money while also ensuring that major Federal actions
that have a significant impact on the environment are safe and
do not harm local communities.
So whether the project is a new power plant or highway,
this democratic framework ensures that concerned citizens,
local businesses, and State and local governments have a voice
and opportunity to be heard on the impact of Federal
decisionmaking on their community. In enacting NEPA, Congress
recognized that hardworking Americans deserve to have a say in
how their taxpayer dollars are being used on major projects
where they live.
I am a strong advocate of making a comprehensive investment
in our infrastructure, once the envy of the world, to create
good paying jobs and expand economic opportunity by rebuilding
our crumbling infrastructure. But this requires a serious plan
and Federal resources, not a false tradeoff between an
investment and making projects less safe, illuminating public
input or harming local communities.
There is ample nonpartisan evidence that delays in
federally funded projects are due to inadequate funding, local
opposition, insufficient agency resources, and project
complexity, not environmental protections and safety
guardrails.
In 2002, the Nonpartisan Congressional Research Service
reported that transportation project approval delays are not
caused by NEPA. They are caused by, and I quote, ``Project
funding levels, local opposition to a project, project
complexity, or late changes in project scope,'' end quote,
among other factors unrelated to NEPA.
Dina Bair, who oversaw NEPA as the general counsel of the
Council on Environmental Quality for over two decades under
Republican and Democratic administrations similarly tested that
the principle cause of delay in implementing permitting are
inadequate agency resources, project complexity, changes in
budget, and other factors unrelated to permitting procedures or
judicial review in environmental permitting decisions.
Nevertheless, under the guise of streamlining the
permitting process, today's hearing concerns a pair of bills
that will close the courthouse doors to local citizens, public
interest organizations, businesses, and local government when
attempting to seek judicial review of projects of Federal
permitting decisions.
The first of these is H.R. 4423, the North Texas Water
Supply Security Act of 2017, which only applies to a single
project in North Texas that has already received Federal
permitting approval. This bill would block judicial relief for
any person who has not already commented on this permit and
would dramatically narrow the statute of limitations for filing
cases related to this permit from 6 years to 2 months.
In addition to my substantive concerns with this bill, I am
somewhat stunned that we are considering a bill that would
establish different rules for a single construction project
that has already received Federal approval and is not subject
to any lawsuits that we are aware of. This bill also raises
serious federalism concerns regarding the judicial rights of
State citizens concerning their access to water, a judicial
right that should concern the citizens of Texas, not the
Federal Government. If this bill is not a solution in search of
a problem, I am not sure what it is.
The second bill we will consider is a far more sweeping
proposal, the Permitting Litigation Efficiency Act which was
only introduced yesterday. This bill is designed to establish
more sweeping limitations on the judicial review of permitting
decisions required by law.
Simply put, it would create special rules for environmental
permitting projects on the administrative procedures act which
Congress designed to ensure transparency, fairness, public
participation, and access to justice in the regulatory system
while placing a heavy thumb on the scales of justice in favor
of regulated corporations. It does so by shortening the period
for judicial review of these projects from 6 years to 6 months
with limited exceptions.
Second, it establishes expensive barriers to prevent any
construction of a Federal permitting decision by requiring as
much as a $5 million bond before a person can seek an
injunction of a project that requires a Federal permit. This
bonding requirement will apply to any party seeking a stay,
including local governments, small businesses, and certain
citizens and nonprofit organizations regardless of the merits
of the case.
Even worse, the bill would require costs to give this bond
to defendants, regulated corporations, unless the court
determines that the action was substantially justified. A
standard that does not appear in current law is not defined by
the bill.
And lastly, the bill, in my view, unwisely disregards the
balancing test the courts have long applied to determine
whether to grant injunctive relief, and instead requires courts
to conduct a lengthy cost-benefit analysis of the economic
effects of providing relief, a lengthy and detailed analysis
that courts are ill-equipped to conduct.
Notwithstanding these concerns, I certainly thank our
witnesses for appearing before us today, and I look forward to
hearing your testimony on these matters. And with that, I yield
back.
Mr. Marino. Without objection, other members' opening
statements will be made a part of the record.
I will begin now by swearing in our witnesses before I
introduce them. Would you please rise? Raise your right hand.
Do you swear that the testimony you are about to give before
this Committee is the truth, the whole truth, and nothing but
the truth, so help you God? Let the record reflect that all the
witnesses have answered in the affirmative. Please be seated.
I am going to go through and introduce each one of you, and
then we will get back to the questioning. So we will get that
out of the way.
Donald Elliott is professor of law at Yale Law School, and
he is senior counsel at Covington and Burling, LLP and chair of
the firm's environmental practice group. Prior to joining
Covington, he was a partner in Willkie Farr and Gallagher, LLP,
chairing the firm's worldwide environment, health, and safety
department.
Mr. Elliott also served as assistant administrator in
general counsel at the U.S. Environmental Protection Agency.
Mr. Elliott also testifies frequently in Congress on
environmental issues and has served as a consultant on
improving the relationship of law and science to the Federal
Courts Study Committee, which was charted by Congress to make
recommendations for improving the Federal courts, and to the
Carnegie Commission for Law, Science, and Government.
Mr. Elliott is a senior fellow of the Administrative
Conference of the United States, and an elected member of the
American College of Environmental Lawyers, as well as a member
of the Boards of the Environmental Law Institute, the Center
for Clean Air Policy, and NYU's Institute for Policy Integrity.
He is the author or coauthor of seven books and has
published more than 70 articles in professional journals. He
earned his B.A. summa cum laude in Phi Beta Kappa, and his J.D.
from Yale. Following graduation, he was a law clerk for Judge
Gerhard Gesell of the U.S. District Court for the District of
Columbia and for Chief Judge David Bazelon of the U.S. Court of
Appeals for the District of Columbia Circuit. Welcome, sir.
Mr. William Kovacs is a recently retired senior policy
executive with over 40 years of experience in trade
associations, government, and private law practice. His most
recent position was senior vice president for Environment,
Technology, and Regulatory Affairs for the U.S. Chamber of
Commerce where he worked for 20 years and led the institution's
regulatory reform efforts including advocacy for permit
streamlining legislation.
His prior positions include government service as a chief
counsel for the House of Representatives, Subcommittee on
Transportation and Commerce, Committee on Interstate and
Foreign Commerce, Vice Chairman and Chairman of the Virginia
Hazardous Waste Facilities Board, and partnerships in several
Washington, D.C. law firms. He has written many policy and law
review articles and produced several nationally recognized
regulatory studies. He earned a J.D. from the Ohio State
University College of Law, and a bachelor of science degree
from the University of Scranton magna cum laude. We welcome to
you, sir.
Emily Hammond is the Glen Earl Western Research professor
of law at the George Washington Law School. Professor Hammond
previously taught at several universities including Wake
Forest, the University of Oklahoma College of Law, the
University of Texas, Florida State University, and the
University of Georgia. Professor Hammond practices law with
Bondurant--did I pronounce that right? Okay, good.--Mixson, and
Elmore in Atlanta, Georgia. Professor Hammond's articles have
appeared in numerous top-ranked journals, and she is the
coauthor of one of the nation's leading energy law texts.
She is an elected member of the American Law Institute, a
chair elect of the Association of American Law Schools,
Administrative Law Section, and a member scholar of the Center
for Progressive Reform. She has served as a hearing examiner
for State administrative proceedings and has provided service
to the International Atomic Energy Agency. Professor Hammond
earned her bachelor's degree from Virginia Tech and a J.D. from
the University of Georgia. Welcome, professor.
