    [Senate Hearing 115-693]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 115-693

                         HEARING ON PENDING NOMINATIONS

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

                                    HEARING

                                   BEFORE THE

                           COMMITTEE ON AGRICULTURE,
                            NUTRITION, AND FORESTRY

                              UNITED STATES SENATE

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION
                                   __________

                                 JULY 24, 2018
                                   __________

                           Printed for the use of the
               Committee on Agriculture, Nutrition, and Forestry

                      [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

           Available via the World Wide Web: http://www.govinfo.gov/

                                  ___________

                        U.S. GOVERNMENT PUBLISHING OFFICE

    36-552 PDF                 WASHINGTON : 2019

               COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

                         PAT ROBERTS, Kansas, Chairman
    MITCH McCONNELL, Kentucky            DEBBIE STABENOW, Michigan
    JOHN BOOZMAN, Arkansas               PATRICK J. LEAHY, Vermont
    JOHN HOEVEN, North Dakota            SHERROD BROWN, Ohio
    JONI ERNST, Iowa                     AMY KLOBUCHAR, Minnesota
    CHARLES E. GRASSLEY, Iowa            MICHAEL E. BENNET, Colorado
    JOHN THUNE, South Dakota             KIRSTEN E. GILLIBRAND, New York
    STEVE DAINES, Montana                JOE DONNELLY, Indiana
    DAVID PERDUE, Georgia                HEIDI HEITKAMP, North Dakota
    DEB FISCHER, Nebraska                ROBERT P. CASEY, Jr., Pennsylvania
    CINDY HYDE-SMITH, Mississippi        TINA SMITH, Minnesota

                 James A. Glueck, Jr., Majority Staff Director
                    DaNita M. Murray, Majority Chief Counsel
                        Jessica L. Williams, Chief Clerk
                   Joseph A. Shultz, Minority Staff Director
                   Mary Beth Schultz, Minority Chief Counsel

                                C O N T E N T S

                                  ----------

                             Tuesday, July 24, 2018

                                                                       Page

    Hearing(s):

    Hearing on Pending Nominations...................................     1

                                  ----------

                        STATEMENTS PRESENTED BY SENATORS

    Roberts, Hon. Pat, U.S. Senator from the State of Kansas,
      Chairman, Committee on Agriculture, Nutrition, and Forestry....     1
    Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan...     2

                                   WITNESSES

    Berkovitz, M. Dan, Nominee to be Chairman, Commodity Futures
      Trading Commission.............................................     5
    Hubbard, E. James, Nominee to be Under Secretary for Natural
      Resources and Environment, U.S. Department of Agriculture......     6
                                  ----------

                                    APPENDIX

    Prepared Statements:
        Berkovitz, M. Dan............................................    28
        Hubbard, E. James............................................    31

    Document(s) Submitted for the Record:
    Roberts, Hon. Pat:
        Wildlife Group Coalition, letter of support for nominee......    36
        Federal Forest Resource Coalition, letter of support for
          nominee....................................................    38
        Rural Voices for Conservation Coalition, letter of support
          for nominee................................................    41
        The National Association of State Foresters, letter of
          support for nominee........................................    43
        Riley Stegner and Associates, letter of support for nominee..    44
        The Society of American Foresters, letter of support for
          nominee....................................................    45
        American Forest Foundation, letter of support for nominee....    46
        Outdoor Recreation Roundtable, letter of support for nominee.    47
        Western Governors Association, letter of support for nominee.    49
        5-day letter, Committee questionnaire and Office of
          Government Ethics Executive Branch Personnel Public
          Financial Disclosure Report filed by Dan M. Berkovitz...... 51-87
        5-day letter, Committee questionnaire and Office of
          Government Ethics Executive Branch Personnel Public
          Financial Disclosure Report filed by James E. Hubbard

    Question and Answer:
    Berkovitz, M. Dan:
        Written response to questions from Hon. Pat Roberts..........   116
        Written response to questions from Hon. Debbie Stabenow......   121
        Written response to questions from Hon. John Boozman.........   125
        Written response to questions from Hon. Tina Smith...........   126
    Hubbard, E. James:
        Written response to questions from Hon. Pat Roberts..........   127
        Written response to questions from Hon. Debbie Stabenow......   128
        Written response to questions from Hon. Steve Daines.........   133
        Written response to questions from Hon. Patrick Leahy........   134
        Written response to questions from Hon. Michael F. Bennet....   136
        Written response to questions from Hon. Tina Smith...........   139

                         HEARING ON PENDING NOMINATIONS

                                  ----------

                             TUESDAY, JULY 24, 2018

                                  United States Senate,
             Committee on Agriculture, Nutrition, and Forestry,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:05 a.m., in
    room 328A, Russell Senate office building, Hon. Pat Roberts,
    Chairman of the Committee, presiding.
        Present: Senators Roberts, Boozman, Hoeven, Ernst, Thune,
    Daines, Fischer, Stabenow, Brown, Klobuchar, Bennet,
    Gillibrand, Donnelly, Heitkamp, Casey, and Smith.

     STATEMENT OF HON. PAT ROBERTS, U.S. SENATOR FROM THE STATE OF
    KANSAS, CHAIRMAN, U.S. COMMITTEE ON AGRICULTURE, NUTRITION, AND
                                FORESTRY

        Chairman Roberts. I call this hearing of the Senate
    Agriculture, Nutrition, and Forestry Committee to order. I want
    to thank my colleagues for joining us in reviewing the
    nominations of the individuals that are before us today: Mr.
    Dan Berkovitz, of Maryland, for the position of Commissioner,
    the U.S. Commodity Futures Trading Commission, and Mr. James
    Hubbard, of Colorado, for the position of Under Secretary of
    Natural Resources and Environment.
        While serving different functions, both the CFTC and the
    Department of Agriculture play critically important roles in
    supporting our Nation's farmers, ranchers, growers, and
    landowners while also ensuring our Federal lands are properly
    managed.
        The Committee has been reviewing and considering
    nominations as quickly as possible. It is crucial to have these
    positions filled as both are very important positions at the
    CFTC as well as the USDA.
        The Committee has received multiple expressions of support
    for nominees from organizations all throughout the agriculture,
    natural resources, and financial market sectors. I am very
    grateful to all of these organizations for voicing their
    support for these fine nominees.
        Without objection, I am entering the letters of support
    into the record.
        [The letters can be found on pages 36-50 in the appendix.]
        Chairman Roberts. Gentlemen, I also note that you have
    family and friends in the audience today. Allow me to welcome
    you to the Committee. Would you please stand? Thank you.
        [Applause.]
        Chairman Roberts. Again, I thank the nominees for being
    here today. I look forward to your testimony.
        I now recognize my distinguished colleague, Ranking Member
    Deborah Stabenow, from the great State of Michigan, for her
    opening remarks.

    STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR FROM THE STATE
                              OF MICHIGAN

        Senator Stabenow. Well, thank you, Mr. Chairman, and I am
    pleased to be back here with yourself and with the Committee,
    and I just want to note this is the first time we have been
    together since we passed the farm bill. In case folks have not
    heard, Mr. Chairman, under your leadership we moved quickly to
    pass it through the Senate on a historic bipartisan vote of----
        Chairman Roberts. What was that vote?
        Senator Stabenow. 86-11.
        Chairman Roberts. 86-11.
        Senator Stabenow. Two folks were not there that would have
    also voted yes, so we count it as 88, actually.
        [Laughter.]
        Senator Stabenow. I just want to thank you and I want to
    thank all the members of the Committee for showing how the
    Senate should work. So I appreciate it very much, and I
    appreciate your leadership, Mr. Chairman.
        Chairman Roberts. Thank you.
        Senator Stabenow. Mr. Hubbard and Mr. Berkovitz,
    congratulations to both of you, and welcome to your families
    who are here today. While the two of you will serve in vastly
    different roles within the Government, both of you will serve
    in important positions that affect the lives of many people.
        Mr. Hubbard, as Under Secretary for Natural Resources and
    Environment at USDA, you will oversee the U.S. Forest Service.
    You have had a long and distinguished career working on
    forestry issues at both the State and the Federal level. As the
    Forest Service once again faces a challenging wildfire season,
    we need strong leadership at the Department now more than ever.
        We have seen how climate change has exacerbated drought and
    insect infestations in our forests while more and more people
    are building homes in forested areas. There is no silver bullet
    to stopping modern-day mega fires, but the agency must do
    everything it can to protect lives and property during
    wildfires.
        Our Committee has taken an active role in this topic. In
    the recently passed omnibus, Congress finally fixed the
    longstanding issue of the Forest Service's broken budget. The
    Senate farm bill's forestry provisions build on the omnibus to
    encourage science-based and collaborative restoration of our
    national forestlands.
        Beyond suppressing wildfires, the Forest Service also
    manages land for hunting and fishing, timber harvesting, and
    wilderness preservation, among other important things. Our
    public forestlands help drive an outdoor recreation industry
    that contributes nearly $1 trillion to the economy across the
    country and certainly a major role in Michigan. It also creates
    thousands of jobs across the country, and, again, jobs in my
    home State. Mr. Hubbard, it will be up to you to continue to
    foster that growing segment of our economy.
        Finally, very importantly right now, we need strong
    leadership to reverse the culture of sexual misconduct that has
    unfortunately plagued the Forest Service for decades.
    Harassment and misconduct are not--not--acceptable. The Forest
    Service must do a better job of establishing a culture where
    sexual misconduct is not tolerated, where accusations are
    investigated thoroughly and properly, and where offenders are
    held accountable.
        Mr. Hubbard, if confirmed, you would lead the effort to
    right the ship at the Forest Service on sexual misconduct
    matters. I look forward to hearing how you will oversee the
    agency and demand accountability on these very important
    issues.
        Mr. Berkovitz, you have been nominated as well for a very
    important position. Farmers, manufacturers, and consumers all
    rely on our futures and swaps markets to provide stability and
    certainty, and the CFTC plays a critical role to ensure these
    markets are free of fraud and abusive practices.
        Mr. Berkovitz, you have a tremendous amount of experience
    and a deep understanding of agricultural concerns. As General
    Counsel at the CFTC, you helped implement many reforms after
    the devastating financial crisis. More recently, while in the
    private sector, you have seen how market participants have
    applied those rules. It is critical that we never return to the
    risky behaviors that caused the Great Recession. Millions of
    hardworking Americans faced job losses and financial ruin
    through no fault of their own. The CFTC must continue to
    progress to complete the rulemakings under the Dodd-Frank Act.
        For instance, we need movement on the long-delayed position
    limits rule so that market participants have the clarity they
    need. The CFTC also must be thoughtful in how it considers
    changes to its existing rules so that customers remain
    protected and our markets remain strong.
        Thank you again to both of you for being here and for being
    willing to serve. If confirmed, your work and leadership will
    have a significant impact on our forests, our markets, and our
    people.
        Thank you, Mr. Chairman.
        Chairman Roberts. Thank you for your opening remarks,
    Senator Stabenow.
        I now welcome our panel of nominees this morning.
        Our first witness today is Mr. Dan Berkovitz, who was
    nominated by President Trump to serve as a Commissioner on the
    U.S. Commodity Futures Trading Commission. Mr. Berkovitz most
    recently was a partner at the law firm Wilmer Cutler Pickering
    Hale and Dorr, where he was co-chair of the firm's futures and
    derivatives practice. During this time he served as an adjunct
    professor of law at Georgetown University. Prior to joining
    Wilmer Hale, Mr. Berkovitz served as General Counsel for the
    CFTC from 2009 to 2013. Before joining the CFTC, Mr. Berkovitz
    served as counsel to the Senate Permanent Subcommittee on
    Investigations, leading several investigations into what impact
    speculators have on commodity markets. Mr. Berkovitz receive
    his A.B. in physics from Princeton University in 1978 and his
    J.D. from the University of California, Hasting College of Law,
    in 1983.
        Mr. Berkovitz, welcome. I look forward to your testimony.
        For our next nominee, I will turn to Senator Bennett for
    the introduction, but before I do, I want to mention Mr. James
    Hubbard, who grew up in Neodesha, Kansas, and attended Kansas
    State University before transferring for some reason to
    Colorado State to study forest management. Senator Bennet may
    think otherwise, but we just might need to further examine Mr.
    Hubbard's decision to transfer from Kansas State at some point.
        [Laughter.]
        Chairman Roberts. I now turn to Senator Bennet for
    introductions.
        Senator Bennet. Thank you, Mr. Chairman, and thank you,
    Ranking Member Stabenow, as well, for holding this hearing. It
    is my pleasure to introduce a fellow Coloradan, Jim Hubbard, as
    our nominee to serve as Under Secretary for Natural Resources
    and Environment at the USDA.
        Mr. Hubbard arrives with over 40 years of forestry
    experience. He served at the U.S. Forest Service for 11 years.
    As the Deputy Chief for State and Private Forestry there, he
    promoted a collaborative cross-boundary approach to forest
    management. Before that, Mr. Hubbard served as Director of the
    Office of Wildfire Coordination at the Department of Interior
    where he oversaw the implementation of the National Fire Plan
    and coordinated across the five land management bureaus. Prior
    to his Federal service, Mr. Hubbard worked for the Colorado
    State Forest Service for over 34 years, including 20 years as
    our State forester from 1984 to 2004. His tenure included the
    largest wildfire in Colorado history, the Hayman Fire.
        Mr. Hubbard is also no stranger to this Committee, Mr.
    Chairman. In 2013 he testified before our Forestry and
    Conservation Subcommittee about the growing risk of wildfire
    and the need to end fire bombing. Now that we have finally
    ended fire bombing in the 2018 omnibus, I am delighted to
    welcome Mr. Hubbard back, and I look forward to working with
    him as new resources become available to safeguard the health
    of our watersheds. These investments are critical to Colorado.
    Going forward, we know that the challenges of wildfire will
    continue to grow in a changing climate, and the conservation of
    our public lands will be as important as ever with the rapid
    population growth in Colorado. These trends make it all the
    more important that we have leaders at USDA like Mr. Hubbard,
    leaders with decades of experience, with an appreciation for
    the importance of national forests to our economy, leaders who
    are focused on solving problems, working collaboratively and
    thinking creatively. We are fortunate to have such a qualified
    nominee for that position.
        I want to close by thanking Mr. Hubbard for coming out of
    retirement and offering to serve once more.
        Thank you, Mr. Chairman.
        Chairman Roberts. As is the tradition and custom of the
    Committee before nominees and witnesses are to provide
    testimony, we need to administer the oath. If both of you could
    please stand and raise your right hands. First, do you swear
    that the testimony you are about to present is the truth, the
    whole truth, and nothing but the truth, so help you God?
        Mr. Berkovitz. I do.
        Mr. Hubbard. I do.
        Chairman Roberts. Second, do you agree that, if confirmed,
    you will appear before any duly constituted committee of
    Congress if asked to appear?
        Mr. Berkovitz. I do.
        Mr. Hubbard. I do.
        Chairman Roberts. Thank you. We look forward to your
    testimony Mr. Berkovitz.

