    [Senate Hearing 115-54]
    [From the U.S. Government Publishing Office]

                                                             S. Hrg. 115-54

                        WATER RESOURCES: THE ROLE OF THE
                           PUBLIC AND PRIVATE SECTORS

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

                                    HEARING

                                   before the

                        SUBCOMMITTEE ON TRANSPORTATION
                               AND INFRASTRUCTURE

                                     of the

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS
                              UNITED STATES SENATE

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  MAY 9, 2017

                                   __________

      Printed for the use of the Committee on Environment and Public Works

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                   COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                         ONE HUNDRED FIFTEENTH CONGRESS
                                 FIRST SESSION

                        JOHN BARRASSO, Wyoming, Chairman
    JAMES M. INHOFE, Oklahoma            THOMAS R. CARPER, Delaware
    SHELLEY MOORE CAPITO, West Virginia  BENJAMIN L. CARDIN, Maryland
    JOHN BOOZMAN, Arkansas               BERNARD SANDERS, Vermont
    ROGER WICKER, Mississippi            SHELDON WHITEHOUSE, Rhode Island
    DEB FISCHER, Nebraska                JEFF MERKLEY, Oregon
    JERRY MORAN, Kansas                  KIRSTEN GILLIBRAND, New York
    MIKE ROUNDS, South Dakota            CORY A. BOOKER, New Jersey
    JONI ERNST, Iowa                     EDWARD J. MARKEY, Massachusetts
    DAN SULLIVAN, Alaska                 TAMMY DUCKWORTH, Illinois
    RICHARD SHELBY, Alabama              KAMALA HARRIS, California

                  Richard M. Russell, Majority Staff Director
                   Gabrielle Batkin, Minority Staff Director
                                  ----------

               Subcommittee on Transportation and Infrastructure

                      JAMES M. INHOFE, Oklahoma, Chairman
    SHELLEY MOORE CAPITO, West Virginia  BENJAMIN L. CARDIN, Maryland
    JOHN BOOZMAN, Arkansas               BERNARD SANDERS, Vermont
    ROGER WICKER, Mississippi            SHELDON WHITEHOUSE, Rhode Island
    DEB FISCHER, Nebraska                JEFF MERKLEY, Oregon
    JERRY MORGAN, Kansas                 KIRSTEN GILLIBRAND, New York
    JONI ERNST, Iowa                     EDWARD J. MARKEY, Massachusetts
    DAN SULLIVAN, Alaska                 TAMMY DUCKWORTH, Illinois
    RICHARD SHELBY, Alabama              KAMALA HARRIS, California
    JOHN BARRASSO, Wyoming (ex officio)  THOMAS R. CARPER, Delaware (ex
                                             officio)

                                C O N T E N T S

                                  ----------
                                                                       Page

                                  MAY 9, 2017
                               OPENING STATEMENTS

    Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     1
    Cardin, Hon. Benjamin, U.S. Senator from the State of Maryland...     5

                                   WITNESSES

    Semonite, Lieutenant General Todd T., Commanding General and
      Chief of Engineers, U.S. Army Corps of Engineers...............     7
        Prepared statement...........................................     9
        Response to an additional question from Senator Duckworth....    12
    Lyons, James K., Director/CEO, Alabama State Port Authority......    13
        Prepared statement...........................................    15
    Humphreys, Grant, Town Founder, Carlton Landing, Oklahoma........    21
        Prepared statement...........................................    24
    Rahn, Pete K., Maryland Secretary of Transportation..............    66
        Prepared statement...........................................    68
    Goche, Rick, Commissioner, Port of Bandon........................    72
        Prepared statement...........................................    74

                              ADDITIONAL MATERIAL

    Letter from American Rivers, Rivers Connect Us...................    99

          WATER RESOURCES: THE ROLE OF THE PUBLIC AND PRIVATE SECTORS

                                  ----------

                              TUESDAY, MAY 9, 2017

                                   U.S. Senate,
             Committee on Environment and Public Works,
             Subcommittee on Transportation and Infrastructure,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 2:33 p.m. in
    room 406, Dirksen Senate Building, Hon. James Inhofe (chairman
    of the subcommittee) presiding. Present: Senators Inhofe,
    Capito, Boozman, Moran, Ernst, Sullivan, Shelby, Cardin,
    Merkley, Gillibrand, Markey, Duckworth and Harris.
        Senator Inhofe. Committee will come to order.
        Since we do have members here who want to be recognized to
    introduce different ones, I happen to be one of those, I think
    we might go ahead before opening statements and do that before
    we lose someone.
        We already know Lieutenant General Todd Semonite. This is
    your third time here, is that correct?
        Lieutenant General Todd. Yes, sir.
        Senator Inhofe. You are a regular here.
        I would recognize at this time Senator Cardin to introduce
    Pete Rahn.
        Senator Cardin. Mr. Chairman, thank you very much.
        It is a pleasure to have Secretary Rahn here before our
    committee. He is the Secretary of Transportation for Maryland.
        As I was telling the Chairman, this is the third State
    where he has been Secretary of Transportation. He has also
    directed the Missouri Department of Transportation and the New
    Mexico State Highway and Transportation Department. He just
    cannot hold on to a job.
        We are very proud of the work he does in Maryland. We have
    a pretty challenging organization in Maryland where the
    Secretary of Transportation is responsible for all modes of
    transportation and coordinating all modes of transportation.
        Mr. Rahn has done an outstanding job in directing that
    department. It is a very large budget.
        He also served as President of the American Association of
    State Highway and Transportation Officials from 2007 to 2008.
    He has served in other positions in national leadership. We are
    proud to have him before our committee.
        Senator Inhofe. Very good.
        I will recognize Senator Merkley for your introduction.
        Senator Merkley. Thank you, Mr. Chairman and Ranking
    Member, for holding this subcommittee hearing to discuss the
    importance of investing in our ports and waterway
    infrastructure.
        I am pleased to introduce Bandon Port Commissioner Rick
    Goche from my home State of Oregon who is here to testify. Not
    only is he a port commissioner, he has been a fisherman and
    small businessman for almost 50 years. He is involved in many
    aspects of the fishing community. He owns and operates a
    fishing vessel, Peso II, and owns the Sacred Sea Tuna brand.
        He is the Chairman of the Oregon Albacore Commission. He is
    President of Aquatic Resources Inc., a consulting group for
    live seafood holding and shipping. He is Chairman of FISHCRED,
    a statewide fishermen's organization.
        Very few people know as intimately as Rick the importance
    of maintenance for our small ports, our navigation channels and
    our jetties. In fact, Rick should probably be at home preparing
    his boat for annual maintenance but he is here on behalf of the
    fishermen whose lives and livelihoods depend on this funding to
    make sure they can get to safe harbor.
        He has crossed about every bar between San Francisco and
    Canada. He is here to advocate for the Army Corps budget to
    make sure our small ports stay the economic driver of our
    coastal communities.
        Thank you for being here, Commissioner. We appreciate it.
        Senator Inhofe. Thank you. Welcome, Commissioner Goche.
        Senator Shelby, would you like to introduce Mr. Lyons?
        Senator Shelby. Thank you, Chairman Inhofe and Ranking
    Member Cardin.
        It is a great opportunity for me today to introduce James
    Lyons who is the Director and CEO of the Alabama State Port
    Authority. I am glad he could join us here today.
        I have known Jimmy and his family for many years and the
    work he has done at the Port Authority of Mobile. The Port of
    Mobile has not only been vital to our State but also to the
    Gulf Coast Region.
        Jimmy, as I said, is the Director and CEO of Alabama State
    Port Authority. The Port of Mobile is currently the tenth
    largest U.S. seaport in import and export of domestic trade by
    total volume.
        The port's largest commodities are coal, crude oil, steel
    and petroleum. In any given year, between 52,000,000 to
    67,000,000 tons of cargo is moved annually through the port.
    That number continues to grow.
        Jimmy Lyons has continuously worked to meet the growing
    demands of post-Panama Canal market. In 2014, the Port
    Authority submitted a request to the Corps of Engineers to
    consider increasing the depth and width of the Mobile Harbor
    channel to its authorized dimensions.
        The Corps subsequently began a general reevaluation report
    which examines potential costs and benefits associated with the
    deepening and widening of the port. This study is expected to
    conclude in 2019.
        Mr. Chairman, the Port of Mobile provides access to nearly
    15,000 miles of inland waterways serving the Great Lakes, the
    Ohio Valley, the upper Mississippi and Tennessee Valley ports.
    Simply put, the ports serve as an economic driver for much more
    than just Mobile.
        The new Administration has made economic growth a top
    priority to ensure that our industries and businesses, big and
    small, can continue to compete in the increasingly complicated
    global marketplace.
        To facilitate this growth, it is important that Congress
    make infrastructure legislation a priority. The Corps plays, as
    we all know an important role in modernizing our Nation's
    waterways. Corps projects provide more than $100 billion
    annually in net economic benefits. I believe this demonstrates
    the job creation and economic growth associated with such
    investments.
        I am thankful the committee today, under your leadership,
    is working to understand the challenges we are facing. I look
    forward to the testimony of all the witnesses.
        Thank you, Mr. Chairman.
        Senator Inhofe. Director Lyons, welcome.
        I will not say we saved the best to last; that sounds a
    little self-serving but we have Mr. Grant Humphreys, Town
    Founder of Carlton Landing, Oklahoma. I am happy to have Grant
    here. I have known his daddy, Kurt, for longer than he has been
    alive. It is a pleasure having you here in the capacity of what
    you are doing successfully in Oklahoma.
        He is a real eState developer, investor and homebuilder.
    About 10 years ago, Grant began the process of founding and
    developing Carlton Landing at Lake Eufaula, Oklahoma.
        Some of you may not be aware of the fact that Oklahoma has
    more miles of freshwater shoreline than any of the 50 States.
    Did you know that, Senator Shelby?
        Senator Shelby. I did not.
        Senator Inhofe. In Carlton Landing, Grant has embarked on
    an ambitious project which is already showing great successes
    which he will be sharing with us.
        In addition to founding and developing Carlton Landing,
    Grant is also the founder and principal of Traditional Craft
    Homes, a home building company providing custom and specific
    production homes.
        In developing a project on Lake Eufaula, Grant has become
    involved with a community of lake developers in the region and
    can speak to his experience and that of others with getting a
    project started.
        I welcome you here today, Grant.