Mike Rickman is the deputy director of the North Texas
Municipal Water District and has been employed with the
district since October 2002. Mr. Rickman is directly
responsible for the following district departments, water,
wastewater and solid waste operations, environmental services,
maintenance services, and information technologies.
The district was created in the 1950s to provide wholesale
treated water to the areas north and east of Dallas. The
district has added wastewater treatment and solid waste
disposal services in its service area. The district's current
service area covers approximately 2,000 square miles and
continues to grow. Prior to joining the district, Mr. Rickman
was employed by the City of Dallas Water Utilities Department
for 33 years.
Before we go any further, I would like to recognize the
chairman of the full Judiciary Committee for his opening
statement, the gentleman from Virginia, Chairman Bob Goodlatte.
Chairman Goodlatte. Thank you, Mr. Chairman. I appreciate
your holding this hearing. America's voters sent the 115th
Congress to Washington to do one thing above all others, help
turn around this Nation's struggling economy. The Judiciary
Committee has been doing everything it can to fulfill that
mandate including on the regulatory reform front.
In fact, with regard to the specific issue before us today,
reform of America's outdated, slow-moving permitting system,
the Committee made a big down payment on reform during the
114th Congress, helping in the enactment of title 41 of the
Fixing America's Surface Transportation Act. FAST-41 contained
the biggest permit streamlining reforms in recent years. It has
already begun to clear the logjams that have stood in the way
of permitting decisions for many of the nation's largest
proposed construction projects.
The Trump administration has been working hard to implement
FAST-41 as effectively as it can. Just this week, the
administration's leading permitting agency signed a memorandum
of understanding, committing to even more steps to reach
quicker permitting decisions, including by agreeing to meet a
2-year target for the issuance of decisions for large
infrastructure projects. These reforms mean faster decisions
and faster delivery of jobs and investment for projects that
win a permitting green light. But there remains much work to be
done.
Good as it is, FAST-41 is scheduled by its own terms to
sunset by 2022, unless Congress extends it. Further, FAST-41
applied only to specific categories of the largest construction
projects, those involving $200 million or more in investment.
Many, many other projects still need permit streamlining
reform.
And in case FAST-41 is allowed to expire, it would be best
if Congress legislated permitted streamlining reform applicable
to all projects before FAST-41 sunset can arrive. The
Permitting Litigation Efficiency Act of 2018, of which I am
proud to be an original cosponsor, delivers precisely that
reform. It establishes a strong incentive for permitting
agencies to wrap up their permitting decisions for yea or for
nay within 2 years.
It also, like FAST-41, sets a prompt statute of limitations
for lawsuits challenging those decisions, requires those suits
to be based on matters actually presented to the permitting
agencies during the administrative process, and assures that
judges considering preliminary injunction requests in those
cases will take into better account the economic potential and
environmental harms of delaying project construction by
injunctions. These are balance bipartisan and sorely needed
reforms.
The second bill we consider today, the North Texas Water
Supply Security Act of 2017 is consistent with them and
precisely highlights the concrete need for these kinds of
reforms. That is because, under existing law, opponents of the
urgently needed North Texas Water Supply Project can lie in
wait for up to 6 years before suing, file suit on the basis of
matters never presented to the relevant permitting agencies and
seek preliminary injunctive relief.
All of that could conspire to plunge North Texans into a
water crisis that could be avoided if only litigation were
required to be brought in a more timely manner on the basis of
matters the agencies had a chance to consider during the
administrative process, as the North Texas Water Supply
Security Act requires.
I urge my colleagues to consider these important pieces of
legislation. I look forward to the testimony of our witnesses
and I yield back the balance of my time. Thank you, Mr.
Chairman.
Mr. Marino. Thank you. Each of the witness's written
statements will be entered into the record in its entirety, and
I ask that each witness summarize his or her testimony in 5
minutes or less.
To help you, I think you are familiar with the lights.
There will be a green light in front of you. When that green
light switches to yellow, that indicates that you have a minute
left. And when it switches to red, you have no time left. I
will politely and diplomatically just sort of grab the gavel
and give you a little hint that you should please try and wrap
up.
So please, Professor Elliott.
STATEMENTS OF PROFESSOR E. DONALD ELLIOTT, YALE LAW SCHOOL,
SENIOR OF COUNSEL, COVINGTON AND BURLING, LLP; MR. WILLIAM L.
KOVACS, FORMER SENIOR VICE PRESIDENT FOR ENVIRONMENT,
TECHNOLOGY AND REGULATORY AFFAIRS, U.S. CHAMBER OF COMMERCE;
PROFESSOR EMILY HAMMOND, GLEN EARL WESTON RESEARCH PROFESSOR OF
LAW, GEORGE WASHINGTON UNIVERSITY LAW SCHOOL; AND MR. MIKE
RICKMAN, DEPUTY DIRECTOR OF OPERATIONS AND MAINTENANCE, NORTH
TEXAS MUNICIPAL WATER DISTRICT
STATEMENT OF E. DONALD ELLIOTT
Mr. Elliott. Thank you very much, Mr. Chairman, Mr. Ranking
Member, and distinguished members of the committee. I am
appearing as private citizen not representing anyone, but I
consider myself a lifelong environmentalist. And like the
ranking member, I am a strong supporter of the National
Environmental Policy Act.
In my written testimony, I give some examples of how
valuable it has been. And I certainly agree with that. I
support the Permitting Litigation Efficiency Act precisely
because I think we need those kinds of reforms in order to save
NEPA, and not so much to save it from itself, but to save it
from judicial interpretations that have gradually fed back into
the agency process to make it unduly cumbersome.
I have submitted, for the record, a report by an unbiased
nonpartisan NGO Common Good called, ``2 Years, not 10 Years.''
And I think it comprehensively lays out the case for why we
need the kinds of reforms that are in the legislation. Among
other things, it shows that a number of other countries,
including Canada and Germany, which are probably greener than
we are, do a much better job of permitting and environmental
review than we do. And I think that is true for most countries
around the world.
NEPA is an American invention. It has been a very
successful invention. It has been copied in over 200 countries,
but as often happens, countries that do something the second or
third time are able to learn from the mistakes of their
predecessors, and I think we need to go back and make the
process more efficient.
Now, having said that, NEPA works very well in about 90
percent of cases. They go through pretty quickly with an
environmental assessment that concludes that there are no
significant environmental effects. The problem in my judgment
comes with regard to the larger, more controversial projects
which require an environmental impact statement. And
unfortunately, I think NEPA has become a way for opponents to
oppose projects and delay projects rather than really to
improve environmental review, which was not the original
purpose.
As I state in my written testimony, my experience is that
the review of environmental impact statements by the experts at
the EPA under section 309 of the Clean Air Act is what really
improves the quality of environmental impact statements, as
well as the guidelines set by the Council on Environmental
Quality.
The costs of undue delay, which are caused by judicial
review, fall into several categories. First of all, as the
Common Good report documents, delaying a project by 6 years
typically doubles its cost. And the Common Good report also
documents that delays of public projects, not big business or
private projects, but public projects alone have cost the
United States more than $3.7 trillion, with a ``T.'' And that
will be even greater if we go forward with the infrastructure
reforms, but the costs are measured not just in money, but also
in adverse environmental effects.
For example, the decaying electrical infrastructure results
in the equivalent of 200 coal-fired power plants. So if you are
in favor of improving the environment, you have to be in favor
of speeding up environmental review.
The third cost, which is more subtle, is that because
environmental review takes so long, particularly where there is
an environmental impact statement, and particularly where there
is opportunities for preliminary injunctions and judicial
review, Congress is often tempted, reasonably, to exempt
projects from NEPA.
There are over 50 examples of where particular projects or
even whole programs are exempted from NEPA, and therefore get
no mandatory environmental review. The culprit is not public
participation or environmental review. The culprit is the
judicial review process, which has been tacked onto NEPA. There
is no judicial review provision in NEPA.