     STATEMENT OF DAN M. BERKOVITZ, OF MARYLAND, NOMINATED TO BE A
           COMMISSIONER, COMMODITY FUTURES TRADING COMMISSION

        Mr. Berkovitz. Chairman Roberts, Ranking Member Stabenow,
    and Members of the Committee, thank you for the opportunity to
    appear before you. It is an honor to be here today.
        I would like to thank President Trump for nominating me,
    Minority Leader Schumer for recommending me, and others who
    have supported me throughout this process. I also would like to
    thank the staff for the consideration they have afforded me.
        My wife, Michelle, daughter, Zoe, son, Eli, and niece,
    Elizabeth, are with me here today and I thank them for their
    steadfast support. My mother is watching this on the webcast
    back home in Indiana--hi, Mom--and I thank you very much.
        The U.S. commodity markets are the strongest----
        Chairman Roberts. What is your mother's name?
        Mr. Berkovitz. Anna.
        Chairman Roberts. Anna, welcome to the all-powerful Senate
    Agriculture Committee.
        [Laughter.]
        Chairman Roberts. Your son's very lucid and pertinent
    comments.
        Mr. Hubbard. Thank you. The U.S. commodity markets are the
    strongest and most liquid commodity markets in the world. These
    markets are essential to our Nation's economy and to the well-
    being of millions of Americans. A robust regulatory program is
    a cornerstone for the strength of these markets.
        The basic purpose of these commodity markets is to enable
    American businesses--including farmers, ranchers, producers,
    manufacturers, and consumers--to manage the price risks in
    their business. The regulatory system must prevent and
    prosecute fraud and manipulation, ensure the safeguarding of
    customer funds, provide a fair and transparent manner for price
    discovery, protect customers, and enable innovation. I have had
    the privilege of working with this Committee on several
    previous occasions. As Senate staff under the leadership of
    Senator Carl Levin, I worked with the members and staff of this
    Committee, on both sides of the aisle, on the legislation in
    the 2008 farm bill to regulate energy swaps.
        At the CFTC, I had the privilege of leading the legislative
    assistance and drafting team, which provided nonpartisan
    technical assistance to the Congress--including this
    Committee--during its consideration of the Dodd-Frank Act. I
    look forward, if confirmed, to continuing to work with the
    members of this Committee.
        The Dodd-Frank Act, the CFTC's regulatory program to
    implement the act, and the industry's implementation of those
    regulations have substantially reduced systemic risks,
    strengthened market integrity, enhanced transparency, and
    improved public confidence in these markets.
        The CFTC's work to implement the act is not yet complete,
    however. If confirmed, I will work with my fellow Commissioners
    to complete the outstanding rulemakings to limit speculative
    positions, establish capital requirements for swap dealers, and
    permanently set the de minimis threshold for swap dealer
    registration in a timely manner.
        My work in private practice has given me an appreciation of
    how the CFTC's regulatory program affects end users and market
    participants. I am aware of the importance to market
    participants that the CFTC's regulations be clear and applied
    in a consistent way. I understand the potential impacts of new
    regulations on businesses. It is critical that the CFTC
    consider these impacts when enacting new regulations,
    consistent with the governing statutes.
        The CFTC must carefully monitor the commodity markets to
    evaluate and respond to new information and market conditions.
    The emerging markets for cryptocurrencies are just the latest
    example of new market conditions the CFTC must address. The
    CFTC also must continue to examine its existing regulations to
    ensure that they serve their intended function and
    congressional directives in the most efficient and effective
    manner.
        I strongly believe in transparency and openness to public
    comment. If confirmed, I am committed to close consultation
    with stakeholders, Members of Congress, and other interested
    persons.
        The CFTC also should continue to consult and coordinate
    with other Federal regulators to better inform its regulatory
    decisions and avoid conflicting or duplicative regulations.
        Harmonization internationally is important to reduce
    systemic risk globally, avoid market fragmentation, and prevent
    regulatory arbitrage. The CFTC should continue to be a global
    leader in this area.
        I am enthusiastic about returning to public service. If
    confirmed, I pledge to work with each of the members of this
    Committee to ensure the CFTC's regulatory program serves the
    public and protects the farmers, ranchers, producers, and
    customers that rely on the futures and swaps markets.
        Thank you for your time and consideration. I look forward
    to answering any questions you may have.
        [The prepared statement of Mr. Berkovitz can be found on
    page 28 in the appendix.]
        Chairman Roberts. Thank you, Mr. Berkovitz.

    STATEMENT OF JAMES HUBBARD, OF COLORADO, NOMINATED TO BE UNDER
         SECRETARY FOR NATURAL RESOURCES AND ENVIRONMENT, U.S.
                       DEPARTMENT OF AGRICULTURE