                OPENING STATEMENT OF HON. JAMES INHOFE,
                U.S. SENATOR FROM THE STATE OF OKLAHOMA

        Senator Inhofe. Today's first Transportation and
    Infrastructure Subcommittee hearing is on a subject that is
    very important to Nation, including my home State of Oklahoma.
    Our Nation's water resources provide our economy with a
    platform for the movement of goods to facilitate trade with the
    world, bring jobs and many other benefits to the communities
    that surround them.
        U.S. Corps of Engineers projects generate over $109 billion
    annually in economic benefits and generate over $34 billion in
    revenue to the United States Treasury.
        Unfortunately, like most of our infrastructure, our water
    resources are aging and in great need of repair and upgrading.
    Recognizing this need, the last two Congresses have worked to
    authorize new projects and create reforms to provide more
    Federal funding and also private investment, something we could
    not do not too long ago.
        Today's hearing will explore the benefits our water
    resources provide to local and national economies and examine
    the continued needs that must be met so the U.S. can remain
    globally competitive, provide jobs and other local benefits
    here at home.
        In Oklahoma, we know these benefits firsthand with ports
    along the McClellan-Kerr-Arkansas Navigation System connecting
    Oklahoma with the Mississippi River and with the rest of the
    world.
        With over 20 Army Corps of Engineers-managed lakes in my
    State, our industries and our citizens know the impact of our
    many water resource projects through cheaper goods, cheaper
    electricity, jobs, flood protection and many recreational
    opportunities.
        The McClellan-Kerr-Arkansas River Nation System is 445
    miles long and spans Arkansas and the eastern part of Oklahoma.
    Between the Port of Muskogee and Tulsa Port of Catoosa,
    Oklahoma ports are home to over 70 companies and industries
    shipping 5.7 million tons of cargo with values of $22.56
    billion, employing more than 6,500 Oklahomans and creating an
    overall economic impact of more than $400 million to my State
    each year.
        The ability to move all kinds of goods without relying
    solely on one form of transportation keeps shipping costs low,
    benefiting companies that ship their wares regionally and
    globally, and benefiting consumers who can further stretch
    their dollars.
        In addition to moving products and manufactured goods,
    other Army Corps projects help our communities by providing for
    flood risk management, water storage, hydropower and
    recreation.
        Every authorized use of a Corps project allows the
    surrounding communities to realize a greater potential for
    economic development and improves the quality of life for those
    who depend on the infrastructure either directly or indirectly.
        The challenge before us today is to understand the full
    need for repairing and maintaining our current infrastructure
    and the need for new projects to ensure that the United States
    remains globally competitive and our communities continue to
    reap the benefits of the Army Corps infrastructure.
        With the top of infrastructure in the news during the
    election cycle and within the new Administration, the time is
    now to work toward solutions to meeting these needs.
        I thank our witnesses for being here today.
        I want to make one comment about the attendance here. This
    is taking place at the same time we are having a Senate Armed
    Services Committee hearing of which I am the Ranking Member, so
    it is difficult to be in two places at once. We will be going
    back and forth.
        Senator Cardin.

              OPENING STATEMENT OF HON. BENJAMIN CARDIN,
                U.S. SENATOR FROM THE STATE OF MARYLAND

        Senator Cardin. First, Mr. Chairman, let me say what a
    pleasure it is to be sitting next to you in this committee as
    we convene the first public hearing of our subcommittee.
        Senator Inhofe and I came to the U.S. Congress on the same
    day in the House of Representatives. We have been friends ever
    since. It is a real pleasure to serve with him on this
    subcommittee because, I am going to let you in on a secret,
    Senator Inhofe is one of the most progressive people I know in
    this Country on infrastructure development.
        Senator Inhofe. I am glad you qualified that.
        Senator Cardin. I always told him I would be glad to come
    to his State to campaign for him but he told he would prefer me
    to stay in Maryland.
        The two of us share a passion for the importance of water
    infrastructure, roads and bridges, and transit systems for the
    entire modernization of our infrastructure because both of us
    understand it means jobs. It means U.S. competitiveness. It
    means America having the ability to compete globally. That is
    what it means. We recognize the importance of the governmental
    part, the private sector part and putting this all together.
        I particularly want to acknowledge my pleasure to serve as
    the Ranking Member with Senator Inhofe on this subcommittee. I
    think it is very appropriate that our first hearing deals with
    the role of public-private sector and water resources because
    we need both.
        You heard Senator Inhofe brag a little bit about his State
    on water projects. Well, I could spend the next 2 hours talking
    about the State of Maryland. I am not going to do that but I am
    going to compliment again Secretary Rahn for the leadership we
    have in our Maryland port.
        I had a briefing on the Maryland port last week. We are
    doing extremely well. For January 2017, the Port of Baltimore
    hit another record month. We are the closest to the Midwest and
    any other East Coast port which gives Maryland an advantage. We
    rank ninth overall in value of cargo. Baltimore is well known
    for the cars that come in and out of that port as the largest
    in that region. We are significantly increasing our capacity on
    containers, we handle a great deal.
        One of the facts I have to put in the record and brag about
    is the General Commerce ranked the Port of Baltimore as No. 1
    in the Nation for container berth productivity for 3 years in a
    row, with the port averaging 71 container movements each hour
    per berth. We are pretty efficient and are proud of our
    efficiency in the Port of Baltimore.
        Under our State leadership, we moved quickly recognizing
    that the expansion of the Panama Canal would allow larger
    vessels to be able to be handled. We had to add the facilities
    to the Port of Baltimore in order to be able to deal with that.
    Baltimore is one of only four eastern U.S. ports with a 50-foot
    channel and a 50-foot container berth allowing it to
    accommodate some of the largest container ships in the world.
        On July 19, 2016, the Ever Lambent cargo carrier from
    Taiwan was the first super-sized container ship to reach
    Baltimore through the Panama Canal, so we are ready. It is
    critically important to our economy.
        I have some numbers. This will be typical of just about
    every port in our Country. The business from the port generates
    13,000-plus direct jobs, with more than 127 jobs in total in
    Maryland linked to the port activities. This is very important
    to our economy. Three billion dollars in wages and salaries
    contribute more than $310 million to State and local tax
    revenues.
        This is important business for a Senator from Maryland. It
    is important business for a Senator from every one of our
    States. That is why we are particularly pleased to have this
    hearing.
        I do want to point out that we cannot do this just by one
    of the stakeholders alone. We appreciate the role the Federal
    Government plays. It is very important, the direct help of
    water resources. We will talk today a bit about the next
    important leg in Maryland which is Mid Bay on the dredging
    materials and reclaiming of lands.
        My predecessor, Senator Sarbanes, was directly responsible
    for Poplar Island, which has been a great success and a model
    for the Nation, allowing reclaiming of land as well as location
    for dredge material. We now need to move on to Mid Bay, which
    has already been studied. I think we are on track, but we will
    talk about it.
        We also need the roads, the bridges, the rail and also the
    private sector. This hearing is an attempt to try to understand
    that we need all the above. I hope, as a result of this hearing
    and further hearings we have, that we will be able to get the
    investments by the public and private sector so that American,
    indeed, be competitive in our port and water activities so we
    can get the job growth that the people of this Country need.
        [The prepared statement of Senator Cardin follows:]

        Senator Inhofe. Thank you, Senator Cardin.
        Let me say that we have worked so well together for so many
    years and we work on things that actually become productive.
    Confession is good for the soul, if you will pardon me for
    bragging a little bit.
        When we had been having our meeting with the Chairman on
    the Republican side every Tuesday at 12:15, when it comes to my
    turn, I always say, now, from the committee that actually does
    things because we did.
        I would say to my friend, Senator Cardin, we had the FAST
    Act, the Water Act, we had TSCA, the Chemical Act, three of the
    four largest projects or bills actually passed. We are used to
    accomplishing things.
        We have many, such as Senator Capito and I, who have other
    committees at the same time so, because we have five witnesses,
    we are going to try to get you to adhere, if you would, to the
    5-minute limit on your comments. Of course your entire
    statement will be made a part of the record.
        We will start with General Semonite.

     STATEMENT OF LIEUTENANT GENERAL TODD T. SEMONITE, COMMANDING
      GENERAL AND CHIEF OF ENGINEERS, U.S. ARMY CORPS OF ENGINEERS

        General Semonite. General Inhofe, Ranking Member Cardin and
    distinguished members of the subcommittee, I am Lieutenant
    General Todd T. Semonite, Commanding General of the U.S. Army
    Corps of Engineers and the 54th Chief of Engineers.
        I am pleased to be here today to discuss the role of the
    United States Army Corps of Engineers Civil Works Program and
    the associated value of water resource investments across the
    Nation.
        The Corps has played a significant a significant role in
    the development of the Nation's water resources and currently
    manages an extensive national water resource infrastructure
    portfolio. This includes maintenance of 13,000 miles of coastal
    navigation channels, 12,000 miles of inland waterways, 715
    dams, 241 locks, 14,000 miles of levees and hydropower plants
    at 75 locations.
        These projects help provide risk reduction from flooding in
    our river valleys and along our coasts, facilitate the movement
    of approximately 2 billion tons of waterborne commerce and
    provide up to 24 percent of the Nation's hydropower.
        There are about 250 million recreational visits a year to
    Corps lands and reservoirs, making the Corps one of the top
    Federal recreation providers.
        Corps water resource investments bring significant value to
    the Nation. For example, the United States maritime and
    transportation industry supports approximately $2 trillion in
    commerce with over 2 billion tons of commerce moving through
    harbors, channels and waterways constructed and maintained by
    the Corps.
        Approximately 98 percent of the United States overseas
    trade by weight and 99 percent by volume enters or leaves the
    United States through a U.S. coastal port. The inland waterways
    support this commerce by facilitating the export of
    approximately 60 percent of U.S. grain, 22 percent of coal and
    22 percent of petroleum products.
        Corps risk reduction management projects and activities
    provide resilient risk reduction infrastructure and prepare
    individuals and communities for potential floods. The Corps is
    responsible for the construction and operation of 383 major dam
    and reservoir projects that regulate floodwaters in the
    Nation's major rivers and tributaries and has constructed over
    14,700 miles of levees in partnership with local, non-Federal
    partners.
        Additionally, the Corps has constructed over 90 major
    coastal shoreline protection projects along 240 miles of the
    Nation's coastline that provides storm damage reduction
    benefits to vulnerable coastal communities.
        Over the past 10 years, it is estimated, on average, the
    Corps risk management reduction projects have prevented over
    $65 billion worth of flood damages to urban and rural
    communities across the Nation.
        The Corps maintains recreation facilities at over 400 of
    its multipurpose projects. The Corps has a long history of
    developing partnership within existing recreation authorities.
    It leases about half of the 5,000 recreationsites at these
    multipurpose projects to the public and private entities,
    including private sector commercial operators, States and local
    governments.
        Private recreationsites include approximately 562 privately
    owned marinas, resorts, campgrounds, boat ramps, fuel docks,
    convenience stores and other public use areas.
        The Corps constructed much of this infrastructure in the
    first half of the twentieth century. Some of it is experiencing
    various stages of degradation and disrepair. In fact,
    approximately half of the Corps lock and dam facilities are
    more than 50 years old and bring operations and maintenance
    challenges commensurate with their age.
        The Corps dedicates a significant amount of its resources
    to maintain the key features of these locks and dams,
    hydropower facilities and other water resources infrastructure.
    Per these requirements, a significant portion of the Civil
    Works Program is devoted to maintaining these systems so they
    can continue to provide economic and environmental benefits to
    the Nation and to address significant risk to safety.
        To support the current and future requirements of the
    Nation's water resource infrastructure, the Corps is exploring
    alternative financing and funding options, including public-
    private partnerships, also referred to as P-3s through an
    assessment of private policy requirements and application of
    project-specific experience. The Corps is seeking to
    demonstrate how collaboration between the public and private
    sectors may improve the Corps' ability to deliver the Nation's
    infrastructure needs.
        The Corps recognizes that significant investments are
    required to sustain the performance of our water infrastructure
    portfolio to an acceptable level of risk. We greatly appreciate
    the support from the Congress in addressing these needs.
        As required in WRDA 2014, the Corps provided a report to
    Congress in the spring of 2016 capturing lessons learned from
    the exploration of P-3 concepts to date. As part of that
    journey, and with the support of Congress, the Corps was able
    to start Fargo-Moorehead Risk Management Project in North
    Dakota.
        We acknowledge the congressional direction in the recent
    Fiscal Year 2017 appropriation language regarding the need for
    a more robust P-3 policy and look forward to working with
    Congress and the Administration to develop this policy
    guidance.
        Investments by the Civil Works Program reduces the risk of
    flood impacts in communities throughout the Nation, facilitates
    commercial navigation, restores and protects significant
    ecosystems, generates low cost renewable hydropower and
    supports American jobs.
        Continued investment in critical civil works infrastructure
    projects is an investment in the Nation's economy, security,
    employment and quality of life, now and into the future.
        Thank you for the privilege of testifying about the Corps'
    role in sustaining the Nation's water resource infrastructure
    and economic opportunities associated with our Civil Works
    Program.
        I am happy to answer any questions you may have.
        [The prepared statement of General Semonite follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Inhofe. Very good. Thank you, General.
        Director Lyons.