My last point is NEPA is really an exception to review
under the Administrative Procedure Act. Under the
Administrative Procedure Act, and I cite a Supreme Court case
to this effect in my written testimony, it is generally not
permissible for a single district judge to issue a preliminary
injunction against a government agency. That is an exception
that was created under NEPA because we did not realize early on
that review was under the Administrative Procedure Act.
So I support the reforms in the Permitting Litigation
Efficiency Act, and I would be glad to answer any questions.
Thank you, Mr. Chairman.
Mr. Elliott's written statement is available at the
Committee or on the Committee Repository at: https://
docs.house.gov/meetings/JU/JU05/20180412/108120/HHRG-115-JU05-
Wstate-ElliotE-20180412.pdf.
Mr. Marino. Thank you. Mr. Kovacs.
STATEMENT OF MR. WILLIAM L. KOVACS
Mr. Kovacs. Thank you, Mr. Chairman, and Ranking Member
Cicilline, and Members of the Committee. A lot of what is in my
testimony I think you have already hit. But let me hit a few of
the really key points.
This Committee, in 2012, starting with Chairman Goodlatte
and then Mr. Marino, were the ones who really started the
permitting review process through the Rapid Act, and the
discussion at that time, after numerous hearings, was really
the debate between the environmental community and the business
community.
And the business community had a point, which is the
permitting process takes too long for a lot of what Professor
Elliott said, a lot of litigation, infinite reviews of every
aspect of a deficiency in an EIS. And the environmentalists
were very concerned that we were going to, in some way, gut
NEPA, which was never the concern of the business community.
The compromise that came out of this was a bill which did
two things, which were really, I think, very important, and
which were the basis for going forward. One is that they
recognize that the substance of NEPA should stay intact. But if
the problems with NEPA were truly structural in the sense that
you could not get a study out in 2 years, or 3 years, or 5
years, that what should happen is you leave the substance
intact, but you put a structure around it to make sure that the
agencies get it done. And that is what FAST-41 did.
When we got to the Senate side, a lot of the provisions
that were part of the House bill were picked up by both
Senators Portman and McCaskill. And two of the provisions that
were offensive to the environmental community, the automatic
permitting, was taken out and the statute of limitations was
moved, I think, from 150 days to 2 years. That was still down
from 6 years. And that was the essence of the compromise, and
that had the environmental community's support, and it had the
business community's support.
So, in that sense, you had a solid piece of legislation. In
addition to FAST-41, you have WRDA and MAP-21. So you have
highways covered, waterways and you have large infrastructure
projects. There are a lot of other projects in the United
States. In fact, OMB, when we were going through FAST-41, only
estimated that there were about 200 large projects in the U.S.,
but you have thousands of projects moving forward at any one
time, and that is one of the things that the Permitting
Litigation Efficiency Act addresses.
So, the two issues that are of concern right now; why you
need this new law is, one, FAST-41 does expire in 7 years; in
2022 it goes away. When it goes away, several things are going
to happen. One is the structure, which actually gets the
agencies to start up front and do the work that is needed is
gone. And the work that is done up front, everyone is brought
into the process.
The States are brought in. The local communities are
brought in. There is a timeline set. There is a continuous
monitoring of the projects. There is responsibility in the
sense of, if you are not going to meet the timeline, something
has to be reported to the President. There is a dispute
resolution process. You have the structure there.
But the second thing, in addition to it going away is it
only applies to projects that are $200 million or more. And so,
what the Permit Litigation and Efficiency Act does, through
very simple language, it defines what an unreasonable delay is
and by defining what an unreasonable delay is, it, in effect,
tells the agencies you have to act by the permit time or within
2 years after the application is completed; and, two, it then
picks up the statute of limitations and makes it uniform
throughout the code, which is something that would really be
extraordinarily helpful.
So, with that, I think what you are finding that Congress
has a choice. It can let FAST-41 expire, in which case we are
going to have no time limits on environmental reviews. You are
going to have a 6-year statute of limitations, which was never
imposed by Congress. It was imposed, really, by the courts when
they decided that there was judicial review.
So, with that, I think that the Permit Litigation and
Efficiency Act is a solid piece of legislation that frames
ideas, and keeps the process going. If FAST-41 goes away or if
the better alternative might be to make FAST-41 force permanent
and then put in the Permit Litigation Efficiency Act for the
remainder of the smaller projects. Anyway, thank you very much,
and I look forward to questions.
Mr. Kovacs' written statement is available at the Committee
or on the Committee Repository at: https://docs.house.gov/
meetings/JU/JU05/20180412/108120/HHRG-115-JU05-Wstate-KovacsW-
20180412.pdf.
Mr. Marino. Thank you. Professor Hammond.
STATEMENT OF EMILY HAMMOND
Ms. Hammond. Thank you, Chairman Marino, Ranking Member
Cicilline, and distinguished Members of the Subcommittee for
the opportunity to appear before you again today.
Amending a general statute like the Administrative
Procedure Act to address a particular perceived problem is
guaranteed to cause confusion in the courts, produce unintended
consequences, and undermine the rule of law. I will provide
examples in my testimony today.
Turning first to PLEA, the bill suffers from an initial
flaw in that its scope is entirely unclear. The bill applies to
Federally required permits but does not define those terms. The
closest definition is in section 5518 of the APA which provides
that a license is a whole or a part of an agency permit,
certificate, approval, registration, charter, membership,
statutory exemption, or other form of permission. The APA does
not define permit.
So, PLEA creates confusion. Does it include all licenses,
some subset of licenses? We do not know. Section II's
presumption of unreasonable delay creates perverse incentives
and is unnecessary.
The first two subsections, which leave agencies to set
schedules or resort to the default 2-year action deadline,
creates a perverse incentive for agencies either to forego
creating schedules altogether, the detriment of transparency
and public engagement, or to schedule final action dates so far
into the future as to be meaningless.
These provisions are all the more problematic when compared
to the cross-references in subsections A, B, and C. Those
provisions are subject matter specific statutes that are
already aimed at streamlining environmental permitting. They
foster transparency. They acknowledge that agencies may lack
the resources to complete permit reviews if they are
insufficiently funded. They highlight the importance of public
participation in the permitting process, and they promote
agency coordination as a means of limiting red tape.
These cross-reference provisions are superior to the bill,
and only highlight the difficulties of using a general statute
like the APA to address highly fact specific permitting issues.
Section 2(c) of PLEA establishes a one-way ratchet in favor
of regulated entities with its special statute of limitations,
but even more concerning is the component of 2(c) that limits
judicial review, only to matters that were included in the
record of proceeding. That is already the law. It has been
since 1943 in SEC v. Chenery Corporation, and it is also
present in most agency statutory mandates. There are a few rare
and necessary exceptions to the Chenery Rule that permits
supplementing the record only very narrow, but important
circumstances. These include cases in which an agency has
failed to place all of the information upon which it has relied
into the record.
This also includes cases where relief, like a preliminary
injunction, is at issue. In fact, the limitation in 2(c) would
have the impact of forbidding courts from considering the vast
scope of matters required by section 3.
Section 3 is further flawed because its new standards for
equitable relief invite a protracted, unmanageable,
unpredictable judicial exploration of matters of the general
economy. The current standard for equitable relief is
sufficiently flexible to permit courts to tailor their
considerations to the matters at hand.
The bond requirement chills public engagement, and has
grave Federalism implications. Read in conjunction with
subsection E, the $5 million bond requirement amounts to a
massive fee shifting provision that expects petitioners to
gamble on unpredictable judicial outcomes. This chills more
than public interest groups' access to justice. States and
local governments frequently have a stake in Federal permitting
decisions, especially those that implicate land or water use.