        Mr. Hubbard. Chairman Roberts, Ranking Member Stabenow, and
    members of the Committee, I thank you for your time and
    consideration today for my nomination as Under Secretary for
    Natural Resources and the Environment at the U.S. Department of
    Agriculture. I would like to thank President Trump for the
    nomination and Secretary Perdue for his support.
        I was raised in Kansas, and it was a good upbringing, sir.
    It was with the working people close to the land. My
    commitments run deep. I did marry my wife, Cindy, 53 years ago,
    and she is with me here today. Three daughters and seven
    grandchildren are not, but they, too, are watching.
        My professional career was 48 years of public service in
    Oregon and mostly in Colorado, with 20 of those years as the
    State forester. The Hayman Fire, as was mentioned, that became
    a dominant issue in the State. It showed us that we did not
    have room for those large fires where we had people and
    development along the front range of Colorado anymore, and we
    needed to do something about it. The ``something about it''
    necessarily meant crossing boundaries. It was not one
    ownership. It was multiple ownerships, and you had to do it at
    a scale that would make a difference.
        Out of that working across those boundaries came the Good
    Neighbor Agreement. The Good Neighbor Agreement allowed the
    State and the Federal agencies to coordinate on implementing
    high-priority projects. That was a pilot in Colorado. It proved
    useful enough that it became permanent and national.
        I continued national policy work with the National
    Association of State Foresters. I served as their legislative
    chair for 10 years, and that is the 50 State foresters dealing
    with a bipartisan agenda, and in 1990 I was president of that
    association, and in 1990 we were part of passing the first
    Forestry Title in the farm bill, as were some of you. I thank
    you for that.
        I moved to D.C. full-time to work on fire issues with the
    Department of Interior and with the Forest Service. I retired a
    little over a year ago, but for some reason I still feel the
    need to serve. In that regard, I would like to turn to three
    priorities that I would deal with, if confirmed.
        No. 1 would be provide a safe, inclusive work force,
    workplace.
        No. 2 would be increase sustainable active land management.
    More work needs to be done. That work needs to be a shared
    priority with the States. It needs to be across those
    boundaries and at scale.
        Third, I would pay attention still to this issue of fire
    and fire protection across jurisdictions. We need agreements.
    We have agreements, but we need further agreement on fire
    response, on risk mitigation and hazard reduction, and on
    community protection.
        Specifically to the first priority, Secretary Perdue speaks
    of doing right by everyone. I subscribe to that, and I would
    personally provide the leadership to ensure everyone is free of
    harassment. All instances would be quickly identified; and
    accountable actions would be taken. The Financial Stability
    Oversight Council has already taken some steps, but it would be
    my first briefing to find out where they are. It would be to
    reinforce their actions and strengthen as needed. Harassment
    has no place anywhere.
        To conclude, I would like to thank Congress for addressing
    the fire financing issue and the forest management provisions
    provided in the omnibus bill. This is a big step toward
    improving the health of our Nation's forests. I pledge that
    these forests and grasslands have a sustainable future. We have
    a unique asset in our natural resources, and I would want to
    see that continued.
        I am honored to be with you today. I thank you, and I look
    forward to your questions.
        [The prepared statement of Mr. Hubbard can be found on page
    31 in the appendix.]
        Chairman Roberts. We thank you, sir.
        Mr. Berkovitz, in your opinion, what is a hedge? That
    sounds pretty simplistic, but I want to get into what
    flexibility should be provided regarding what is considered a
    bona fide hedge. How will you ensure hedging is reflective of
    the risk management needs of farmers and ranchers and growers
    and those who purchase from them, especially in these uncertain
    times with regards to our country's trade policy and so much
    retaliation that we are experiencing?
        Mr. Berkovitz. Thank you, Senator. A hedge is really when a
    farmer, for example, wants to ensure that they have a
    predictable price for the crop that they anticipate coming to
    harvest, that they can go on the futures market and purchase or
    sell a futures contract. If they are growing a crop, they would
    sell the futures contract to ensure that they would have a
    definite price for the sale of that crop in the future, and
    that way there is price stability and predictability and the
    farmer is protected against future volatility and price swings.
        A fundamental purpose of the futures markets is indeed to
    enable farmers, ranchers, producers, manufacturers, and users
    to obtain such price protection, to protect them against price
    risks and ensure that stability.
        In the Commodity Exchange Act, Congress has directed the
    CFTC to protect hedgers and end users in a number of aspects.
    For example, under the position limits regime, speculative
    positions are limited, but hedging positions are not limited.
    So the CFTC needs to be cognizant of those needs in that
    community in numerous areas that it regulates.
        Chairman Roberts. I appreciate that. Crop insurance has
    become an increasingly critical risk management tool for
    farmers, ranchers, and growers. It is a longstanding priority
    for me and our distinguished Ranking Member. Given the direct
    relationship between futures markets and crop insurance,
    specifically as a pricing benchmark at planting and harvest and
    a volatility indicator, what is your opinion on the role of
    speculative investment through managed funds, index funds, and
    similar instruments? What impact have they had on volatility
    and convergence in commodity contracts and ultimately impact
    the effectiveness of the crop insurance program? I might add
    when the distinguished Ranking Member and I were conducting
    hearings all across the country, crop insurance was the No. 1
    issue, and it is especially important today with some of the
    extreme weather that we have experienced, not to mention, and I
    will say it again, a big question mark with our trade policy.
        Mr. Berkovitz. This is, I think, one of the fundamental
    purposes and the reasons why, if confirmed at the Commission, I
    would work with my fellow colleagues to establish a position
    limits rule on speculative positions to ensure that speculative
    positions do not have any undue impact or effect on commodity
    prices. That is one of the purposes of those regulations, and
    CFTC has some additional work to do to complete the rulemakings
    that Congress laid out in the Dodd-Frank Act. I think those
    rulemakings and those speculative position limits are important
    to achieve those goals.
        Chairman Roberts. Mr. Hubbard, how do you view the role of
    proactive forest management as a tool to prevent, mitigate, and
    address wildfire? If confirmed, how will you lead the Forest
    Service to promote more forest management on the national
    forest system? Senator Daines--we had a wonderful meeting up in
    his State, Montana, and then Secretary Perdue, one of the best
    meetings that I have had with regards to sitting down with
    folks and on the wagon talking, asking them questions. Then we
    went up to Glacier National Park, and as you go down into Lake
    McDonald up there, still that forest fire of 2003 is still
    gray, some green coming up. There is what they advertise as a
    ``senior walk'' through the forest. The people who were in
    charge of that determined that that would be the appropriate
    walk that my wife and I should take. I insisted that was not
    the case but agreed. But even in that, just about half a mile
    up the road on the Going-to-the-Sun Highway, you go in there,
    and I was stunned with all the old forest growth. All it takes
    is one lightning strike or some incident.
        I think last year Montana had 27 fires. If Senator Bennet
    were here, he could name the number right off with regards to
    Colorado. This has become just a top priority for you, and I
    know you mentioned that in your comment. Please respond.
        Mr. Hubbard. Thank you, Senator. I think that we should
    recognize that our Western forests are in a condition that are
    going to continue to be a problem, and it is vast acreages. A
    lot of that forest was created by disturbance, and it is at the
    point in its life cycle where it is ready to be regenerated by
    disturbance--fire, insect, disease. So that will be with us.
        More active management does help, and you just have to pick
    the right places to make your investment. The Forest Service
    has good analytics to determine those choices, but I do not
    think it can be just the Forest Service alone. I do believe in
    cross-boundary work, and I do believe in sharing the priority
    decisions based with the States. My approach, if confirmed,
    would be to sit down with the States and determine where we can
    do the most good and where we should make our investment.
        Chairman Roberts. I appreciate that.
        Senator Stabenow?
        Senator Stabenow. Thank you, Mr. Chairman.
        Just to follow up on the improvements that we made, the
    tools that we made available in the omnibus and how we move