     STATEMENT OF JAMES K. LYONS, DIRECTOR/CEO, ALABAMA STATE PORT
                               AUTHORITY

        Mr. Lyons. Thank you, Mr. Chairman, Ranking Member Cardin,
    and distinguished members of the subcommittee.
        My organization, the Alabama State Port Authority, is the
    non-Federal sponsor at the Port of Mobile which as Senator
    Shelby mentioned, is the tenth largest U.S. seaport by total
    trade.
        The committee understands that 80 percent of global
    consumption occurs outside our borders and ships carrying our
    commerce are getting much larger than our deepwater seaports
    can handle. At Mobile, Post-Panamax or wide-bodied tankers are
    already servicing our terminals, albeit inefficiently.
        Despite our constraints, we have attracted manufacturing
    and retail distribution investments, including Wal-Mart's newly
    announced 2.6 million square foot international distribution
    center which is presently under construction.
        Growth is unsustainable at our current channel depth and
    width. My organization has invested over $850 million in
    facilities and Federal channel infrastructure. Two of our
    investments in the private petroleum terminals recently
    reported double digit cargo growth.
        Mobile's public and private terminals generate about $23.5
    billion in economic value and employ over 154,000 people. On
    the larger scale, the U.S. seaports generate $4.6 trillion in
    economic value.
        U.S seaports will invest $154.8 billion and create 1.6
    million jobs by 2020 and 82 percent of that investment will
    occur in the U.S. gulf. Ports are doing their part to grow the
    economy and we provide significant return on Federal
    investment.
        The time has now come for both the Administration and
    Congress to give equal weight to seaports when grappling with
    infrastructure investments. Under-investment and under-funding
    the Corps' Civil Works Program results in inefficient, poorly
    maintained harbors, thereby increasing shipper costs, reducing
    our global competitiveness, aggravating the maintenance,
    dredging backlog, adversely impacting our tax base and job
    market.
        We must endeavor to revise law and reform procedures to
    better plan, fund, implement and maintain waterway
    infrastructure necessary for U.S. commerce. I will respectfully
    a few suggestions to achieve these goals.
        One is continue biennial review of the Water Resources
    Development Act to further timely reforms. Also, the Corps
    should submit annually to Congress a comprehensive report on
    its Civil Works Program to provide line item insight to program
    progression and costs.
        Two is the Corps should implement a strategic 5 year budget
    cycle. Today, the Corps works on 2 year budgets that fail to
    capture any project's full capital need through implementation.
        For example, the Corps' budget will only address two of the
    three-plus years of an authorized study and provides no
    guarantees for project engineering and design or construction
    phase funding. Once authorized projects are in the pipeline,
    they should be budgeted and secure funds through to completion.
        Three is to provide full allocation of the Harbor
    Maintenance Trust Fund available funds to guarantee year-in and
    year-out maintenance obligations. Five year budgeting cycles
    could provide Congress with specifics on long range maintenance
    funding obligations while providing new insights into newly
    authorized project maintenance.
        Fourth is to streamline the 3-3-3 Rule waiver process.
    Complex studies require necessary science to comply with NEPA.
    Much of that science takes a year or more to complete. Corps
    guidance requires that waivers be held until its tentatively
    selected plan is completed, adding up to a year to the project.
    Streamline the process and delegate the waiver decision
    authority to the division commander.
        Five is to reduce or eliminate the external peer review so
    the Corps has qualified professionals capable of sound
    engineering and program delivery. Many external experts do not
    understand Corps processes or mandates. The Corps focuses on
    educating consultants on the why rather than sound engineering
    further delaying implementation.
        We agree we must modernize our ports and it will cost
    billions of dollars. As deepened and widened channels come
    online, there will be additional demands on the Harbor
    Maintenance Trust Fund.
        We achieve significant gains in asset management through
    risk-based analysis and performance-based budgeting but we need
    to take a longer view toward budgeting and identifying program
    savings by reducing bureaucracy.
        The Alabama State Port Authority thanks this committee for
    its leadership and recognizing the nexus between water
    resources and economic prosperity. I appreciate this
    opportunity and am happy to address any questions.
        [The prepared statement of Mr. Lyons follows:]

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        Senator Inhofe. Thank you, Director Lyons.
        Mr. Humphreys.

     STATEMENT OF GRANT HUMPHREYS, TOWN FOUNDER, CARLTON LANDING,
                                OKLAHOMA

        Mr. Humphreys. Chairman Inhofe, Ranking Member Cardin and
    distinguished members of the committee, it is a pleasure to be
    here today.
        As a third generation real eState investor and developer
    from Oklahoma, we the pleasure of creating places that foster
    community and allow folks to live healthy and rewarding lives.
        Our family has had a long history on Lake Eufaula. We have
    been there for over 45 years now.
        Ten years ago, we began a journey of creating a new town on
    the shores of Lake Eufaula in southeast Oklahoma. We call the
    place Carlton Landing. The site we chose was a 1,900-acre site
    that was on the same cove where I learned to water ski as a
    boy. The land is connected to 10 miles of shoreline that is
    either owned or controlled by the Corps of Engineers.
        It is our desire that Carlton Landing would be seen as a
    model for good development, the kind that conserves our natural
    assets, that provides a boost to rural economies and creates
    great places for people to live, work, create and play.
        Before I share a story, I want to say a few words about the
    Corps staff. We have worked closely with the Corps staff since
    2007 and have built a good rapport. To their credit, we found
    them to be accessible, responsive, capable and committed. I
    have great respect for their authority and the critical nature
    of their mission.
        Here is our story. In 2008, we put together a master plan
    for Carlton Landing which included 3,000 homes, a town center,
    shops, restaurants, schools, churches, parks and trails. The
    vision was to create a complete lakefront community. Since the
    Corps controlled all access to the lake, from the beginning we
    understood that our ability to implement that vision would be
    absolutely dependent on our ability to work with the Corps.
        We requested a minor zoning change that would allow us to
    have walking trails to access the lake, must a four foot-wide,
    gravel chip trail. It was suggested that we partner with a
    conservation group, so we partnered with the Nature
    Conservancy. Then it was suggested that we might have a
    smoother track to get approval if we were a public entity, so
    we went through the process of actually taking our master plan
    community and incorporating it into a public municipality.
        Over a 3-year timeframe, through all these steps, the
    Corps' response to our rezoning request was professional,
    courteous but it was always the answer ``no.''
        Title 36 specifically empowers the District Commander to
    use discretion in making minor changes to a shoreline
    management plan. We discovered that due to the fact that the
    Eufaula EIS and not been updated since 1977, the previous
    District Commander at the Tulsa District Office had made
    promises to Federal environmental agencies that absolutely no
    changes would be made until a new EIS was completed. EIS's take
    funding and Congress had deferred that funding for several
    sessions.
        We were also informed that private money could not be
    accepted. The lake was in a zoning gridlock and the local Corps
    staff's hands were tied.
        By the summer of 2010, it appeared that our vision for
    Carlton Landing was dead in the water. In March 2011, Senator
    Inhofe met directly with the Tulsa District Commander. Within
    days, we saw a new tone. Forward motion was realized and the
    Corps staff was now on a new mission to update the Eufaula EIS.
        By April 2013, the EIS was completed and a new shoreline
    management plan was created. The rezoning action that we needed
    was complete.
        By 2015, the Town of Carlton Landing had completed a long
    term lease of 420 acres of Federal lands from the Corps. Today,
    we are working on dozens of projects still with the Corps
    office trying to bring that vision to fruition.
        Ultimately, it took us 8 years to obtain Corps permission
    to install a community boat dock with a gangway attached to our
    own land, 8 years. Somehow, despite the regulatory roadblock,
    we were able to start and create a lake town even though we did
    not have lake access.
        While it is true we have had success with the Corps, the
    journey to get here has been anything but easy. Unfortunately,
    our success came only after direct, top-down political pressure
    from the highest levels in Washington.
        Without a forceful hand of political involvement to
    unfreeze the process and create a door of opportunity, I
    believe our efforts would continue to bear no fruit. In our
    case, the staff was well intended but their hands were tied by
    past commitments and regulatory gridlock.
        It is unclear how many Corps projects are affected by the
    same structural barriers that have been established over time
    but issues such as the petrified EIS or a frozen shoreline
    management plan are a deal killer for a private developer.
        This should not be the case because it limits success only
    to those with political connections, deep pockets and the
    ability to wade through unrealistic timelines. Every private
    sector developer project, Carlton Landing included, is
    absolutely dependent upon obtaining assurances of entitlements
    within a reasonable timeframe.
        In preparation for today's hearing, I received good
    feedback from several developers from across the Country. Some
    have had a positive experience with the Corps, but several have
    had a very troubling experience. Some had experiences so
    difficult that they had to walk away from the deal resulting in
    significant financial loss. I think that is more the norm than
    the exception.
        I appreciate General Semonite's no-nonsense approach to
    accomplishing his mission. I believe he is the kind of leader
    that the Corps needs to turn around the ship and create a
    culture of action that brings about the desired outcomes.
        I also appreciate the legislative work of the Water
    Resources Development Act. It gives clear direction and aims at
    the right targets.
        In closing, there is a strong market for careful, smart,
    sustainable development on our Nation's lakes, rivers and
    waterways. The Corps is in a position to either encourage or
    hinder economic growth at the local level.
        If we are serious about attracting private investment in
    and around our natural resources in a way that protects our
    natural assets while also maximizing their value, I believe it
    is necessary to set the table for developers and create a
    better process to clearly define the Corps' regulatory
    landscape in a way that works for the private sector.
        Thank you.
        [The prepared statement of Mr. Humphreys follows:]

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        Senator Inhofe. Thank you, Mr. Humphreys.
        Secretary Rahn.