These governments can no more afford the bond risk than can
public interest groups if their participation in judicial
review protects important Federalism ideals.
Business competitors are also frequent petitioners before
the courts. The bond requirement chills healthy competitive
forces as well by weighting the scale in favor of a single
permit applicant.
The second bill is deficient for many of the same reasons
as PLEA but, in addition, by retroactively changing the rules
of engagement for a project that has already reached a full
decision, the bill makes a mockery of the public participation
that took place already and undermines the democratic
legitimacy of the administrative process.
I urge you to reject both of these bills, and I look
forward to your questions. Thank you.
Ms. Hammond's written statement is available at the
Committee or on the Committee Repository at: https://
docs.house.gov/meetings/JU/JU05/20180412/108120/HHRG-115-JU05-
Wstate-HammondE-20180412.pdf.
Mr. Marino. Thank you. Mr. Rickman.
STATEMENT OF MR. MIKE RICKMAN
Mr. Rickman. Chairman Marino, Ranking Member Cicilline, my
name is Mike Rickman. I am the deputy director of the North
Texas Municipal Water District, and we are located in Wylie,
Texas, which is a suburb in the Dallas area.
I appreciate the opportunity to testify today in support of
H.R. 4423, the North Texas Water Supply Security Act of 2017.
This legislation provides much needed, much needed limitations
on judicial review and decisions and authorizations associated
with the Lower Bois d'Arc Creek Reservoir. The district
currently supplies drinking water to over 1.7 million people in
the North Texas area, and is a service area that covers 2,200
square miles. And to put that in perspective, that is a little
bit larger than the State of Delaware.
The area has some of the fastest-growing cities in the
United States, and over the next 50 years we have water demands
that are projected to be 1.5 times what they are today. We have
a myriad of water supply reservoirs to meet the demands of this
rapidly growing population. However, even with these resources
and conservation programs that have been enacted to maximize
the existing supplies, the district needs to develop new
supplies.
This reservoir project is critical, a critical component of
the region's long-term supply plan. The reservoir is projected
to cover approximately 16,000 acres and will provide
108,000,000 gallons of water per day. The project is the only
viable supply that can address the district's immediate water
supply needs. It is essential that this water supply come
online in 2022 to prevent having a water crisis in the area.
To that end, the Corps of Engineers issued a 404 permit
that allowed construction to begin on the reservoir. The permit
was issued on February 2nd of this year. The 404 permit comes
after approximately 15 years of the district's collaboration
with Federal, State, and local officials to study the proposed
reservoir, obtain the necessary State water rights permit, and
perform the environmental reviews required under the 404
permitting process.
To date, the district has invested more than $164 million
toward planning, permitting, engineering, and acquiring the
land for the project. Construction of the project commenced
earlier this month and is expected to be completed in 2022.
Lower Bois d'Arc Creek Reservoir is the first reservoir to
be permitted and built in Texas in over 30 years. I want to
thank Congressman Sam Johnson for introducing H.R. 4423, and
for Congressman John Carter, Jeb Hensarling, John Radcliffe,
and Pete Sessions for their co-sponsorship. H.R. 4423 provides
a critical protection for the Lower Bois d'Arc Creek Project.
H.R. 4423 limits the judicial review of the 404 permit so this
multi-million, multi-year, $1.6 billion project is not
constrained by legal challenges.
H.R. 4423 accomplished the goal in four ways. First, it
limits who may challenge the environmental reviews. There have
been numerous public meetings. There has been a draft EIS and a
revised draft EIS, which both had public comment periods. So,
limiting the standing is something that we think is reasonable.
The second thing it does, it limits when the suit can be
filed. Currently under the NEPA process, it can be filed 6
years. So, that means that we could have the project completed,
in service, and operational, and get a legal challenge that
would not allow us to use that project. And with public funds
being spent, we would continue to make payments on that project
without having the ability to use it.
Third, 4423 limits where the legal challenges can take
place. We think it should be in the Eastern District of Texas
where the reservoir is located.
And fourth, it ensures that any Federal action for a
temporary restraining order or injunction against construction
or operation of the project that the court consider how
critical this project is to the residents of North Texas.
As you can see, 4423 does not completely circumvent the
judicial process. If enacted, it prevents further unnecessary
delays in critical water supply projects in the Federal courts.
Therefore, it is imperative that the critical supply project be
reasonably protected from frivolous legal challenges that have
the potential to seriously harm the water supply.
Thank you for the opportunity to comment. I would be happy
to answer any questions.
Mr. Rickman's written statement is available at the
Committee or on the Committee Repository at: https://
docs.house.gov/meetings/JU/JU05/20180412/108120/HHRG-115-JU05-
Wstate-RickmanM-20180412.pdf.
Mr. Marino. Thank you. The Chair now recognizes the
chairman of the full Committee, Chairman Goodlatte, for his
questioning.
Chairman Goodlatte. Thank you, Mr. Chairman. Mr. Kovacs,
FAST-41 was bipartisan legislation that you referred to
containing good reforms. But it, unfortunately, has a 7-year
sunset. Is not the legislation before us today, the Permitting
Litigation Efficiency Act, generally consistent with the policy
goals of FAST-41?
Mr. Kovacs. Yes.
Chairman Goodlatte. And if FAST-41 is allowed to sunset,
but this legislation is enacted before it does, will the latter
at least assure that a permanent base line of genuine permit
streamlining reform, remain in place?
Mr. Kovacs. Yes, it would be the default provision.
Chairman Goodlatte. And if FAST-41 is made permanent, which
is my hope, is there any reason to believe that the Permitting
Litigation Efficiency Act could not remain in place as a good
adjunct to it, providing permit streamlining for projects not
covered by FAST-41?
Mr. Kovacs. You are correct. They would actually work
together. FAST-41 would take the projects over 200 million and
the Permit Litigation Efficiency Act would take smaller ones.
Chairman Goodlatte. Mr. Elliott, the Permitting Litigation
Efficiency Act does not eliminate judicial review of NEPA
claims. It just insists that they be brought in a more timely
way, based on issues presented to the agency. I would like you
to respond to some of the criticisms of Professor Hammond, and
tell me: is it not more consistent with the original intent of
NEPA because it allows permitting decisions to be made
efficiently, and better assures that agencies actually are able
to consider all of the relevant information during their
initial reviews?
Mr. Elliott. Yes, Mr. Chairman. I think it is. I do not
believe that it would adversely affect the ability of citizens'
groups to come in and raise issues during the administrative
process in any way.
With regard to the bonding requirements, when judges
somewhat capriciously stay projects, issue preliminary
injunctions, there are real economic costs. I give the example
of the Atlantic Sunrise Pipeline, which was only stayed by a
court for 3 days. But in that 3 days it put 2,500 people out of
work for 3 days, and imposed $24 million of costs on the
company that was promoting the project, and that is a real
economic loss.
I believe, in that case, it was an administrative stay that
was issued by the clerk's office in the D.C. Circuit without
even being looked at by a judge, based on my experience, having
been a clerk on that court. So, I think it is important to make
challengers think twice about the real economic harm they have.
They can still challenge a NEPA statement. They just do not
need to get a preliminary injunction that halts the
construction of a pipeline and puts 2,500 people out of work.
And this really builds on existing law. Bonding requirements
already exist. This simply beefs it up and tries to make it
more frequent.
I would go farther. I think that preliminary injunctions
and permanent injunctions under NEPA are inappropriate. We do
not do that under the Administrative Procedure Act in any other
area and, again, as I said in my opening summary, that was
really based on a longstanding judicial mistake.