    forward in managing that, the package that we passed Secretary
    Perdue called ``meaningful reforms and forest management
    tools.'' However, Chief Christiansen indicated little work has
    been done yet on the new tools, and so my question is
    acceleration. How do you intend to really accelerate the use of
    the new authorities that we gave earlier in the year,
    particularly with the threats to the forests?
        Mr. Hubbard. Thank you, Senator. I do strongly believe in
    sharing that space with the States, so that would be my first
    step, is to sit down. What are our priorities? Where should we
    do our work? It is good that we have the range of tools because
    we are going to find we need different things in different
    places. That is helpful in making that happen.
        The acceleration is going to come from the leadership of
    the Forest Service, and it is going to come from meeting with
    those regional foresters and having those regional foresters be
    a part of that discussion with the State. Then I would intend
    to publicly announce what our intentions are and go to work.
        Senator Stabenow. We have also added some new budget
    flexibility, and so looking longer term, do you at this point
    have thoughts on how you would use that flexibility?
        Mr. Hubbard. I do. The Forest Service is an agency, I
    believe, that wants to meet expectations. They just need to
    know what those clear expectations are and what their focus is.
    I would suggest that we focus on more active management,
    applying those tools with the State, and then pay attention to
    where we need to do hazard reduction for fire protection,
    especially around communities.
        Senator Stabenow. Thank you. Then speak a little bit more
    about what has happened in terms of the culture of the Forest
    Service. Last week USDA provided the Committee with data
    showing that over the past 2 years alone--we know this has been
    going on, unfortunately, for a long time, but during the last 2
    years, the Forest Service had 183 reports alleging sexual
    harassment. Of the 128 cases that they have closed so far, they
    found 77 confirmed cases of misconduct. These are high numbers,
    really, for an agency.
        How would you personally address this coming in and
    providing new leadership? Also, I want to make sure that the
    people bringing these complaints do not face retaliation. So
    how do you intend to approach that as well?
        Mr. Hubbard. Those are good points, Senator. Thank you. I
    really would, if confirmed, make my first briefing from the
    agency what are they doing here and bring me up to speed on
    what is happening and help me explain it better and especially
    help me understand what actions they are taking. This idea that
    it is safe to come forward is essential, and I would stress
    that, the idea that we quickly followup and that we do take
    action and that we send that signal to everybody, because I
    firmly believe, regardless of the number--even if it is just
    one--harassment has no place.
        Senator Stabenow. Thank you. We will be working with you
    closely. This is an area that really needs your leadership.
        Mr. Berkovitz, given the considerable progress that the
    CFTC has made during the passage of Dodd-Frank and the
    implementation of the Commission over the last number of years,
    what is your philosophy on how the agency should proceed in
    terms of the years to come?
        Mr. Berkovitz. Thank you, Senator. As I said and as you
    have noted, I think the agency has made substantial progress in
    implementing Dodd-Frank. Dodd-Frank has substantially improved
    the resilience of our financial markets, and reduced systemic
    risks. That does not mean our work is complete. You cannot just
    address the last crisis. You have to be vigilant to examine
    evolving market conditions and try to get ahead of the curve.
    Financial crises never appear in the exact same way. New risks
    are continuously emerging. We are seeing cryptocurrencies and
    various other things, new products come onto the market.
        So one of the things that I would do, if confirmed, is try
    to get ahead of the curve on these. Use the data that the
    agency is getting, ensure it is good-quality data, that the
    agency can use the data, and have our market experts look at
    the data and inform the Commission of emerging risks. I think
    it is very important to be proactive in these markets.
        Senator Stabenow. I agree with you, and I am wondering what
    do you think the most important thing is that the CFTC can do
    to better ensure that we do not return to the excessive risks
    that caused the Great Recession.
        Mr. Berkovitz. Well, I think we need to continuously watch
    these markets and we need to get better data. The agency is
    getting a lot of data. It has to improve the quality and
    consistency of that data, and it has to ensure that it is
    properly interpreting that data to stay ahead of the market
    conditions. So I would put significant effort in that regard.
        Senator Stabenow. Thank you.
        Thank you, Mr. Chairman.
        Chairman Roberts. Senator Boozman.
        Senator Boozman. Thank you, Mr. Chairman. Thank you all for
    being here, and thank you very much for your willingness to
    serve.
        Mr. Hubbard, I am pleased that you talked about forest
    management. You talked about it, Senator Roberts talked about
    it. I think it is important to many of us on the Committee. It
    is important in the sense of for all kinds of reasons: habitat,
    water quality, erosion, and the list goes on and on. I do not
    want to go further than that, just to say that we do appreciate
    your efforts in that regard.
        You have been around for a long time in the public and
    private sector, and you have lots of experience. You have seen
    all kinds of different projects through the years. Some have
    worked well, some have not worked so well in the Forest Service
    and others.
        Can you talk about some projects that you feel like that
    maybe we need to invest more in? Then also maybe talk about
    some projects that are not working as well.
        Mr. Hubbard. Certainly. Thank you, Senator. The projects
    that work well that I have found is where we are working
    together, and that is what brought me from the Good Neighbor
    Agreement in Colorado following fires to try to reduce the
    wildfire risk across those boundaries. The Hayman Fire
    essentially missed the edge of Denver mostly because of a
    prescribed burn that the Forest Service had done, a
    controversial prescribed burn because it occurred over a 2-week
    period and it put a lot of smoke in the air. People did not
    like that. In the end it is what saved southwest Denver from
    that fire. It was not just on national forest. I crossed that
    boundary.
        So this idea of working together to decide what our
    priorities are and the idea of implementing those priorities
    across that boundary at a large enough scale to make a
    difference becomes very important in trying to deal with those
    issues.
        Further than that, the kind of assistance that you have
    seen provided for landowners is critical. Landowners are good
    stewards. They want to make the right kind of decision. When
    they have the help in making that kind of decision and they
    have the kind of collaboration and coordination across the
    boundary, they will produce a healthy forest.
        Senator Boozman. Very good.
        Mr. Berkovitz, we had a good meeting yesterday--I enjoyed
    that--and had a good discussion. We talked about the importance
    of and understanding of agriculture. The CFTC really initially
    was for that, for hedging for our farmers and things like that.
    Now it is much more than that. It has gotten very, very
    complicated.
        Can you talk a little bit about, if you are confirmed, how
    you are going to engage in those involved in agriculture to
    better understand and then also for them to better understand,
    you know, exactly what goes on with the Commission?
        Mr. Berkovitz. Thank you, Senator. I very much look forward
    to continuing to work with the agricultural community and
    groups. When I was on the Senate staff on the Senate Permanent
    Subcommittee on Investigations, we were examining various
    commodity markets. That is when I first became acquainted with
    the agricultural markets and their rich history and really the
    unique history of each of the markets. We talk about the
    agriculture markets, but for each of the crops how the futures
    markets work--they can be very different. Each agricultural
    crop has unique market characteristics, and I have always
    enjoyed learning about those and working with the various
    groups. I would look forward continuing to work with those
    groups to be educated on how the CFTC's regulatory program
    affects each of the agricultural commodities. I intend to have
    a very open, transparent office, and I invite folks to come in
    and meet with me if there are concerns, if they need further
    information about what the CFTC is doing. I am also very
    willing to go out and meet, to go and visit folks in their
    communities and in the various States. So I am very much
    looking forward to continuing to work with agricultural groups.
        Senator Boozman. Very good. Thank you. I do not have time
    to ask the question, but I do want to express to you, Mr.
    Berkovitz, we talked yesterday about the EU's proposal to
    expand their regulatory and supervisory authority to require
    all foreign central counterparties to register with the EU. I
    am very, very concerned that this could require the U.S. CCPs
    to implement additional EU law above and beyond our U.S. laws.