    STATEMENT OF PETE K. RAHN, MARYLAND SECRETARY OF TRANSPORTATION

        Mr. Rahn. Good afternoon, Mr. Chairman, Ranking Member
    Cardin and members of the subcommittee. Thank you for inviting
    me to discuss the roles of the public and private sectors for
    our ports.
        Ports are the key links in U.S. access to the global
    transportation network and Federal navigation channels provide
    access to these facilities. I thank the Committee for
    continuing to support maritime infrastructure and commerce,
    especially with respect to essential dredging projects that
    keep our shipping channels, our maritime highways, safe and
    open for business. This is a high priority for the Hogan
    Administration.
        The Helen Delich Bentley Port of Baltimore is an economic
    engine, not just for Maryland and the region, but for our
    Nation. As Senator Cardin mentioned in his opening remarks, it
    generates approximately 13,650 direct jobs and about 128,000
    total jobs linked to port activities. It is noteworthy that the
    average income for the port direct job is 16 percent higher
    than the average Maryland salary.
        Our public-private partnership agreement with Ports America
    Chesapeake and the availability of a 50-foot deep container
    berth has positioned the Port of Baltimore to attract cargo
    growth associated with last year's Panama Canal expansion. Our
    tonnage increased 9.3 percent in the first 8 months since the
    Canal opened. The port's coal business also increased
    significantly over the same period, as these ships need deep
    water too.
        The U.S. Army Corps of Engineers has been very responsive
    to our port, to our shippers, carriers and congressional
    concerns about the planning process for channel improvements
    and has initiated reforms that were included WRRDA 2014.
        Because of these planning reforms, WRRDA 2014 and WRDA 2016
    authorized nine major port projects that provide for channel
    improvements to accommodate the new generation of larger and
    much more economically efficient ships and capitalize on the
    opening of the improved Panama Canal.
        This inventory of new projects, along with several ongoing
    efforts that predate WRRDA 2014, produced an inventory of 11
    projects with a total cost in excess of $4 billion and a
    Federal cost in excess of $2.5 billion. Out of the 11 projects
    to date, only two received Federal funding and a third project
    was completed by a port that simply could not wait for Federal
    funding.
        The average appropriation over the last 8 years for coastal
    navigation construction has been about $170 million per year.
    While this represents an increase over the Administration's
    budget request for those years, it requires about 15 years to
    clear the existing inventory.
        In the highly competitive world economy, the low level of
    Federal funding to construct navigation channel improvements is
    holding back America and is simply unacceptable.
        It is not only navigation projects that are at issue. Like
    most ports, it is critical that the Port of Baltimore deliver
    sufficient, long-term dredged material placement capacity to
    support maintenance of its 50-foot deep channel in terms of
    both depth and width to capitalize on that anticipated growth
    and maintain our existing business.
        The Mid-Chesapeake Bay Island project, authorized in WRRDA
    2014, will use dredged material from the port's navigation
    channels to restore the James and Barren Islands and recreate a
    critical environmental resource in the Middle Chesapeake Bay.
        Like all WRRDA 2014 projects, this project faces
    deauthorization in calendar year 2021 if it does not receive
    Federal funds for construction by that time. The Mid-Chesapeake
    Bay Island Project is critical because it will provide 45-plus
    years of dredged material placement capacity.
        Federal funding is essential to enable opening the Mid-Bay
    Project by the time it is needed and to avoid deauthorization.
    I thank the Chairman and Ranking Member for their support of
    the Mid-Bay Project in WRRDA 2014 and respectfully ask the
    subcommittee to support report language in the next Water
    Resources Development Act to ensure continued authorization for
    the Project.
        Additionally, Federal funding for Corps dredging has been
    constrained over the last several years and continued
    constraints in funding will negatively impact the port. With
    larger ships calling today, it is imperative that Baltimore's
    harbor and channels be maintained at fully authorized depths
    and widths on a year-round basis to facilitate efficient and
    safe maritime commerce.
        Maryland remains fully committed to working with our
    Federal partners and the private sector to deliver safe,
    efficient and cost effective maritime commerce infrastructure
    in Maryland that contributes to the 26 percent of U.S. GDP and
    23 million American jobs attributable to all ports.
        Thank you again for the opportunity to testify and I would
    be happy to answer any questions.
        [The prepared statement of Mr. Rahn follows:]

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        Senator Inhofe. Thank you, Secretary Rahn.
        Commissioner Goche.

         STATEMENT OF RICK GOCHE, COMMISSIONER, PORT OF BANDON

        Mr. Goche. Thank you, Chairman Inhofe, Ranking Member
    Cardin and the rest of the members. I appreciate the
    opportunity to speak here for small ports in the Pacific
    Northwest, Oregon and across the Country.
        I come from a little town called Bandon, Oregon with a
    population of little over 3,000. I have been a commercial
    fisherman most of my life. Now, I fish primarily for albacore
    tuna.
        My brother and I, when we get ready to go fishing, we
    supply our boat with enough provisions to be at sea for about 2
    weeks at a time. We spend most of that time between 100 and 200
    miles offshore.
        Because our boats are relatively small and relatively slow,
    when weather is forecasted that is beyond our means to deal
    with, we have to go into whatever port is closest to us. When
    the forecast is even worse, we have to sometimes just downwind
    and take whatever is on that trajectory.
        This is where the term ``safe harbor'' comes from because
    when weather is bad, any harbor is better than being at sea.
    From a fisherman's perspective, every port, whether large or
    small, is important.
        We have preferences though. The main reason that we have
    preferences is because of bars. I understand some here may not
    be familiar with the term ``crossing a bar,'' but in the
    Pacific Northwest, understanding that term can be a matter of
    life or death.
        The bar is a term used for where a hump is formed in the
    entrance to the harbor from the downstream sediment that drops
    when it comes up against the swells and tides of the ocean.
    During ebb tides, the river water speeds up and narrows at that
    hump and creates the pressure against the incoming swells.
    Those swells build and steepen and tip over and become
    breakers. That is where the term ``breaking bar'' comes from.
        I did not understand until I started coming back and
    talking with people here that breaking bars are pretty much a
    unique condition relative to the rest of the coast. In the
    Pacific Northwest, every bar is a breaking bar at one time or
    another.
        I could not really understand until I figured out that
    while these small ports budgets' were zeroed out year after
    year, budget after budget, Administration after Administration,
    now I know. So I want to help you understand how important bar
    dredging is in the Pacific Northwest.
        There are a couple of ways to minimize the threat of a
    breaking bar. One is to build jetties that steer the current of
    the river a few degrees off the dominant swell. That has been
    done many, many decades ago all over the Pacific Northwest.
    Because of lack of funding, most of those jetties are in
    disrepair and are becoming more and more dangerous and less and
    less effective.
        Another way to minimize the deadliness of breaking bars is
    to dredge that hump to which I referred. Every year, sediment
    coming downstream comes up against the swell where the river
    broadens out, and drops that sediment caused by the heavy rains
    typical and characterize the Pacific Northwest coast.
        There is one thing that both methods have in common. That
    is funding. The Portland District of the Army Corps of
    Engineers does a great job dredging our navigation channels and
    taking care of things, given the resources.
        When insufficient funding is provided, as is often the case
    for small ports, the bar shallows and breaks and lives are
    lost. The reason lives are lost is because when those breakers
    are happening, a boat transiting that breaking bar comes up
    against a freak wave or a sneaker wave that is bigger and
    faster than the rest of the waves, then the boat basically
    turns into a surfboard, loses control and literally rolls over.
    Many deaths happen because of this.
        In Oregon, there are 15 communities with small ports. In
    every one of those communities the port is the equivalent of an
    anchor business. Everyone sitting at this table understands
    that. The Port of Bandon in 2014 commissioned a study that
    found that $62 million of economic benefit is generated
    annually as a result of our access to sea that is maintained by
    the port dredging.
        Operation and maintenance of our Nation's navigation
    infrastructure is a Federal responsibility. However, chronic
    underfunding for ports large and small is causing our water
    infrastructure to deteriorate impacting safety and reducing
    America's competitiveness.
        I have been encouraged by the recent efforts in Congress to
    ensure that all the moneys paid into the Harbor Maintenance
    Trust Fund every year is used to fund the Corps of Engineers.
    However, we, from small ports, are concerned that this will not
    happen quickly enough. Many of our Nation's ports may have long
    since silted in by the time that money is made available.
        Again, I appreciate this opportunity to speak with you. I
    know it might be hard to understand but if everything you have
    is wrapped up in your boat and your boat feeds your family, you
    go fishing.
        Even when everything is optimal, some of us do not make it
    home. I am just here to ask you to give us the best chance you
    can that we can make it in and home to our families.
        [The prepared statement of Mr. Goche follows:]