Initially, we were not clear whether or not a judicial
review under NEPA was under NEPA and, therefore, preliminary
injunctions applied or under the Administrative Procedure Act.
It is now clear it is under the Administrative Procedure Act,
and we do not allow judges under the Administrative Procedure
Act to issue preliminary injunctions in ordinary,
Administrative Procedure Act cases.
Chairman Goodlatte. Thank you. Thank you, Mr. Chairman.
Mr. Marino. The chair recognizes the ranking member,
Congressman Cicilline.
Mr. Cicilline. Thank you, Mr. Chairman. Thank you again to
our witnesses. Professor Elliott, I just wanted to start with
you. You have previously written about something you described
as ``regulatory ossification,'' a concept that you use to
describe agencies that have been burdened by too many
requirements such as inflexible procedural and analytical
requirements in the rulemaking process, presumably to some
unnecessary delay.
And so, I wonder whether you still have that concern today,
that agencies lack the resources, staff, and funding to achieve
their statutory missions, and whether or not this inadequate
funding and insufficient resources have an impact on the delays
that you describe in environmental permitting?
Mr. Elliott. I think all of that is true, but in my view,
the primary problem is that these reviews have become too
complicated as a result of what I call ``defensive medicine,''
or my friend, Philip Howard, calls ``leaving no pebble
unturned.'' And what we need to do is to set deadlines that
will require agencies to prioritize.
There is never going to be enough funding to get into all
of the very small details, and the incentives that are created
by NEPA, and litigation under NEPA, are to find some issue, no
matter how small, that has not been adequately considered, and
then use that as a ground to stop a project.
I ask my students sometimes: there is a case where----
Mr. Cicilline. I do not mean to cut you off.
Mr. Elliott. Okay, I will stop.
Mr. Cicilline. I just have a limited amount of time. I
want, Professor Hammond, I would ask if you would respond to
that. Do agencies have the resources they need and the
personnel to do the reviews that are required under NEPA?
Ms. Hammond. No, they do not. They are underfunded and one
of the problems with PLEA is that it does not account for that
possibility, whereas, for example, FAST-41 does. So, again, we
see this problem with using a general statute as a very awkward
way to get at a specific problem.
Mr. Cicilline. And would you, Professor Hammond, speak a
little bit about how these bills, particularly the broad
sweeping pieces of legislation, undermine public participation
for Federal projects that affect local communities? I served as
a mayor of Providence before I came to Congress, and the idea
of silencing the voices of local officials in these important
projects that have a tremendous impact on the local community
is very alarming to me.
Ms. Hammond. This is where I think that the $5 million bond
requirement is, indeed, a terribly scary thing for any local
government that might be wanting to participate in the process
and see it through. And so, just seeing that number on the
paper will chill a number of meritorious claims, and I think
that is a significant problem with this bill.
Mr. Cicilline. And, you know, one of the things that, and I
mean, I guess part of this is whether or not you believe that
public participation and community engagement on these major
projects that require Federal permitting is a positive, net
positive or net negative?
The thing that concerns me in particular about the
legislation is I think people already have a sense that, very
often, their voices are not heard, that very often their voices
are not heard, that the voices of ordinary citizens are not
heard, and the powerful voices of corporate, special interests
are taking precedence.
And I would like your assessment as to whether or not you
think that makes it more likely or less likely, as a result of
this proposal?
Ms. Hammond. I think it is more likely to be a problem.
There are all kinds of social science research, legal research
showing that when people have a voice that is heard, not only
do we reach better decisions, but we have greater acceptance of
the decisions that are made. That promotes community, as well
as promoting necessary projects.
Mr. Cicilline. And Professor Hammond, do you agree that
there is a substantial amount of evidence out there that the
delays for projects require Federal permits are a result of
inadequate funding of agencies, a number of other factors
unrelated to the permit, the permitting process?
Ms. Hammond. That is correct. There are a number of causes,
and underfunding and understaffing are major ones.
Mr. Cicilline. My final question is the Permitting
Litigation Efficiency Act also provides for the automatic award
of a litigation bond to the defendant unless a plaintiff's
claim was substantially justified. Are you aware of any similar
requirements in current law, and do you believe that this is
essentially a fee shifting requirement, which I think you
already referenced? But are you aware of any other place that
this happens in existing law?
Ms. Hammond. I am not aware of any and, again, we heard
this concern raised about the capriciousness of judges. There
is no standard to define what should happen there, and it does
look very much like a presumption in favor of fee shifting.
Mr. Cicilline. Thank you. I yield back, Mr. Chairman.
Mr. Marino. The chair now recognizes Congressman Handel
from Georgia.
Ms. Handel. Thank you, Mr. Chairman, and thank you to each
of our witnesses for being here.
I would like to start with Mr. Kovacs please. I come out of
local government, a former county commissioner, chairman of
that County Commission in Fulton County Georgia, and one of the
things that I have seen with the NEPA process is extreme delays
of very critical public projects, in addition to extreme delays
on private projects. But, in particular, public, to the point
where in my congressional district some jurisdictions have
literally said, ``No, we do not even want to participate with
the Federal Government around projects,'' and would rather go
it alone.
So, there was an original intent behind NEPA that the
review process would be efficient, and that NEPA, itself, would
not contain an authorization of judicial review. Is it fair to
say that the Permitting Litigation Efficiency Act, which we are
discussing today, rather than somehow undermining NEPA actually
restores the NEPA process, and any time consumed by NEPA
litigation more closely aligns with the original congressional
intent?
Mr. Kovacs. I think you are right because it does two
things. The original congressional intent was just to consider
the environmental issues. Through the course of years, which I
think is where the problem has started, the courts decided to
legislate, rather than Congress. And when the courts decided to
graft on a private right of action they decided that, instead
of looking at all of the large details to find out what the
environmental issue was, they decided that everything was a
deficiency in the process. And that is what extended it out.
Now, when you get into the Permitting Litigation Efficiency
Act that you are considering today, all it says is that you are
going to do this in a shorter period of time. You are going to
do it by the time of the assigned permit date for considering
it, or if there is no unassigned date, you are going to do it
within 2 years. And at that point in time, that is when
litigation starts. So, the time limit is really something that
Federal agencies right now have an obligation to meet. If they
are not meeting it, there is no consequence. So, yes, I agree
with you.
Ms. Handel. One thing that I want to point out is that when
local jurisdictions are teeing up various projects, before the
funding component of it is even pursued, and the permitting
process is even pursued, there is already a long, public
comment period through the various regional commissions that
exist, in my case, in Georgia, the Atlanta Regional Commission.
So, is there anything in this new legislation that, from
your perspective, in any way limits what would be done pre, to
deciding what a project might be, from a public comment
standpoint, and then, secondly, limiting public comment, in
regard to the timeline?
Mr. Kovacs. Absolutely nothing.
Ms. Handel. Okay, thank you very much. And with that, I
will yield back, Mr. Chairman.
Mr. Marino. The chair recognizes the gentleman from
Georgia, Congressman Johnson.
Mr. Johnson of Georgia. Thank you, Mr. Chairman. Gosh, this
is a pretty chaotic time that we are in. The Mueller
investigation continues to get warmer and warmer. The U.S.
Attorney for the Southern District of Georgia has procured and
executed a search warrant for the hotel room, home, and offices
of President Trump's lawyer. The President sits, beleaguered,
thinking about pulling the trigger on an effort in Syria, a
military effort, that could wind up involving the Russians. We
have got a brand-new National Security Advisor, the third
advisor, in this brand-new administration; just took the job on
Monday, the same day that the Director or the Homeland Security
Advisor resigned. It just looks like total chaos around here.