    So to maintain our sovereignty and thus maintain our markets I
    think is very, very important.
        Thank you, Mr. Chairman.
        Chairman Roberts. I would encourage the Senator to submit
    that question for the record.
        Senator Klobuchar?
        Senator Klobuchar. Thank you very much, Mr. Chairman.
    Congratulations to both of you.
        I think I will start there with Mr. Berkovitz on the
    renewable fuels and the standard and the RINs. In March the
    CFTC entered into a Memorandum of Understanding with the EPA
    related to the RINs market, and those are the renewable
    identification numbers. This included the EPA sharing the RIN
    data and information so that the CFTC could better advise about
    ways to minimize fraud.
        What advice would you provide to the EPA regarding the RINs
    market as a Commissioner? As you know, Senator Grassley and I
    have led a number of letters, and others on this Committee have
    been involved. The issue is that the EPA has been granting a
    bunch of waivers--now the Secretary is gone, so we hope that
    stops--to oil refineries, and we believe the best way to get
    out of this is just by blending fuels and moving ahead. I
    wanted you to talk about what could happen with this RINs
    market and what we have to watch out for given what we have
    been seeing.
        Mr. Berkovitz. Well, Senator, thank you for the question. I
    would very much look forward to implementing that Memorandum of
    Understanding and continuing to provide that technical
    assistance. The CFTC has a lot of experience and I think it can
    offer to the EPA much in the area of that experience and
    assistance in helping EPA meet it's responsibilities with
    respect to that market. I certainly would support the CFTC
    providing whatever technical assistance they need.
        Senator Klobuchar. Do you think that there is current
    information on trading data? Do you think that that would
    increase transparency if they had that just based on your
    experience with other markets?
        Mr. Berkovitz. I would have to look more deeply into that
    when I am over at the agency, but I would definitely look into
    that and do that when I am over there. Thank you.
        Senator Klobuchar. I appreciate it. Your mother will be
    proud if you do that, so thank you.
        With you, Mr. Hubbard, I am going to turn to some of the
    issues on forestry and fires. The Forest Plans for the Superior
    and Chippewa National Forests in Minnesota for the management
    of both young and old growth habitats are in place. Grasslands,
    pastures with shrubs, young forests, known collectively as
    ``early successional habitat,'' can have significant benefits
    for game species and forest health, but their development
    requires an active and sustainable timber program.
        How will you ensure that the national forests in my State
    and other places meet Forest Plan goals for these types of
    early successional habitats?
        Mr. Hubbard. Thank you, Senator. When I spoke of the Forest
    Service needing some focus, that is part of it, that more work
    on the ground for sure needs to be done. We need to find ways
    of focusing on that work and getting it done.
        I believe even with the national forests that they operate
    within a landscape that is a larger scale, so I think the idea
    that we collaborate on the actions to be taken and that then we
    publicly declare ourselves accountable is a step. The work
    needs to be done for sure, and we are not doing enough.
        Senator Klobuchar. Right. We have worked, of course, to
    expand the Good Neighbor Authority, and in the 2018 bipartisan
    budget agreement, in this farm bill, as noted and you noted
    there are some provisions. Senator Daines and I have a
    provision in there to improve coordination across Federal and
    private boundaries. I think there is good work and
    acknowledgment on a bipartisan basis, but we are still having
    these fires, and I think there are still huge management issues
    of the forests. So if you could just in the last minute just
    walk through how you would actually implement some of these
    plans.
        Mr. Hubbard. Certainly. Thank you. I would begin by
    approaching the State and deciding priorities, that if we
    cannot cover everything, what is most important? Where do we
    want to focus our work?
        I would then go to those regional foresters and say: We
    have got a lot of assets. How do we want to apply those assets?
    Because right now a priority would be to get more active
    management on the land, especially where that active management
    reduces wildfire risk and protects communities.
        So the Forest Service can come up with those plans, but I
    want to do the comparison with the State to decide where it is
    most important to implement those plans and get those projects
    underway.
        Senator Klobuchar. Thank you.
        Chairman Roberts. Senator Fischer.
        Senator Fischer. Thank you, Chairman Roberts and Ranking
    Member Stabenow, for having today's hearing.
        Agriculture is the backbone of Nebraska's economy, and it
    is a big part of my own life. As a rancher, I know that
    agriculture can be a very risky business. Ag producers often
    seek to hedge their products using commodity derivatives. The
    Commodity Futures Trading Commission plays a crucial role in
    ensuring that there is a stable, liquid, and transparent
    market.
        Mr. Berkovitz, if confirmed, you will be taking a
    leadership role in an agency during a critical time, and you
    will be forced to address many difficult challenges, and I look
    forward to learning more about your background and
    qualifications for this role, which is so important to my
    constituents and all Americans.
        Mr. Berkovitz, in your testimony you say that the American
    commodity markets are the most liquid in the world. I do not
    need to tell you that our farmers and ranchers rely on these
    markets to hedge the price of the products before harvest. When
    markets become not as liquid, it is harder for them to hedge or
    effectively ensure their crops. It also may raise the cost of
    these hedges. So can you, broadly speaking, identify what you
    see as the biggest threats to this liquidity?
        Mr. Berkovitz. There are a number of issues that I think
    the agency has to be on the watch for in this respect with
    various products. It really depends on the various particular
    products, the evolving cash markets for some of these products,
    evolution for certain of the products themselves, different
    risk management tools can change liquidity characteristics, the
    availability of bank loans, and the nature of the participants
    in these markets. In some of our markets we have seen a
    withdrawal of participants. There are fewer participants. That
    has made it more difficult to obtain hedges for products
    further in the future. That has been a concern in a number of
    markets.
        So I think we have to look at how certain markets are
    evolving, the impacts of various economic conditions and
    regulations on participants in the markets, and be vigilant in
    terms of how that is affecting the liquidity in the markets.
        Senator Fischer. As you know, when markets are not as
    liquid, the price goes up, and it goes up for farmers. When I
    am home in Nebraska, I speak to community bankers who tell me
    of the difficulty of offering such products for fear of running
    afoul of the Volcker Rule. I also speak to farmers who cannot
    get these products. You alluded to that in your previous
    answer.
        These farmers and these community banks are not the Wall
    Street traders that the Volcker Rule was meant to regulate.
    These farmers and bankers did not cause the financial crisis.
    Farming is a risky business, but they are now required to take
    on even more risk.
        Can you comment about the recent moves by the Federal
    Reserve to change the Volcker Rule?
        Mr. Berkovitz. The Federal Reserve and the CFTC have
    proposed rules to amend the Volcker Rule, and one of the things
    in that proposal was to establish various tiers of compliance
    and lesser degrees of compliance depending on---lesser
    requirements depending upon the size of the bank. So that is
    something that the Federal Reserve has proposed and the other
    financial regulatory agencies, including the CFTC, have
    proposed to lessen the obligations upon banks with lesser
    assets.
        The public comment period for that is out, and if I am
    confirmed, I very much look forward to reviewing the comments
    on that proposal to looking at those comments, consulting with
    the Federal Reserve and the other prudential regulations, my
    fellow Commissioners, and making a decision on that proposal.
        Senator Fischer. If I can follow up with that, we did pass
    bipartisan legislation that was authored by Senator Crapo from
    Idaho, the Banking Committee Chair, and the goal of this bill
    was to provide targeted relief to community banks. The bill has
    a provision exempting banks under certain asset thresholds from
    the Volcker Rule. Again, you mentioned that in your answer. Can
    you get a little more in the weeds possibly about your vision
    for implementing this along with these new proposals that are
    coming forth?
        Mr. Berkovitz. Well, obviously, to the extent that Congress
    has specified the particular exemptions, obviously it is the
    obligation of the CFTC to do that. Where there is discretionary
    authority, I think the CFTC has to be very cognizant of those
    concerns that have been expressed, consider the costs and
    benefits of the various proposals, the impacts on liquidity in
    the markets and the compliance obligations, at the same time