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        Senator Inhofe. Thank you, Mr. Goche. That was very
    informational.
        We are going to have 5 minutes of asking questions. If
    there is a desire for a second round, we can do that.
        Let me start with General Semonite. You have been before
    this committee several times. We have been listening to the
    President not just in the Administration now but when he was
    campaigning talking about a very ambitious infrastructure
    program.
        I would like to ask have you had conversations either with
    the President or with members of the Administration concerning
    any of the details of what the plans are from his perspective?
        General Semonite. Yes, sir. I think, first of all, the most
    important thing of those discussions has been a theme all of
    you have already said. That is that many Americans think of
    infrastructure as roads, airfields, and bridges. We need to
    continue to expand that dialog to talk about coastal ports and
    inland waterways.
        We have had several questions from the Administration to my
    staff asking specifically what are some things are significant
    challenges you are faced with on budgetary issues and where
    could there be some of those projects that would be well served
    by additional infrastructure funding.
        The other thing, I think, is the Administration is very
    interested in the potential for private-public partnerships. We
    have been asked a lot of questions about what would be some of
    the studies or cases of how you could see where a public-
    private partnership could take off some of the burden to the
    taxpayers.
        The third area in which we have been asked questions is are
    there some things when it comes to processes or procedures
    where we can un-encumber you and allow you to continue to do
    your job perhaps in a manner that might be a bit more efficient
    and effective.
        Working through the Assistant Secretary of the Army for
    Civil Works, we have provided answers to some of those
    questions. We do not know any outputs right now. We have mainly
    been in a provide mode. We do not know exactly where that is
    going to end up.
        Senator Inhofe. I think it is important that the public
    knows these conversations are taking place. I have had a few
    conversations. Also I know that this committee is going to be a
    very busy committee.
        You might remember in one of your earlier appearances in
    reference to the Tulsa District, we had that rather unpleasant
    experience with a senior employee's statement from the Corps of
    Engineers. The statement was made ``If it were up to me, there
    would be no lake development.'' I want you to get in the record
    right now your response to that statement.
        General Semonite. I think I will say the same thing I said
    last month. The Corps of Engineers certainly sees a very active
    role for private-public partnerships. With respect to our
    recreation facilities and some of those numbers I gave you, we
    would continue to endorse those.
        If there was a member of my staff who felt that is not
    appropriate, then that is on me and I will fix that. I do think
    it is important to clarify though that there are some very
    specific examples where the appropriate procedures by the
    private vendor were not followed. As a result, based on our
    procedures, we had to request the right information, for
    instance, design, permitting, that kind of stuff. There could
    be some frustration with very specific cases that come up.
        Senator Inhofe. That statement does not fit those
    circumstances, however.
        Speaking of that, Mr. Humphreys, in your testimony, you
    talk about the difficulty in navigating the various permitting
    processes with the Corps of Engineers. Are there any examples,
    other than what you used in your opening statement, you would
    like to share with us?
        Mr. Humphreys. Right now, we are going through a process on
    private land that extends into the lake. It is not part of the
    Corps' property but it is affected by a flowage easement, so
    the Corps has the right to flood our private property.
        We are trying to put a waterfront park into this area,
    doing some erosion control and a swim beach and a performance
    lawn. This is the front lawn of Carlton Landing, a place that
    we have been wanting to see built out from the beginning.
        We ran into an issue where the 602 line is the elevation
    where you can develop down to that land and not have to worry
    about flood risk. Below that, we did not realize that there is
    also a 585 line, which is the top of the conservation pool.
        We have been working on this project for several months and
    it had to go through the local office to get to the Tulsa
    office into the regulatory office before we understood that
    just the couple feet that we are wanting to do some impact and
    stabilization of the erosion control of the bank below 585 was
    going to bump us into a general permit adding on four to 6
    months to the process.
        That was something where had we known the lay of the land
    from a regulation standpoint at the very beginning of the
    process, it could have been avoided.
        Senator Inhofe. I think that is good. There is not time to
    give the examples that are out there but it is a bureaucratic
    problem. I think everyone up here knows that and everyone at
    the table down there knows that.
        While time is somewhat limited during the course of these
    questions, anything we can get from the witnesses for the
    record would be very helpful for us to have.
        Senator Cardin.
        Senator Cardin. I want to thank all of our witnesses. I
    found your testimony to be very helpful.
        General Semonite, I certainly support, in the appropriate
    manner, leveraging the best we can between public-private
    partnerships but I also acknowledge the tremendous return we
    get from the public investment. The multiplier effect is as
    high as 22 to 1 on economic benefits and 7 to 1 in revenues
    generated to the U.S. Treasury. It is a good investment.
        I want to get to the point that Secretary Rahn made. That
    is that because of the backlog of projects and the limited
    appropriated moneys, there are delays. Those delays could very
    well cause previously authorized projects not to be funded
    within the time restrictions and could jeopardize those
    projects being done at all.
        I take it what we are facing in Maryland is not untypical
    as to what is happening around the rest of the Country?
        General Semonite. Sir, that is right. I think, though, it
    is more important to be able to make sure we understand the
    national ramifications of some of these projects that do not
    get done, so I will talk about this particular one, Mid Bay
    Island.
        I was the Division Commander in New York and directly
    championed Mid Bay as we went through the civil works review
    process back in 2007 and 2008. There is great potential there.
        The challenge is that if we do not find a place to put
    dredge material, a strategic long-term plan, these harbors and
    ports will continue to have more and more challenges. Baltimore
    is going to run out of land for dredge material somewhere
    around 2027, based on current conditions. I could be off a year
    or two.
        The question is, if we do not find it on the shores of the
    land, and that is hard because land development, condominiums
    and everything else are taking the shores, if we do not do it
    inside the water when the sediment is OK to be able to dump
    inside the water or if we do not build islands like Mid Bay, we
    do not have any other options.
        All the benefits this committee has talked about in the
    economic piece, we have to find some solution to be able to
    solve these issues.
        Senator Cardin. I thank you for that. That is why Congress
    authorized Mid Bay in 2014 because we recognized the lead time
    was necessary. We still had capacity at Poplar Island, we still
    had other capacity for dredge material, but we knew if we did
    not start that ball rolling, we would run out of capacity.
        Mr. Chairman, I remember coming to Congress many years ago
    with battles on where you were going to be able to put dredge
    material. It was politically impossible to find a location in
    the Baltimore region to put dredge material.
        My predecessor, Senator Sarbanes, came up with Poplar
    Island and it became a win-win situation. It is now an
    environmental restoration project of returning wetlands and
    species to the Chesapeake and the location for a significant
    amount of dredge material but that is running near its
    capacity. We still have some time left and that is why Mid Bay.
        Secretary Rahn, can you tell me where we are in regard to
    Mid Bay and how important it is that stay on track from the
    point of view of being authorized for the Army Corps and
    funded?
        Mr. Rahn. Absolutely, Senator. As far as Mid Bay, you have
    mentioned how important it is. The plan right now is that Mid
    Bay would be coming on as Poplar Island, which is incredibly
    popular with the public as this great facility people go to see
    wildlife and enjoy the area, we need another place to go and
    that has been designated as Mid Bay.
        The issue right now is that there had been a DMMP ordered
    by the Corps to study placement of dredge materials. That has
    been going on now I believe since 2011. It should be completed
    hopefully sometime this summer.
        At that point, once we have an approved plan, then it has
    to go to headquarters for approval from the Corps of Engineers
    headquarters. Then it has to be funded. All of those things
    have to occur.
        Right now, we are fairly confident about approval of the
    DMMP plan. The critical pieces are approval from the Corps
    headquarters and then funding, funding, funding and we need to
    start with that and continue with that to make sure the Country
    continues to benefit from the productivity of the Baltimore
    Port.
        Senator Cardin. If it does not stay on schedule and it is
    not ready, we run of capacity, does that we jeopardize the
    ability to have the width and depth in our channels necessary
    for commercial activities?
        Mr. Rahn. It absolutely does. Right now, we are seeing the
    benefits over the last eight or 9 months given the large ships
    that are making their way into the port. We can see that
    continuing and expect it to grow. That cannot occur if the
    channel itself is filling both from depth and width.
        If we have a major storm that comes up the Bay, we will
    lose the capacity of the channel much sooner.
        Senator Cardin. Thank you, Mr. Chairman.
        Senator Inhofe. Senator Ernst.
        Senator Ernst. Thank you, Mr. Chairman.
        Thank you, gentlemen, for appearing here today. General
    Semonite, thank you very much. It is really good to see you
    again.
        Given the topic of today's hearing, I would like to
    continue the conversation we have been having regarding the
    Cedar Rapids Flood Risk Management Project. I would like to
    share with everyone here today, those on the committee, those
    of you on the panel and in the audience that the September 2016
    floods which impacted Cedar Rapids where the Cedar River
    crested at a level second to only the 2008, 500-year flood
    event, caused Cedar Rapids to lose $26 million in sales and
    production due to being essentially shut down for an entire
    week when they were evacuated due to the floods.
        As I mentioned to you before, the city of Cedar Rapids is
    our second largest city. Its success is critical to the entire
    economic well being of the State of Iowa. There are products
    Cedar Rapids produces and manufactures that have domestic and
    global impacts.
        For example, breakfast cereal manufacturers in Cedar Rapids
    produce 13 percent of total U.S. output. Industry in Cedar
    Rapids also processes as much as 19 percent of the global oat
    crop in value added manufacturing per year.
        Wet corn milling in Cedar Rapids accounts for 8 percent of
    U.S. domestic ethanol production. The quantity of corn
    processed each year in Cedar Rapids exceeds the size of the
    domestic corn crop of Canada, the Republic of South Africa or
    the Russian Federation. That is a lot of corn, folks.
        These are all products and goods that at some point or
    another rely on the Corps infrastructure to move.
        With that being said, I did notice a couple of provisions
    that I mentioned here earlier in the omnibus explanatory
    statement for the Corps that I think could apply to a community
    like Cedar Rapids.
        There seems to be new provisions in the Corps work plan
    that requires you to provide Congress with more descriptions of
    the rating systems used to evaluate projects and explain why
    certain projects were considered as being less competitive. I
    also saw the provision that said ``Administration budget matrix
    shall not be a reason to disqualify a study or project from
    being funded.'' We think that is a great step forward.
        Can I take this as a sign that the Corps and the
    Administration are looking to improve its system that
    calculates the economic benefits of flood control projects?
    Will you commit to continuing to work to make sure we are able
    to move the Cedar Rapids Flood Mitigation Project forward in
    Fiscal Year 2018?
        General Semonite. Senator, thank you for that question. You
    and I have talked several times on this. We are in awe of the
    people of Cedar Rapids who were very heroic back in that flood
    fighting. That is not a position that we should put Americans
    in, to have to be able to fight for their lives.
        On the other hand, this is a project which, unfortunately,
    does not rise high when it comes to the current method for
    racking and stacking projects with respect to the benefit cost
    ratio. We are committed to doing everything we can to continue
    to champion that project. The Corps will certainly do that. I
    do not know exactly how it will fall out in the rest of that
    process.
        Senator Ernst. We do have to continue pushing because as I
    went through all these different examples of what passes
    through Cedar Rapids on a daily basis, the impact to the
    economics of the State is pretty clear.
        When you are comparing the cost of the property in Iowa, it
    is much lower than the cost of a property on the coastline. Of
    course you have great big, beautiful, million dollar homes but
    that does not mean to a person living in Iowa that their home
    is worth any less to them. It is just based on what everyone
    else believes is the value of the home. We do have to consider
    that.
        As a reminder, the assistance that Cedar Rapids needs from
    the Corps is just 3 percent of the cost of damages that it went
    through in 2008. We need to continue pushing this issue. I look
    forward to more conversations with you in the future and a way
    forward for the people of Cedar Rapids.
        Thank you.
        Senator Inhofe. Thank you, Senator Ernst.
        Senator Merkley.
        Senator Merkley. Thank you, Mr. Chairman.
        I wanted to focus for a moment on the Harbor Maintenance
    Trust Fund. In 2016, the amount spent was 80 percent of the
    incoming receipts. In 2017, that fell to 55 percent of the
    receipts.
        My question is for you, General. If we had spent all of the
    receipts from 2017, do you have enough infrastructure projects,