Now, Mr. Rickman, we have a process that has been in place
to ensure that the Federal Government follows its own
environmental laws, but this bill would create an exception for
just one project. Do you believe that Congress should be
spending its precious time favoring one parochial project over
another?
Mr. Rickman. I think Congress should be addressing the
issue of what it takes to permit a project of this size and
scope, and that once you go through that almost 15 years of
permitting, you need something to shorten that process.
Mr. Johnson of Georgia. I understand that this is an issue
of grave importance to you, but there are so many other issues
that appear to be of importance that this committee should be
looking at, and it is my opinion that we have a lot of things
that take precedence and priority over this local issue.
But let me move to Professor Elliott, and thank you for
your response, Mr. Rickman.
Mr. Elliott, you are a published author; 7 books, 70
articles, including one that is entitled, ``Why Punitive
Damages Do Not Deter Corporate Conduct Effectively.'' Do you
still support the premise of that article that you wrote?
Mr. Elliott. Yes.
Mr. Johnson of Georgia. And you have spent your entire
career defending big corporations, have you not?
Mr. Elliott. Not entirely, no.
Mr. Johnson of Georgia. Well, you have done some teaching
in addition to that. I will give you that.
Mr. Elliott. I was general counsel of EPA.
Mr. Johnson of Georgia. And a very corporate friendly EPA.
Mr. Elliott. I do not know about that. We passed the 1990
Clean Air Act amendments when I was there. I think that the
first Bush administration, Bush 41, was really to the left of
the Clinton administration.
Mr. Johnson of Georgia. I tell you. It was certainly to the
left of Scott Pruitt and----
Mr. Elliott. I am not going to comment on that.
Mr. Johnson of Georgia. My hat is off to you. Do you
believe that a $5 million bond to bring a case will create a
perversion of the legal system, and make courtrooms available
only to the wealthy?
Mr. Elliott. Yes, but, of course, that is not what this
bill does.
Mr. Johnson of Georgia. Well, that is the effect of this
bill.
Mr. Elliott. No, no, that is not right.
Mr. Johnson of Georgia. How can it not be right?
Mr. Elliott. Well----
Mr. Johnson of Georgia. If the legislation that you are
here to testify about today gives judges the authority to order
a litigant to post up to a $5 million bond before the
litigation can proceed, recognizing that we are packing the
courts with right wing, corporate friendly, antiregulatory
judges?
Mr. Elliott. Well, thank you for that question, which I
think really goes to the heart of the matter. The bond only
applies, as I understand it, if the challenger seeks to enjoin
the project, and it would be perfectly----
Mr. Johnson of Georgia. That is exactly what----
Mr. Elliott. May I finish my answer?
Mr. Johnson of Georgia. That is the kind of litigation that
we need to protect harms to the public. Now professor----
Mr. Elliott. But if all of these States----
Mr. Johnson of Georgia. And my time is limited, Professor
Elliott. Let me go to Professor Hammond.
Mr. Elliott. So is mine.
Mr. Johnson of Georgia. I understand, but I appreciate you
being here, too. Professor Hammond, how will this legislation
chill the ability of litigants to bring actions to protect the
health, safety, and well-being of Americans?
Ms. Hammond. If I may respond. The $5 million bond does
give this discretion to judges. It is scary. It will chill
litigation. We can expect only those who can afford it to come
to court, further marginalizing all of the voices that do have
an interest in what happens with these projects.
Mr. Johnson of Georgia. I thank you, and I am at the end of
my time. I yield back.
Mr. Marino. The chair now recognizes Congressman Ratcliffe
from Texas.
Mr. Ratcliffe. Thank you, Mr. Chairman. I would like to
thank all the witnesses for being here today and I am grateful
for the opportunity to speak in support of the North Texas
Water Supply Security Act as one of its original cosponsors.
I want to thank all my North Texas colleagues for all of
their hard work and time and effort on this bill over a
considerable period of time, specifically its sponsor,
Congressman Sam Johnson. Mr. Chairman, at this point I would
ask a unanimous consent to submit a statement in support of
this bill from Congressman Johnson.
Mr. Marino. No objection.
[Note.--This material is available at the Committee or on
the Committee Repository at: https://docs.house.gov/meetings/
JU/JU05/20180412/108120/HHRG-115-JU05-20180412-SD004.pdf.]
Mr. Ratcliffe. I want to start out with comments from my
friend, Mr. Johnson from Georgia. Mr. Rickman, he talked about
the specific project, the Lower Bois d'Arc Creek Project and
questioned whether or not Congress should be spending its time
on a local issue that is just important to you. North Texas
Municipal Water District services how many North Texans?
Mr. Rickman. One-point-seven million.
Mr. Ratcliffe. And without this legislation that we are
considering today, and the resources that it will allow North
Texas Municipal Water District to supply to those 1.7 million,
at what point does North Texas Municipal Water District become
unable to service 1.7 million Texans?
Mr. Rickman. Currently, the projections are showing in 2021
or 2022 that we would not be able to support the population
that is projected to be there.
Mr. Ratcliffe. I would submit that 3 years is not a long
period of time, and it is not a trivial matter, and every
member of Congress that has time to devote to this issue should
do so. So, I thank you for being here to speak to this specific
issue. With the Lower Bois d'Arc Creek, we saw an environmental
review process take longer than usual, and that was due
essentially to delays and the environmental impact statement
having to go through a number of revisions, correct?
Mr. Rickman. That is correct.
Mr. Ratcliffe. What is your opinion on the harm that is
caused by delays in the environmental review process on
important projects like Lower Bois d'Arc?
Mr. Rickman. The issue that you have to address is the
timeliness and the cost. The timeliness meaning that the
process of going through the environmental impact statement,
getting that prepared, submitting it for public comment, and in
this case, we had to have a draft EIS and a revised draft EIS,
which took over 2 years. The result of a Federal agency not
liking the type of testing that was taking place in the field,
although they had agreed to it up front. The second part of it
is the cost associated with that. The delay was a little more
than $25 million in cost.
Mr. Ratcliffe. And again, I know you have testified to
this, but the permitting process here for the Lower Bois d'Arc
Project has taken 15 years, correct?
Mr. Rickman. The actual permit for the 404 permit was filed
in June of 2008, but we had spent several years prior to that
working with the Federal agencies getting the application
prepared correctly.
Mr. Ratcliffe. And do you think 15 years is an appropriate
period of time for people to have the opportunity to raise
issues with the permitting agencies for a project like this?
Mr. Rickman. Absolutely. There were numerous public
meetings at the State, Federal, and local level.
Mr. Ratcliffe. And yet currently, despite the 15 years to
raise those concerns under the current law, they would have an
additional 6 years to interrupt the project with an injunction
or a temporary restraining order, correct?
Mr. Rickman. That is correct.
Mr. Ratcliffe. So, North Texas Municipal Water District
could move forward with this project, get it 95 percent
complete, and someone could theoretically, under the current
state of the law, despite having 15 years prior, stop this
project and North Texas Municipal Water District's ability to
service those 1.7 million Texans relying on that water supply,
correct?
Mr. Rickman. That is accurate, and there is no viable
option out there to get something to replace this in the short
term.
Mr. Ratcliffe. Mr. Rickman, thank you again for speaking on
this issue and again, I would like to encourage all my
colleagues to support this legislation. With that I yield back.
Mr. Marino. The chair now recognizes the gentlewoman from
Florida, Congresswoman Demings.
Ms. Demings. Thank you so much, Mr. Chairman, and thank you
to all of our witnesses for being here. Ms. Hammond, I would
like to start with you. We have heard a lot of talk about
judicial review actually undermining the original intent of
NEPA, but what effect will limiting judicial review have on
local economic interests like those of small businesses, in
your opinion?