    ensuring that there is compliance. So I would look very
    carefully at those.
        Senator Fischer. Would you agree that the legislation that
    was recently passed, though, is obviously beneficial, not just
    to community banks but to people in agriculture as well?
        Mr. Berkovitz. Absolutely, absolutely.
        Senator Fischer. When you look at that threshold we have
    for the assets.
        Mr. Berkovitz. Absolutely. Yes, Senator.
        Senator Fischer. Okay. Thank you.
        Thank you, Mr. Chairman.
        Chairman Roberts. Senator Heitkamp.
        Senator Heitkamp. I am the proud co-author of Senate bill
    2155, and we certainly think that community banks have, in
    fact, received the kind of relief that allows them to overcome
    the challenges of Volcker. We encourage additional discussion--
    or at least I do. I should not say ``we.'' So I look forward to
    hearing your concern.
        One of the questions that I have as we look at the
    commodity markets and as we look at the futures markets,
    obviously we are in a difficult time for a lot of commodities
    today as we look at what is happening with soybeans, what is
    happening with corn, whether it is disruption, as Amy pointed
    out, in the E15 rules or in allowing basically small refiners
    to get exemptions, therefore giving the volumes out the back
    door. This all has an effect on the corn markets. I think as we
    look at disruption in trade, that is going to now raise some
    concerns about how the futures markets are responding.
        I would just like to hear any comment that you have, Mr.
    Berkovitz, regarding how this trade war could, in fact, impact
    the work of this agency.
        Mr. Berkovitz. Thank you, Senator. I am aware that due to a
    variety of factors there have been significant declines in
    prices for a number of commodities. Weather and the trade
    issues have been reported as factors. I have not had the
    opportunity yet to look closely into this. I am basically
    reading--my knowledge is limited right now to what I am reading
    in the press. Certainly, if confirmed over at the agency, I
    would very much look into the markets. There is a Market
    Surveillance Unit at the CFTC which follows these, and I would
    get together with the experts at the CFTC and get on top of
    exactly what is happening in our commodity markets, why we are
    seeing these price declines in certain of these markets at this
    time.
        Senator Heitkamp. Well, I can tell you with some certainty
    we are seeing a price decline because we are losing markets.
    When local grain elevators in North Dakota will not take
    soybeans, that tells you something about what is happening with
    commodity prices. So I think it is important that we not find--
    I think people who would take advantage of this trade war into
    speculation beyond liquidity, I mean, there is a fine line
    between liquidity and speculation. We are always looking for
    it. It depends on--you know, if you look at the cattle markets,
    obviously I think the cattle markets are one of those markets
    you have been talking about, which is we see fewer entrants,
    and it is becoming more and more difficult to find liquidity in
    the cattle markets. Obviously we have had the Chairman out, who
    spent a lot of time, and I think he can brief you very well on
    what the concerns are of North Dakota cattlemen as it relates
    to the futures market.
        I want to turn to you, Mr. Hubbard, and thank you again,
    both of you, for your willingness to advance your careers,
    provide us with great public service. Mr. Hubbard, there are
    two issues that I want to address beyond all the regular ones.
    We spend a lot of time with the Forest Service by an anomaly of
    history. You have grasslands in my State, and that means the
    grazing associations are constantly running up against
    unnecessary and, I think, onerous kinds of regulations. One of
    the great problems they have right now is prairie dogs. I do
    not think we always feel like we have gotten the right kind of
    response from the Forest Service. I want you to take a look at
    the prairie dog issue. It literally will destroy your
    grasslands if we do not get out ahead of this. There are a lot
    of people who have, I do not know, some kind of attachment to
    prairie dogs. There is no rancher in North Dakota who has an
    attachment to prairie dogs. I will tell you that.
        The other question that I want to raise, and I raised this
    with your predecessor, and that is a case that I was involved
    in when I was Attorney General in North Dakota. It is a case
    involving section lines. The grasslands were reacquired in
    North Dakota. We argued, and I think with a great deal of
    persuasive legal reasoning, that when the Forest Service
    reacquired those, they reacquired those lands with the
    impediment or with the easements embedded into those lands. By
    a fluke of the Department of Justice arguing that we were not
    timely--and I can get into a whole discussion, but I do not
    have a lot of time, and I know the Chairman is going to beat me
    up here pretty quick. I would ask that you look at that case
    that was decided in the North Dakota District Court, that you
    try and do right by the State of North Dakota, that tried to do
    right by the Forest Service and the Federal Government, and it
    feels like they got burned by being patient. So if you could
    look at that section line case, and obviously we need to get
    out ahead of the concerns that our ranchers and our grazing
    associations have regarding prairie dogs.
        Thank you. Thank you both.
        Chairman Roberts. Thank you, Senator.
        Senator Hoeven?
        Senator Hoeven. Thank you, Mr. Chairman and Ranking Member,
    and thanks for having this hearing today. I also appreciate the
    witnesses being here.
        Mr. Hubbard, I want to start with you, and I would like to
    invite you--if Senator Heitkamp did not already do it, I want
    to invite you to North Dakota, and I hope you will come out and
    check out our grasslands.
        Mr. Hubbard. I would be happy to, Senator.
        Senator Hoeven. All right. Good. We look forward to that,
    and you will love it. You will love to meet our ranchers. It is
    a great group. They will have some good questions for you and
    some good suggestions for you on the grasslands.
        We have multiple uses on the grasslands, obviously, and so
    both our grazing associations and our grazers do a great job. I
    really do think you need to be out there on the ground and get
    a good understanding of the grasslands and meet with them and
    listen to them. You know, I am serious about you coming, and I
    guess my first question is: Will you commit to working with us
    to maintain and strengthen the relationship between the Forest
    Service and our grazers, our energy industry, and the other
    multiple uses on the grasslands?
        Mr. Hubbard. Thank you, Senator. Yes, I will commit to
    doing that. I think any of that public ownership has to be a
    good neighbor to everybody else, and I believe that comes face
    to face.
        Senator Hoeven. Good. I agree. I think you learn a lot by
    being there, and the other thing is you will build some
    relationships that will be helpful. There is no question about
    it.
        The next thing, prairie dogs is a good example. I do not
    know if you have been out there, but the prairie dogs are
    overrunning the place, and we need some help. So give me your
    thoughts on that.
        Mr. Hubbard. It comes back to being that good neighbor. We
    cannot ignore the impacts that those lands have on the
    neighbors and the community, the ranching community. So I am
    not familiar with specifically what is going on in North
    Dakota, but I would, if confirmed, be glad to come find out.
        Senator Hoeven. Well, see, these Montana prairie dogs come
    over.
        [Laughter.]
        Senator Hoeven. They are taking over the place, so we
    either need to do something, or if you can get them to go back
    to Montana, you follow me? I am teasing there a little bit.
        The same thing on infrastructure, we have a lot of energy
    development, so does eastern Montana. We have a great neighbor
    in Montana. We appreciate them. We are working on a lot of the
    same issues, so with prairie dogs, and another is energy
    development, and we need to build the infrastructure so you
    reduce and mitigate impacts, we capture natural--but to do
    that, we have got to get permitted. So talk to me about that,
    how you are approaching that issue.
        Mr. Hubbard. I would have to become more familiar with that
    issue, but I do know that that kind of process comes with
    Federal land and it sometimes is burdensome and slow, and
    streamlining it would be a priority.
        Senator Hoeven. Boy, you hit the right word there,
    ``streamlining.'' I mean, you nailed it there. It is slow. It
    is to everyone's benefit to streamline the process and get it
    done.
        Another is section lines. We have section lines--we have a
    section line law there that gives us access on the section
    line, which our farmers and the areas we farm, but our ranchers
    need as well to get access. So would you commit to working with
    us on the section line issue?
        Mr. Hubbard. Absolutely, I would.
        Senator Hoeven. All right. Then also on controlled burns.
    There you have just got to work with the locals. That is a
    commonsense thing. We need a real commitment that you are
    willing to work with the locals.
        Mr. Hubbard. Have to. Thank you, Senator, because there
    should not be no prescribed fire that all the neighbors are not
    aware of and accept.
        Senator Hoeven. Thank you. I appreciate it, Mr. Hubbard.