    meritorious infrastructure projects for those funds?
        General Semonite. Senator, there is clearly a very long
    list of requirements. We definitely have most of the time, more
    requirements than funds available.
        Senator Merkley. The question I want to raise is these
    receipts that go into the Harbor Maintenance Trust Fund are
    from the industry itself, from the shipping. Given the State of
    our jetties, given the State of our dredging, given the State
    of our locks, shouldn't we spend every dollar that comes in on
    maintenance of our water infrastructure?
        General Semonite. Senator, I think obviously a lot of
    different considerations go into the use of the Harbor
    Maintenance Trust Fund. I would continue to say that we will
    champion full use of that where possible, but as far as exactly
    how that is expended, there are obviously a lot of players
    there.
        Senator Merkley. Thank you, General. It was appropriately
    diplomatically stated. I appreciate the point that yes, there
    are plenty of infrastructure projects that need to be worked
    on.
        Mr. Lyons, I believe you said in your testimony that under-
    investment in seaport channels and harbors and under-funding
    the Corps' civil works program results in inefficient channels,
    poorly maintained harbors, increasing costs for port users,
    reducing U.S. global competitiveness, exacerbating maintenance,
    dredging backlog, all of which adversely impact the U.S. tax
    base and job market.
        Mr. Lyons, would you support using all of the Harbor
    Maintenance Trust Funds to actually sustain, maintain and
    improve the infrastructure?
        Mr. Lyons. Yes, Senator, I would. I believe, as the General
    said, there are plenty of projects out there. There are a lot
    of projects that are marginally maintained or not even
    maintained to their full authorized depths.
        We have especially big problems in the Great Lakes ports.
    Our harbor requires maintenance because we are fed by a river
    and river silt. Some years, we have much more material to move
    than in others and there are years that we are very marginally
    able to take care of it.
        Sometimes we have some delays where we have to experience a
    narrow channel where we have to go to one-way traffic because
    of the sides of the channel have filled up and they do not have
    sufficient funds to get to it. Yes, I would absolutely support
    that.
        Senator Merkley. Thank you.
        Mr. Goche, when you are looking at the ports on the Oregon
    coast and we skip a year of dredging, in some of these ports
    that have rivers feeding them and silt coming down the river,
    is even skipping a single year sometimes problematic for the
    commerce and the safety of that community?
        Mr. Goche. Absolutely, Senator. A case in point, on the
    Rogue River, they missed a year of dredging and it was a
    particularly wet year that year. Now it is going to cost way
    more than 2 years' worth of dredging to get that caught up
    because it is silted in so badly that now they cannot go in
    with a regular Corps dredge. They are going to have to farm out
    the job with a different kind of dredge that uses a pipe to
    even get the Corps dredge in.
        Senator Merkley. This is like an extra $800,000, I believe
    or something like that, just to get back to where you can do
    the normal project?
        Mr. Goche. Correct.
        Senator Merkley. Sometimes you have a situation where not
    only is it boats coming in, but also the ability of the Coast
    Guard to get out to do recue?
        Mr. Goche. Yes, and that is the case once again on the
    Rogue because I do not think they are even going to be able to
    get the Coast Guard to come in to help on this bad breaking bar
    because the Coast Guard does not have enough depth to transit
    it.
        Senator Merkley. You can easily find uses important to the
    economy and the safety of Oregon's coastal communities for
    spending some of the unspent Harbor Maintenance Trust Fund?
        Mr. Goche. You bet.
        Senator Merkley. Thank you so much for coming out from
    Oregon to share this perspective. I really do appreciate the
    small port set aside, the 10 percent set aside, that has been
    so important to Oregon's coastal economy. It is something we
    need to keep doing for all of our smaller ports around the
    Country.
        Senator Inhofe. Thank you, Senator Merkley.
        Senator Shelby.
        Senator Shelby. Thank you, Mr. Chairman.
        General Semonite, you had a lot of experience with the
    Corps before you got to your present position. We have been
    talking about the Panama Canal and its impact on shipping, its
    relevance to deeper ports in the Gulf, and so forth. Tell us
    how important the modernization of the Panama Canal is and what
    impact it will have or should have on all of our ports,
    especially the Gulf ports.
        General Semonite. Senator, I was there at the opening of
    the Panama Canal; I saw the first ship come through. I was
    amazed at the amount of volume that came through. As several of
    you have said, the economic impact on both the economy and the
    GDP, I think that is off the table on how much impact that will
    have.
        Senator Shelby. Would call it a game changer as far as
    shipping?
        General Semonite. I think it is a game changer, yes, sir.
        Senator Shelby. A game changer now and into the future.
        General Semonite. If you do not then have the ability to
    receive those, not every single port will take the big ships
    without a doubt, but if you do not have the second and third
    effect and be able to take the roll on down, then that will
    limit us, I think, in our ability to be able to continue to
    expand internationally.
        Senator Shelby. It will hurt our trade overall, will it
    not?
        General Semonite. It will certainly have an impact, sir.
        Senator Shelby. If a port is say 45 feet or 46 feet, 45
    feet, and some of the ships need 50 feet or close to it, if
    they cannot put a full load in there, it is not efficient, is
    it?
        General Semonite. Certainly not, Senator.
        Senator Shelby. It is like flying a freighter airplane and
    because of the runway or the distance and so forth, you cannot
    deal with it?
        General Semonite. That is correct.
        Senator Shelby. It is a game changer, is it not?
        General Semonite. It definitely is, and if a port is not of
    the right size, that means that particular part of the Country
    that cannot receive that boat or ship, industry is going to go
    where they can find the best investment.
        Senator Shelby. Mr. Lyons, the Port of Mobile, as I
    understand it, is 45 feet, is that right?
        Mr. Lyons. That is correct, it is 45 now.
        Senator Shelby. It has been authorized to go to 55 feet by
    law?
        Mr. Lyons. Yes. It was authorized in 1986 water bill.
        Senator Shelby. It also needs to be widened, is that right,
    where two ships can move and move around?
        Mr. Lyons. Yes. Our current channel is only 400 feet wide.
    When we have ships that exceed 140 foot beam, we are restricted
    to one-way traffic. As I mentioned in my remarks, we have a lot
    of wide-bodied tankers coming in that are 150 or 160 feet wide.
    We have post-Panamax container ships in, so we are one-way
    traffic there.
        Ships have to wait. Ships are expensive and that is costing
    money. That eventually affects the cost structure of these
    ships when they have to build in delays. They occur multiple
    times every week.
        Senator Shelby. You mentioned your container freight has
    gone up tremendously, has it not, your business?
        Mr. Lyons. Yes, Senator. We are a relatively new container
    port. We only opened our container terminal in 2008. Prior to
    that, we had been a bulk port and handled forest products,
    coal, steel and products like that.
        Manufacturing in the southeast has significantly changed.
    Retail distribution is beginning to realize they cannot be
    totally reliant upon the West and East Coasts to efficiently
    move at all times, so they are looking for alternate gateways.
        This is why Wal-Mart selected Mobile for this 2.6 million
    square foot international distribution center, one of six big
    ones that Wal-Mart has in the Country. There are alternate
    gateways where we have the bigger ships coming and it is
    important.
        Senator Shelby. A lot more container freight?
        Mr. Lyons. A lot more, our container terminal grew 19
    percent last year.
        Senator Shelby. I wish you had a big map to share with the
    committee and the people of where Mobile is located
    geographically, where the Panama Canal is and the proximity, as
    the crow flies. Going through the Panama Canal, you look right
    up the Gulf. You have a straight shot just about to the Port of
    Mobile, do you not?
        Mr. Lyons. It is a straight shot and we have grown. Like I
    said, we are an infant, if you will, container port but we now
    have three ships a week every week, a fixed day, that come
    through the Panama Canal. One of those shipping lines is going
    to the larger post-Panamax ships this year.
        Next year, the other two lines will go to post-Panamax. I
    feel confident that next year, we will add a fourth line coming
    from Asia. The Asian trade and Panama is very important to our
    port and our Country.
        Senator Shelby. General, since you know a lot about Panama
    and all the Corps and the ports, can you share with us your
    vision of where the Panama Canal is, where it comes through the
    Nation of Panama, and where it lines up as far as the Port of
    Mobile is concerned, as the crow flies, a direct line?
        General Semonite. Senator, there is clearly a proximity
    issue that Mobile has that some other places do not have the
    advantage of. Just so you know, that GRR you mentioned, we are
    right on schedule now to have that done by November 2019. We
    are putting about $8 million into that. We do not see any
    significant problems with getting that done.
        If the Congress decides to have that on priority, that will
    be well postured to be able to be deepened.
        Senator Shelby. A 50 to 55 foot channel or wider channel
    would be a game changer for the Port Mobile too, would it not?
        General Semonite. It would, sir. Again, the actual depth,
    we do not know that. That will be the result of the study so I
    will not commit on what the depth would be.
        Senator Shelby. We know. Thank you very much.
        Thank you, Mr. Chairman.
        Senator Inhofe. Thank you, Senator Shelby.
        Senator Duckworth.
        Senator Duckworth. Thank you, Mr. Chairman, for convening
    today's hearing.
        I want to thank our witnesses for participating in this
    very important conversation.
        General Semonite, as you know, our inland waterway system
    is a critically important component of our network, as we have
    been discussing and a barometer for gauging the health of the
    Midwest region's environmental and native species.
        The rivers surrounding and traversing Illinois provide
    enormous economic and recreational benefits. I believe Congress
    must prioritize the effective management and protection of
    these resources, the river system. Would you agree?
        General Semonite. Yes, Senator, I would.
        Senator Duckworth. As you know, the McCook Reservoir is
    approximately 91 percent complete. It prevents over $114
    million in annual damages to the Chicago land area and carries
    a benefit to cost ratio of 2.96, a very high score for an Army
    Corps project.
        Will you pledge that the Corps will work closely with my
    office, Senator Durbin and the Illinois delegation to complete
    the project on schedule, including Fiscal Year 2017 funding, so
    we can avoid the type of damages we have suffered over the last
    three disaster declarations?
        General Semonite. Senator, we seek great merit in this.
    This is a life safety issue. This is a flood risk management
    project. Clearly, the majority of that first half is all done
    and works very, very well. We will continue to champion that
    reservoir and whatever we can to get appropriate funding.
        Senator Duckworth. Thank you.
        I recognize there may be other agencies pressuring the
    Corps to abandon this critical project as it approaches the
    finish line. I just want to make it clear that it is
    unacceptable to leave my constituents at risk, especially when
    we are so close to finishing. Stage II of the reservoir started
    securing funding over 10 years ago and we are just asking to
    finish the job.
        General Semonite. Senator, we do not see any significant
    challenges with other agencies. We feel very firm that is a
    very smart project to finish.
        Senator Duckworth. That is wonderful. Good news. Thank you.
        General, when it comes to combating invasive species
    threatening the Great Lakes, Illinois may face the most
    daunting challenge in the need to effectively stop and control
    the Asian Carp without significantly disrupting inland waterway
    operations and harming our economy. It is a real balancing act.
        I believe we can achieve these two objectives. I was very
    interested in reviewing the findings of the Brandon Road Lock
    and Dam Study, along with the subsequent public comments and
    alternatives to inform our efforts to develop an effective
    solution.
        It is why I and many other Great Lakes stakeholders are
    deeply disappointed and surprised by the Army Corps' decision
    to indefinitely delay the release of this critical plan, a
    reversal with not much transparency or explanation.
        It was widely reported, in fact, that this decision was the
    result of outside pressure from the White House. Will you
    explain why the report was delayed and provide us with an
    updated timeline for its release?
        General Semonite. Senator, you know that report was
    completed by us, was prepared to go out for public comment. I
    do not know the details of the cause of our being put on hold
    for that report. We are hold until we are advised to go ahead
    and release that report. That is something where we are
    following guidance.
        Senator Duckworth. Where is that guidance coming from?
        General Semonite. All I know is it is coming from my higher
    headquarters which is the Assistant Secretary of the Army for
    Civil Works out of the Department of Army. I cannot elaborate
    as to where it would be above that. I just do not know.
        Senator Duckworth. OK. I need to reach out to the Assistant
    Secretary for the Army.
        General Semonite. I would think that would be the best
    answer, ma'am.
        Senator Duckworth. I do think it is very important to move
    this forward so we can have some sort of plan in place.
        Earlier this year, I joined several of my Great Lakes
    colleagues in both the House and Senate to highlight our
    concerns about the Corps' economic re-evaluation of the Soo
    Locks Project.
        Rather than calculating the transportation rate savings for
    this project based on traditional methods used by the Corps for
    other lock projects, it was our understanding that the Corps
    decided to use unique alternative modes of transportation never
    before used by the Corps on which to base its conclusions.
        I ask unanimous consent that the February 21 letter be
    entered in the record, Mr. Chairman.
        Senator Inhofe. Without objection.
        [The referenced information follows:]