Ms. Hammond. Well, those are the very small businesses that
may have an interest in seeking judicial review and so, if it
is limited, once again, they cannot make their voices heard.
This is both in inherent limitations in the way the statute is
set up, and again, in the bond requirement.
Ms. Demings. You know, I also come from local government
and I do believe that public participation is not only
important, but it is necessary, and we have talked a bit about
it, but let's talk about it a little bit more. Are you
concerned that the proposed bill will undermine public
participation for Federal projects that affect local
communities?
Ms. Hammond. Yes. It does do that. I should note that it is
already the law that any issues that are raised in litigation
must have been raised before an agency. What this bill does is
appear to restrict that even further to cut off the ability to
raise further arguments to judges that the agency did not do
their job properly, despite comments raised. That final check
of judicial review is a key part of not just making sure that
agencies exercise their power properly but giving voice to
those who would participate.
Ms. Demings. Thank you so much, professor. Mr. Kovacs, you
have argued that the major causes of delays in Federal
permitting is the mandate to conduct environmental reviews
under NEPA. Of the many, many Federal actions undertaken every
year, about how many require an environmental assessment in the
first stage of the NEPA approval process, would you say?
Mr. Kovacs. Actually, I have never said that the mandate to
do the environmental impact statement caused any harm at all.
It should be done. What I have said is that what the dispute is
over, if the mandate is to stay, then the problem is timing,
and you can put a structure around timing. So when you get into
the public participation requirements bringing the State and
local governments in, but you do it in a coordinated way up
front so that you can meet the time deadlines. That is what
FAST-41 does.
Ms. Demings. Okay, and roughly how many would you say?
Mr. Kovacs. In the course of a year, I am going to say 50,
60, 70.
Ms. Demings. It is not a great number.
Mr. Kovacs. Out of the thousands, most of them go either
through a categorical exclusion or through an environmental
assessment.
Ms. Demings. So, would you say only the largest projects
would require that type of thing?
Mr. Kovacs. Well, that is why FAST-41 was limited to the
projects over $200 million because that seems to be where the
bottleneck would come about.
Ms. Deming. How many of the transportation projects, again,
very concerned about local issues, how many of the
transportation projects would you say are subject to a full
NEPA review?
Mr. Kovacs. The best statistics I have is that when
Congress enacted MAP-21, the time for a transportation project
based on the MAP-21, which is different than FAST-41, was cut
in half, and that is a DOT study. And then if you look at the
Recovery Act, which was the Barrasso-Boxer amendment where they
said all projects are to go in the most expeditious route
possible, out of the 192,000 projects, only 841 went through a
full environmental review. So, it gives you an idea. It is a
very small percentage.
Ms. Demings. About 3 percent, would you say? It is pretty
small?
Mr. Kovacs. You are probably better at math than I am.
Ms. Demings. Small percentage.
Mr. Kovacs. It is small. It is not a lot.
Ms. Demings. Okay. I just have one more question in my less
than 50 seconds. You know, these are very important issues, and
I know that I want to get it right. It is important to our
local communities.
Professor Elliott, my colleague, who ran out of time, and
it just concerns me. When he said that his time was limited, he
was referring to the 5 minutes that the chairman gives him that
he has to control; 5 minutes is not much time to ask for
witnesses. These are critical questions so we can get it back.
So, he was referring to that.
I know you have done some outstanding work, but I am
interested, just for my own personal edification. When you said
your time was limited what exactly were you referring to?
Mr. Elliott. The same thing that he was.
Ms. Demings. You were concerned about the 5 minutes that he
had to control?
Mr. Elliott. Right. I was not allowed to answer his
question because his time was expiring.
Ms. Demings. But you do understand that he controls the
time, right?
Mr. Elliott. Yes.
Ms. Demings. Okay. All right.
Mr. Elliott. Yes, I do, and that is why I shut up.
Ms. Demings. Thank you, and with that, I yield back, Mr.
Chairman. Thank you so much.
Mr. Marino. I think everybody understands the rules here.
The chair now recognizes Congressman Buck from Colorado.
Mr. Buck. Thank you, Mr. Chairman, and I yield to as much
time as the young lady from Florida would like if she has any
further questions that she would like to ask.
Ms. Demings. I appreciate that. I appreciate your
willingness to do that, but I am complete. So thank you very
much.
Mr. Buck. You bet. Are any of you familiar with the
Northern Integrated Supply Project in northern Colorado? It
does not look like it. You are, Mr. Rickman?
Mr. Rickman. I know the name and I am aware of the project.
Mr. Buck. Okay.
Mr. Rickman. But I do not know much about it.
Mr. Buck. Well, it just seems like this is a recurring
theme that many Members of Congress hear about, and it is a
concern really to all of us. There is no profit incentive in
government, and there should not be necessarily a profit
incentive in government, but we cannot allow these issues to
drag on and on.
There were a dozen communities in northern Colorado, fairly
small towns, that got together to develop a water project. They
started 20 years ago. The five acres of land was wetlands and
so, the Federal Government had jurisdiction. The Army Corp of
Engineers had jurisdiction. It continued on and on.
There are two projects, actually, in Colorado. One is the
Chatfield Reservoir that was only filled half way, and they
wanted to fill it two-thirds of the way for drinking water for
the Denver area. It has been 20 years now since that started.
My question to all of you really is, and Mr. Rickman, we
can start with you. Do you understand the concern that we have
and the need for legislation and what we are trying to do here
in Congress? Balance interest. Not just take one side of this
issue but really, how do we protect the environment at the same
time that we try to speed this process up so we do not bankrupt
communities that are trying to develop drinking water?
Mr. Rickman. Absolutely we understand it. The organization
we work for; we are an environmental organization. We look at
the environment. We protect the environment, but we also
understand the need that we cannot predict and cannot control
the population coming into our area, and we have to have water
there and be available for public health and safety, unlike a
highway. A highway you can have traffic jams, but water is for
public health and safety and it takes much longer to develop.
Mr. Buck. And Professor Hammond, I guess the critical issue
in my mind is in northern Colorado there are two alternatives.
One, we can develop water. We send more water out of the State
than we are required to based on the compacts that we have. So,
we can develop water projects or municipalities, and they have
done this; buy farms. Take the water off the farms and let the
farms dry up, and that has a huge environmental impact in
drying up farms. We end up with dust bowls in areas, and if
that continues, because of the growing population in Colorado,
that has a serious environmental impact. So, there is no real
good answer here if we do not move this process along more
quickly. Your thoughts?
Ms. Hammond. It is absolutely fair to ask agencies to move
as expeditiously as possible provided we also are asking them
to do a good job, and it is a difficult thing to balance.
Mr. Buck. And the agencies do not have unlimited resources.
We just cannot throw a ton of money at this situation and say,
here is another hundred people. Go do the job.
Ms. Hammond. That is right, and that is why PLEA is
problematic. Because it does not recognize that agencies do
have those barriers to moving expeditiously and to doing that
good job. It slaps a very large Band-Aid on a much more
particular problem that is addressed in FAST-41.
Mr. Buck. Okay. Mr. Kovacs, any thoughts?
Mr. Kovacs. Well, whether you are a Republican or a
Democrat, one thing for years that I have heard, is I have got
this project in my district and how do we get it to move? And
one of the balances that was so important in FAST-41 is that it
recognized all the public participation has to come in, but it
has to come in in a coordinated way and in a timeframe so that
the agency can do it.
Second, by limiting FAST-41 to the $200 million and above
projects or those projects that have many multiple agencies
involved, it is limited to roughly about 200 projects in the
country, but they are the largest projects. It said we are
going to put our resources on these to get these out the door.