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        Senator Duckworth. The February 21 letter asked the Corps
    to calculate the Soo Locks Project's economic benefits in a
    manner consistent with other Corps lock project evaluations.
    Will you commit to us today that the Corps will do that and you
    will finish the re-evaluation within the Corps' 2-year
    schedule?
        General Semonite. Senator, I do not know exactly the
    particulars of that one and I am not prepared to answer that
    today. Soo Locks is very important to this Nation. We see
    national security issues in there. It is an old lock. We have
    to get Soo Lock prepared.
        I do not know exactly the details you are talking about. I
    have to get back with you.
        Senator Duckworth. OK, we will follow with you on that.
    Thank you.
        I yield back, Mr. Chairman.
        Senator Inhofe. Thank you, Senator Duckworth.
        Senator Sullivan.
        Senator Sullivan. Thank you, Mr. Chairman.
        I really appreciate the testimony today, gentlemen. It is
    very important.
        Commissioner Goche, as a Senator who represents thousands
    and thousands of fishermen and communities with small ports, I
    really appreciate your particularly compelling testimony.
        I want to shift the focus a little bit more north to where
    I am from. General, we have a lot of interest in the Arctic
    right now. I think a lot of people are waking up to that. As a
    matter of fact, the Arctic Council is having a ministerial in
    Fairbanks, Alaska starting tomorrow, 2 days in Alaska. All
    foreign ministers of the Arctic nations are going to be up
    there.
        You may have seen in the NDAA a requirement for the
    Secretary of Defense and the Secretary of Homeland Security to
    designate a strategic Arctic court given our increasing
    interest in the Arctic in shipping traffic, natural resources,
    search and rescue and protecting the environment. There is a
    lot going on up there.
        I want to talk to you about two ports. I know we are
    looking at all kinds of ports. First is the Port of Nome. As
    you probably know, the Corps has over a 100-year history in
    Nome, Alaska.
        There is a focus on the deepwater port draft study and
    there has been some back and forth after Shell left Alaska and
    the oil and gas exploration. There were two additional WRDA
    provisions just this past bill, the WIIN Act, that came into
    law in December. Those were actually designed to help get the
    Corps focused again on Nome.
        Can you commit to having Nome as part of your work plan
    moving forward again on the deep draft port study and work that
    was ongoing until we had the hiccup of some of those oil and
    gas issues?
        General Semonite. Senator Sullivan, thanks for the
    question.
        We are actively working Nome right now. The study was put
    on hold pending coordination with DOD and Homeland Security
    based on WRDA 16. The benefit cost ratio is below 1 percent. I
    think that is why there was a request.
        Senator Sullivan. But there are also provisions in the WRDA
    bill that essentially said, you have entire other areas to look
    at. Particularly, for example, in the law now, Nome services 54
    different communities throughout western Alaska and the Nome
    area. That gives you authority to kind of take a hard look?
        General Semonite. Yes, sir. We have sent out letters to
    both the Department of DoD, Navy and Homeland Security to be
    able to make sure that we understand where their potential use
    might be. We are waiting for those responses.
        I can certainly get with you offline and tell you what we
    hear from them to be able to see if, in fact, there is an
    additional reason from both of them to be able to expand the
    Port of Nome.
        Senator Sullivan. I would like to get offline with you
    because there are two specific provisions in the WRDA bill,
    just signed into law, that are very focused on that and are
    intended. I know we worked with your staff on the language to
    get the Corps moving again.
        If there are delays, I need to understand why there are
    delays when the law has been changed to actually get the Corps
    to move out on this issue.
        General Semonite. We are working implementation guidance to
    be able to see. I think the best thing is I come and see you,
    Senator, and I will lay this out. I am not exactly aware of the
    two extra provisions you are talking about right now.
        The information I have is that we are waiting for responses
    from the two departments as to what would be a strategic
    rationale to be able to have Nome not necessarily what you are
    talking about.
        Senator Sullivan. The NDAA is a different issue?
        General Semonite. Yes, sir. Let me come back and I will get
    with you. We will lay this out and walk our way through this.
        Senator Sullivan. Good. Thank you.
        Let me ask about another potential port in the area. What
    is the Corps' view of the effectiveness of possibly using
    public-private partnerships for the development of Port Spencer
    which is actually also in the area?
        General Semonite. Senator, I do not know on Spencer. We
    are, again, very interested in anything with a P-3. The
    challenge is, how do we put together the right package to be
    able to continue to make it through the system. If we get
    together, I will certainly lay out Spencer for you as well.
        Senator Sullivan. Great. Section 119 of the WIIN Act amends
    the law related to the territorial partial cost share waiver to
    add federally recognized Indian tribes as entities eligible for
    a limited waiver of local cost sharing for Army Corps studies
    and projects.
        Can you give me a sense of the Corps' timing on that new
    provision and how you are looking at it? The Alaska District
    has a lot of interest, as you know, on that provision. We would
    welcome your engagement.
        General Semonite. Senator, we support this as well. This is
    for a cost share of the first $450,000, mainly for Native
    American tribes. This is something we will do. We are writing
    through exactly what the implementation guidance is to be able
    to say here is how you would qualify for that.
        However, those tribes that do not have enough money to be
    able to come into a study, we do not think they should be
    disadvantaged. We support that, we just have to get the details
    together so we can put it on the street and people know how to
    apply for that.
        Senator Sullivan. Great. Thank you.
        Thank you, Mr. Chairman.
        Senator Inhofe. Thank you, Senator Sullivan.
        Senator Cardin and I would like to make a few more comments
    and maybe even have another round in case some members come who
    have not yet been here.
        First of all, General Semonite, one of the reasons that I
    brought this up and wanted to get it in the record in terms of
    the lake development is to make sure everyone understands this
    is legitimate. In fact, I remember the first one I think was in
    Oklahoma and Georgia immediately followed that. The Corps
    actually got into that business. That has been a long time ago.
        I wanted to mention another thing too that really has
    concerned me for so long. That is the Montgomery Lock and Dam.
    As you come down the Mississippi River, you are familiar with
    it and I am sure some of the others are not, you actually have
    two rivers. Well, it actually was called the Three River
    Project.
        If you take the distance from the Mississippi all the way
    across Arkansas and through Oklahoma, that is 445 miles that
    would be completely done away with and useless if we cannot
    ultimately find a solution to Montgomery. Are we waiting now
    for what they refer to as the Three River study?
        General Semonite. Senator, I am going to have to get back
    with you on that. There are several projects that we are
    looking to continue to champion, but I do not know exactly
    where we are on that particular one.
        Senator Inhofe. Senator Boozman and I do not need to take
    the time of the entire panel but we are very much interested in
    that. That has been a problem, Montgomery buoy to lock and dam
    and the depth issue, for a long, long time.
        Why don't we set up something and get the two of us
    together with you to see if we cannot come to some
    determination? Does that sound reasonable?
        General Semonite. It sounds great, sir.
        Senator Inhofe. Mr. Humphreys, in the opening statement, we
    talked about development like your development and what it
    means to surrounding communities, what it means to the economy,
    what benefits are there that people might not think about,
    because I know there are great benefits. Will you share your
    thoughts on that?
        Mr. Humphreys. I would be happy to.
        When we look at a project like Carlton Landing, we are in a
    rural area of Oklahoma that has seen economy shift to the urban
    areas. You have great natural beauty but you do not have a lot
    of drivers.
        First and foremost, we provide jobs in the construction
    industry. Construction activity alone will typically add about
    125 to 150 trades onsite in Carlton Landing, with the same
    number at any given time working offsite in sales, logistics
    and support.
        In terms of economic impact over the longer term, we expect
    to see over $2 billion of private investment in Carlton Landing
    as the master plan is built out. We expect Carlton Landing to
    be one of the more important economic development projects for
    Lake Eufaula, for southeast Oklahoma and also the growth of the
    Oklahoma tourism industry.
        I am happy to serve on our State's tourism commission. We
    think that long term, Carlton Landing could help bring dollars
    from outside Oklahoma, across State lines back into the
    Oklahoma tourism business.
        Since our project is a new community, it is not just a
    subdivision, we also enhance the quality of life of people who
    live in that area. We have the State's first rural charter
    school. About 80 percent of the kids attending our charter
    school in Carlton Landing come from outside of Carlton Landing,
    some driving as far as 30 minutes away.
        These are kids who, some come from strong families but some
    come from situations where their parents are incarcerated or
    they are in the foster care system. We are bringing them in and
    giving them a new opportunity to look and see life with new
    options. We are excited about that.
        All this together, we see development activity and
    community building as something that has tangible and
    intangible benefits, monetary and a lot of benefit to folks'
    quality of life that you just cannot put a number to.
        Senator Inhofe. Would you say a very similar situation in
    terms of benefits is true up there with your neighboring
    development up in Sky Tube that has really done some great
    things?
        Mr. Humphreys. You see the growth of the property values
    from the beginning of the public-private partnership to what
    they have realized currently. You have seen great growth where
    private investment is coming in.
        As I said in my earlier comments, we just need to set the
    table. There are some policy procedures that need to take place
    that help developers understand the regulatory landscape. I had
    an opportunity to speak with General Semonite. We will give our
    recommendations on things they can do with the existing
    regulations in educating and laying out a game plan so that
    people understand what the process looks like to work with the
    Corps.
        Senator Inhofe. You have a successful operation there. You
    have spread a lot of goodwill and helped a lot of people.
        Mr. Humphreys. Thank you, sir.
        Senator Inhofe. I notice we stalled just long enough to
    keep us open until Senator Markey got here. We will recognize
    him at this time.
        Senator Markey. Thank you, Mr. Chairman.
        I arrive, first, to praise Caesar. I thank you for the WRDA
    bill from 2014 because in that bill there was $216 million for
    the Boston Harbor deepening project so that we could
    accommodate the new super ships coming through the Panama
    Canal.
        I thank you for last year's WRDA bill because then we added
    another $16 million to deal with additional complicating, but
    necessary, features that had to be built in. We thank you for
    both of those. That is a perfect example of the way the
    committee operated under your leadership on all of those
    issues. There is no construction yet, though, because there is
    no actual money yet up there.
        General, can I get your commitment that you will work with
    us to try to telescope the timeframe that it is going to take