The reason that the Permit Litigation Efficiency Act is so
important is that it shortens the statute of limitations and
extends the definition of what is unreasonable delay to the
smaller projects so that they have some of the benefits of
FAST-41, since they cannot get all the benefits.
Mr. Buck. Great. Professor Elliott, just a little time
left. Any thoughts?
Mr. Elliott. I think the most important part is setting
deadlines, which then sets priorities. It is not just a matter
of funding but setting priorities. I think it is very important
to understand that the bonding requirement applies to seeking
an injunction to shut down a project does not close the
courthouse to anyone. They can do it just the way they do in
other cases, and that is get a final judicial opinion before
they seek to shut down a project.
Mr. Buck. Great. Well, thank you very much for all of you
being here. I appreciate it very much. Yes. I yield back.
Mr. Marino. Thank you. I have a couple questions to finish
up. Mr. Elliott, I do not think there is anybody in this room
that does not like clean air and clean water. I live out in the
country, and I get my water from a well behind my house while
watching a bear and a deer go through my property in the woods,
and they are taken very seriously. And everyone should be
concerned about our environment. But can you provide me with
some examples concerning what the long delays in permitting
review can actually end up perpetuating real environmental harm
caused by existing infrastructures?
Mr. Elliott. Certainly, Mr. Chairman. I have given a number
of examples in my testimony, but as a general matter, new
infrastructure is cleaner and more environmentally conscious
than the old infrastructure that it replaces. So, when we delay
new infrastructure by looking unnecessarily at very small
issues that really do not go to the environmental benefit of a
project, part of the cost is that the environmental benefit of
the project is deferred. That is a general answer to the
question, but there are lots and lots of examples, some of
which I have given in my testimony.
Mr. Marino. I can give an example, too. There is an
electric coal-fired plant in my district that spent millions of
dollars on scrubbing the exhaust. The whole nine yards. They
switched over to natural gas. It took years. Cost them tens of
millions of dollars because of the permitting process, but
finally, in about another month, that is going to go online.
So, there could have been significant cost reductions there if
we did not have to wait for the years and years that it took to
get the permitting process through.
Mr. Kovacs, in your estimation, you talked about jobs could
be created and how fast those jobs would become reality. Could
you expand on that a little bit, please?
Mr. Kovacs. I am sorry. Could you repeat the question?
Mr. Marino. Yes. Yes. You talked a little bit early on
about jobs and how those jobs are created. Could you expand on
that and how soon they would be created?
Mr. Kovacs. Sure. You know, if you are building a project--
and Project No Project, which was the study I think you
probably are referring to--if you looked at the number of jobs
that would be created by the various projects, it was 1.1
million jobs just during the construction period.
So, every project is going to create jobs, and the good
part about the Permit Litigation Efficiency Act that you are
considering today is that in the history of the United States,
until FAST-41 when a court was looking to impose an injunction
or being asked to impose an injunction, it looked at the
environmental benefits, but it never looked at the job
benefits. Right now, what would happen is the court would have
to look at not only the environmental benefits but also, the
impact on jobs of the community.
Mr. Marino. Okay. Professor Hammond, you talked about your
emphasis on access to justice in your written testimony, and I
support access to justice. I was a prosecutor for 18 years so,
I really know both in the State and the Federal system. But
what about quick access to water supply or replacement of
bridges, of roads that we are running into? Plants, housing
projects are going to go up that just take endless amounts of
time to get a permit, and then at the last moment when the
permit process is almost done, somebody runs in and says there
is an environmental issue in here.
Do you not think that they should be brought early on
instead of waiting in that I do know that there are groups out
there that wait until the last day and then file?
Ms. Hammond. They already must raise environmental issues
before the permitting agencies, before those permits can issue
if they plan to also seek consideration of those issues in
court. The issue in court is to say that the agency did not do
its job, which is something we should ask of our government in
addition to asking it to move as quickly as it reasonably can
on projects.
Mr. Marino. There is a reasonable presumption there before
the court and the agency can address that issue immediately.
Ms. Hammond. I am sorry, sir?
Mr. Marino. There is a reasonable, rebuttable presumption
that the agency can raise immediately in the court if they feel
that there is something that they missed concerning litigation.
Do you not agree with me on that? The agency certainly can come
in and address that issue immediately without waiting to the
end of the period or some environmental agency coming in and
saying, well, we have a problem here now.
Ms. Hammond. That is right. That is why we already ask
people to raise the issues there before the agency. Sometimes
the agency does not do it.
Mr. Marino. That is what I would like to see. If there are
environmental issues, let's raise them early on so we can
address it, and I know you have an issue about the $5 million
bond, but then again, that is discretionary. That is up to the
court, correct?
Ms. Hammond. It is discretionary, but it is certainly a
large and chilling number.
Mr. Marino. Well, the judge cannot impose that at all or
lower that significantly, correct? I have clerked for Federal
courts.
Ms. Hammond. One can make that argument, but one certainly
has to be fearful of the risk that they are taking with the
capriciousness of a particular judge in a given situation. And
I should note, this is for injunctions because you cannot put
the environment back.
Mr. Marino. Yes. Yes, but also, how about the
capriciousness of a judge that just simply says, look? Okay. I
am going to grant this injunction and we are going to slow this
project down. So, you know, you can make that argument. I can
make this argument. We certainly want our environment to be
clean, and I am right out there with everybody on that, but we
have to get these permits done to create jobs. Thank you very
much. I appreciate you all being here.
Without objection, the following items will be made a part
of the record: A letter of support by the U.S. Chamber of
Commerce for the Permitting Litigation Efficiency Act of 2018
and the administration's new interagency memorandum of
understanding on permitting, which sets a goal of 2 years for
completion of permit review for major infrastructure projects.
These materials are available at the Committee or on the
Committee Repository at: https://docs.house.gov/meetings/JU/
JU05/20180412/108120/HHRG-115-JU05-20180412-SD002.pdf.
Ms. Demings. Mr. Chairman.
Mr. Marino. Yes.
Ms. Demings. Thank you for that recognition. I ask a
unanimous consent to insert into the record a letter from
several groups, including the American Association of Justice,
The Center for Biological Diversity, Center for Justice and
Democracy, Earth Justice, and several others that could not be
with us today, but certainly have grave concerns about the
legislation we are discussing today.
Mr. Marino. Without objection, all the above requests will
be entered as part of the record.
These materials are available at the Committee or on the
Committee Repository at: https://docs.house.gov/meetings/JU/
JU05/20180412/108120/HHRG-115-JU05-20180412-SD003.pdf.
Ms. Demings. Thank you.
Mr. Marino. This concludes our hearing. I want to thank all
the witnesses for being here. I am speaking for all of us. I
know we learn from you when you take the time to travel here
and have discussion with us. I know I, personally, learn a
great deal every time I leave one of our hearings and other
hearings that I sit in, and my door is always open. You always
have the invitation to come and visit, and to send me
information that you would like us to have so we understand all
points in these issues.
I was involved some time ago in trying to get a bypass put
in my district which was on the board for 60 years for a myriad
of reasons. Well, the first thing I did was get everybody in
the same room; the Feds, the States, and the locals, and I
asked them: Did you ever meet before to sort out these issues?
They said, no.
Construction started a couple of years ago, thousands of
jobs, and in 8 years there is going to be a completion of some
beautiful highway that is going to be safer for our drivers and
create more business for the establishing stores that are in
operation around it for people to get in and out.
I know when my wife says to me, let's go down to the mall,
I say, ``No, no, no. I have got to go through all that traffic.
Please do not make me do that.'' But this will make it more
efficient.
We are adjourned and thank you all very much for being
here.
[Whereupon, at 1:03 p.m., the Subcommittee adjourned.]