    in order for us to get the funding for that critically,
    essential project for Boston because without it, we are going
    to be a port that is not able to fully benefit from this
    change?
        General Semonite. Senator Markey, thanks for the question.
        I was the Division Commander in New York when we started
    that project back in 2007. There is a lot of value in that
    project.
        Clearly, the 2017 budget is on the street but the 2017 work
    plan is not. The 2018 budget will come out in a couple of weeks
    so it is premature for me to talk about where that is. Congress
    has given us new starts that we can allocate that. I think as
    soon as we see where that plays out in the next couple weeks,
    we will certainly be able to advise you on Boston Harbor.
        It is one of those projects that we certainly see merit in
    doing. The question is going to be where does it fall on the
    actual prioritized list of what is allocated money.
        Senator Markey. You know it well, though, that project?
        General Semonite. I know that project well, sir.
        Senator Markey. I think that is going to be very helpful
    going online so I thank you for that.
        Secretary Rahn, do we need more direct Federal spending to
    ensure America's ports can remain competitive in this new era?
        Mr. Rahn. The answer is obviously yes. We have to. We have
    neglected infrastructure across the board for decades. The
    answer is that yes, we have to invest more. Frankly, I am
    confused as to why we have not since infrastructure has always
    seemed to have been one of those things that both parties could
    agree to and that was always critical to our national well
    being.
        The answer is yes, we need additional Federal funds. Even
    just in Maryland, we have substantial needs that go well beyond
    the Mid Bay Project. As a Country that is so integrated into
    the global economy, we need all of these assets that allow us
    to link in.
        In Maryland, we are very much linked into that global
    economy. We have needs for the next phase of construction at
    our Poplar Island project; we have needs at our C&D Canal.
    There is so much there that we as a State do not have the
    capacity to address and frankly, require Federal investment to
    make that happen.
        Senator Markey. Thank you.
        I thank everyone for all their great work in this area.
        It is the obligation of the members of the Senate to assist
    the communities which we represent who are adversely affected
    by sea level rise and climate change to adapt to the new
    reality.
        That is why I have supported environmentally responsible
    shoreline protection projects where sand is pumped onto beaches
    to protect against storm surge and coastal erosion. In fact,
    the Army Corps was so great on Revere Beach and Winthrop in
    helping us to solve those problems after the hurricane
    snowstorm.
        The Town of Sandwich, Massachusetts attempted to use sand
    from the Federal Cape Code Canal that otherwise would be dumped
    into the ocean to protect their town. Federal requirements
    became a major obstacle.
        The Army Corps required the homeowners to provide easements
    ceding away their coastal property line forever, even though
    the sand from this beneficial use project would only remain on
    the beach for 5 years. Ultimately, the town was unable to use
    Federal funding for this essential shoreline protection
    project.
        Can I ask, General, do you believe it is reasonable for the
    Army Corps to require property owners to provide easements in
    perpetuity for beneficial use projects if the sand is only
    going to last for a few years?
        Wouldn't it be more appropriate for the easement to last as
    long as that sand remains on the beach just as kind of a
    practical way of dealing with the issue?
        General Semonite. Senator, two things. I do not know the
    details of Sandwich. I am very aware of the sand easement
    issue. All throughout Sandy and in about seven different
    States, I am not sure I have ever been asked the question of
    how long should an easement last and it should be correlated
    back to the sand. We can certainly have that dialog.
        I think we are currently following the policy on which we
    have been very consistent that, if in fact, Federal dollars are
    going to put sand on a beach, normally those landowners have to
    be able to provide access for the local people to be able to
    get to the beach.
        Senator Markey. I would like to be able to work with the
    Army Corps on striking a balance, especially if that sand is,
    once again, just going to be washed away.
        General Semonite. We are always looking at options, sir.
        Senator Markey. Thank you, General.
        Thank you, Mr. Chairman.
        Senator Inhofe. Thank you, Senator Markey.
        Senator Boozman.
        Senator Boozman. Thank you, Mr. Chairman. Thank you and the
    Ranking Member for holding this hearing. This is really an
    important thing as we go forward in trying to figure out some
    of our infrastructure problems.
        General, I was just visiting with Senator Inhofe and heard
    the comment about the Three Rivers situation that we have in
    Arkansas where the White River hits the Mississippi. I just
    want to reemphasize how important that project is.
        That is one of those things that it is not an ``if,'' it is
    ``when'' it is going to fail, probably up to a year as far as
    shutting down the Arkansas River which would be a real problem
    for Arkansas and Oklahoma and really, the whole Nation in the
    sense of being able to move goods and services.
        General Semonite. Can I give you a quick update there? I
    was not fast enough when Senator Inhofe asked me, but
    basically, on the Three Rivers Study, we did complete the
    alternatives milestone meeting in December 2015. The definitive
    plan was completed in 2017.
        Right now, we have released the draft report for policy,
    public and agency technical review. That was last April. Right
    now, we are looking at a milestone decision schedule for July
    2017.
        We are working our way through this. We think a Civil Works
    Review Board is scheduled right now for March 2018 and a
    Chief's report in June 2018. That is the current milestone.
    That is pretty aggressive but we do think there is great merit.
    We want to continue to stay on timeline.
        This has continued to get funding in 2015, 2016 and 2017.
    Obviously, it is premature to talk about 2018 but we continue
    to see a lot of value in that.
        Senator Boozman. Good. We appreciate that and you pushing
    forward. Like I said, that is a matter of if and not when. In
    Oklahoma and Arkansas, we are experiencing these 500-year
    floods about every 2 years. They really are playing havoc.
        The waterways have held up fairly well. This last one has
    really caused a lot of damage but we are in the process of
    working through that with you.
        Apart from that, there is a lot of concern with taxpayers
    and Congress about the inefficiency in the delivery of our
    infrastructure investments. Projects that should reasonably be
    completed in a few years typically last decades, delaying
    public benefits and exponentially increasing cost.
        How, if at all, can public-private partnerships help
    accelerate the delivery and create better value as far as the
    infrastructure? Do you have any ideas in the sense would
    public-private partnerships help with that situation?
        General Semonite. Senator, it definitely would. I will just
    give you a quick data point here.
        It really allows all of the funding upfront as opposed to
    dragging it over whatever time we would be able to afford it
    through the Federal Government; we are able to see that upfront
    investment.
        I will just give you the numbers I use, these are very
    simple numbers. The one Federal P-3 study that we have been
    able to push through, which is Fargo-Moorehead, if you do it
    the regular way, it would take us 16 years. The way we are
    doing it up there is 6-1/2 years.
        Senator Boozman. Since you say that, it is probably 20.
        General Semonite. It could be but I just want to give you a
    data point.
        Senator Boozman. Sixteen years?
        General Semonite. Sixteen versus 6-1/2. The Federal share,
    the regular way, would have been $850 million. The P-3 way is
    $450 million. The other big thing, the regular way would have
    been up to probably 28 contracts. The P-3 way is 11. Just
    remember those numbers. You are probably half of what the
    normal process is.
        The challenge we have is we have to get the whole team able
    to be synchronized as to how can we then enable P-3? There are
    a lot of people who do big hand waves to say P-3 has got merit
    but we have to be able to make sure, through all the different
    maize of the approval process, a P-3 is able to see the light
    of day. We are having some challenges in how we can synchronize
    that better.
        Senator Boozman. That would be great news. I know Senator
    Inhofe and Senator Cardin on this subcommittee are going to be
    working hard in that regard. We will do the same thing on the
    Water Subcommittee really looking forward to seeing how we can
    make that example happen all over the Country versus what we
    are experiencing right now.
        Thank you, Mr. Chairman.
        Senator Inhofe. Thank you, Senator Boozman.
        Senator Cardin.
        Senator Cardin. Again, let me thank our witnesses.
        I think this hearing points out the importance for us,
    General, to take a look earlier in the process on the next WRDA
    bill. Senator Markey is correct, in 2014, we passed the Water
    Resources Development bill which I think it was 7 years earlier
    before we passed the last one. We made a commitment to pass
    these bills every 2 years. We are barely able to do that in
    2016. It was one of the last bills passed by the Congress.
        It was a challenge because we had to deal with the rules on
    how we direct spending and it was not as easy to figure out all
    the different nuances. One thing was clear. We are going to see
    some different rules coming down from this Administration.
        I think it is going to be important for us, Mr. Chairman,
    to try to figure this out as a Congress earlier rather than
    later which may require some legislative authorization in order
    to make sure projects like Mid Bay are not inadvertently
    jeopardized because of the budgetary scheduling that is being
    followed on these projects.
        I would just urge us to take an earlier look at the way we
    are going to authorize the next WRDA bill so that we can make
    sure we get it done next year. I expect it will be the next
    year; it is not going to be this year, but if we could pay a
    little earlier attention.
        Secretary Rahn, I think you were correct to point out that
    although in Maryland, we concentrated on Mid Bay, there are
    many other projects in Maryland and many other projects around
    the Nation. I am glad you mentioned the C&O, the C&D and we
    also have other projects. Poplar Island is still not finished.
    We still need resources there.
        General, I could mention our efforts to make sure we
    protect our coastlines and beach re-nourishments and hurricane
    protection. These are all programs that will require our
    attention as we look at ways to make sure we can modernize our
    infrastructure and meet the current challenges.
        We know, under the best of circumstances, the resources are
    going to be very, very difficult on the public side. We know
    that. Even if we do well, it is going to be a challenge. It is
    right to look for ways we can leverage and create more
    opportunities that we all agree are needed.
        I think this hearing has been very helpful. I want to thank
    all the witnesses for your testimony.
        Senator Inhofe. I do too. I thank you, Senator Cardin, for
    your contribution here and your partnership in these efforts.
    We have been together doing this for a long time with some
    success.
        I thank all of the witnesses for coming, particularly Grant
    Humphreys. I have followed this development. I use this as kind
    of a model of what can happen elsewhere. I commented a minute
    ago about a rarely known fact that we have more miles of
    freshwater shoreline in our State of Oklahoma than any of the
    50 States. We have a lot of beauty that goes with that. You
    have made a great contribution there.
        I thank all of the witnesses very much.
        We are adjourned.
        [Whereupon, at 4:19 p.m., the subcommittee was adjourned.]
        [Additional material submitted for the record follows.]

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