        Mr. Berkovitz, how do we make sure that CFTC works in a way
    for our--I mean, I think the big guys always find a way to make
    it work. How do we make sure that that end user, that farmer,
    that rancher, you know, the smaller ag companies who are trying
    to hedge their business practices, how do we make sure CFTC
    works for them, that it is transparent, that the costs are
    reasonable, and that they can do what they are trying to do,
    which is hedge their business?
        Mr. Berkovitz. Thank you, Senator. Absolutely, those are
    the fundamental objectives and the purpose of our commodity
    markets, indeed, as you have laid out, for the farmers and
    ranchers to be able to hedge in those markets. The CFTC needs
    to be and must remain vigilant and cognizant of those effects
    in everything it does. I pledge, if confirmed, I certainly will
    be receptive and open to agricultural producers and farmers and
    ranchers to their concerns, to meeting with them, to go
    visiting with them, to discuss their concerns. I will have an
    open-door policy and be receptive and open to that.
        Senator Hoeven. How do you make sure the credibility is
    there so, again, for that small end user that is just trying to
    manage business risk, he does not feel like these big hedge
    funds, these big firms, derivatives, and all these different
    things are manipulating or distorting markets? How do you make
    sure, A, they do not and that people can have confidence that
    they are not, that that is not happening?
        Mr. Berkovitz. Well, certainly there are a number of
    aspects to gain that confidence. Certainly being open and
    receptive to public comment is one of them, but also the
    enforcement program, when somebody violates the law,
    manipulates the market or there is fraud, to vigorously
    prosecute, regardless of size, and to enforce the law equally
    and fairly across all market participants.
        Senator Hoeven. Good. Thank you. I appreciate it.
        Chairman Roberts. Senator Donnelly.
        Senator Donnelly. Thank you, Mr. Chairman, and I want to
    thank the witnesses for being here.
        Mr. Hubbard, when people think of Indiana agriculture,
    conventionally everybody thinks about corn and soybeans. Among
    our most valuable industries in the State is hardwood
    production. We are home to the Hoosier National Forest, which
    is a source of great pride to our State. Our forests face a
    little bit different challenge than those facing the national
    forests out West. Climate change is bringing new pests and
    making management more difficult. Our hardwood production is
    also done primarily on private and State lands, but the Forest
    Service's expertise and policies are really impactful.
        Can you commit to me that protecting the Hoosier National
    Forest and making sure that the Forest Service is responsive to
    the unique needs of Indiana's forests is an important part of
    the mission that you will be taking on?
        Mr. Hubbard. Thank you, Senator. Without a doubt, I can
    commit to that. I spent too much time as a State forester not
    to appreciate that, and with the Forest Service, too. So I
    think I understand both worlds.
        Senator Donnelly. Well, when you do have a chance--I know
    you will be busy getting started, but when you do have a
    chance, we would love to have you come out and go for a hike
    with us.
        Mr. Hubbard. I would be pleased to.
        Senator Donnelly. That would be great. We will bring the
    water.
        Mr. Berkovitz, I have been advocating for a long, long time
    that position limits are an incredibly important tool in the
    toolbox of CFTC to be able to prevent market manipulation. We
    are now approaching a decade after the financial crisis. CFTC
    has yet to finalize a position limits rule as required by
    Congress. Will you commit to working on finalizing a good
    position limits rule in a timely fashion?
        Mr. Berkovitz. Absolutely, Senator. I agree that it is
    essential that the CFTC complete that rulemaking in a timely
    manner, and if confirmed, you have my commitment to work with
    my fellow Commissioners toward that goal.
        Senator Donnelly. Great. What other issues do you consider
    priorities for the CFTC to address in the near future?
        Mr. Berkovitz. I think in the near future there are several
    additional rulemakings that have been proposed. There is the
    rulemaking on the de minimis threshold, how large somebody is
    before they have to register as a swap dealer. The public
    comment period closes on that next week, I believe, and I
    believe it is important for the CFTC to complete that
    rulemaking in a timely manner.
        I believe it is important for CFTC to be ahead of the curve
    on the cryptocurrency issue. There are significant regulatory
    issues, market integrity issues associated with cryptocurrency,
    and I think it is important that the CFTC be vigilant in that
    area as well.
        Senator Donnelly. Thank you to both of the witnesses. Thank
    you to your families for your willingness to serve our country.
    Thanks.
        Mr. Chairman, thank you.
        Chairman Roberts. Thank you, Senator.
        We now have the distinguished Chairman of the Conservation,
    Forestry, and Natural Resources Subcommittee, whose strong
    interest and contribution with regards to forest management is
    welcome by all members of the Committee. Senator Daines.
        Senator Daines. Thank you, Chairman Roberts, Ranking Member
    Stabenow, and again, I appreciate your leadership on this
    Committee, the strong vote for the farm bill that got out of
    here, as well as translating to a strong vote on the Senate
    floor. That is not easy, and it is the steady hand of
    leadership, the two of you working together----
        Chairman Roberts. That vote again, Senator?
        Senator Daines. What is that?
        Chairman Roberts. What was that vote again?
        Senator Donnelly. Mr. Chairman, I think it was 86 in favor
    on the floor, and we had--86 in favor, yes.
        Chairman Roberts. Two were out that would have voted for
    it.
        [Laughter.]
        Senator Daines. In Montana high school basketball, they
    declared the mercy rule and called the game early in that
    situation, so that is a good score.
        Senator Donnelly. Well, I think if your record is 86 and
    11, you are in first place in baseball, too.
        Chairman Roberts. All right.
        Senator Daines. Second, before I speak with the witnesses,
    I want to thank you for your comments earlier regarding forest
    management. Your visit to Montana, seeing it firsthand, Mr.
    Chairman, was greatly appreciated. We have got a lot of work to
    do there, and I appreciate the support we have had in this
    Committee, the Agriculture, Nutrition, and Forestry Committee.
    Thank you.
        Mr. Berkovitz and Mr. Hubbard, congratulations on your
    nominations, and thank you for your willingness to serve,
    truly.
        Mr. Hubbard, I very much enjoyed our recent visit regarding
    your nomination to be the USDA Under Secretary for Natural
    Resources and Environment. This is really important for
    Montana. This position oversees the management of approximately
    17 million acres. With all due respect to the Senator from
    North Dakota, we tell North Dakota jokes, and they tell Montana
    jokes. I think that is bigger than North Dakota, but I am not
    sure. That is probably not true.
        Anyway, unfortunately, chronic litigation, insects,
    disease, wildfire, and other management issues continue to
    impede the Forest Service from fully carrying out its true
    multiple-use mission. As we speak, the fire season is just
    getting started in Montana, with significant wildfire potential
    expected for the remainder of the summer, despite higher than
    average snowpack, good spring rains. That just generates more
    grass and fuel, and we are going to probably have a tough fire
    season, it looks like, in the northern Rockies, particularly
    Montana.
        I am fighting for three buckets of reform, Mr. Hubbard:
    reducing red tape, combating fringe litigation, and increasing
    the partnership between the Forest Service and State foresters
    in our national forests. While recent legislation included some
    good reforms, I want to say very clearly that Congress should
    do and must do much, much more.
        Mr. Hubbard, the Forest Service indicates it takes an
    average of 3 to 4 years to prepare an EIS for a major Federal
    action that significantly affects the environment. Those are in
    quotes, ``major Federal,'' ``significantly affects.'' Further,
    it takes an average of 2 years to prepare an environment
    assessment for less impactful decisions. One rough estimate
    from the Forest Service indicated the agency spends nearly $1
    million every day to carry out the agency's environmental
    analysis.
        Do these timeframes seem reasonable to you? Do you support
    efforts to streamline the environmental review process while at
    the same time retaining very important public input?
        Mr. Hubbard. Thank you, Senator, for all of that. The
    public input is critical, and the western movement toward more
    collaboratives in helping to resolve that has proven useful.
    Those timelines are frustrating. Those timelines to people who
    put that much work in coming to a compromise agreement is--it
    is just not right. So, no, I do not consider those timelines
    acceptable, and, yes, I think some streamlining would be
    necessary, still protecting that public involvement.
        Senator Daines. I want to shift gears and talk about the
    cottonwood new information requirement. The Ninth Circuit has a
    disastrous cottonwood decision ruling that triggers plan-level
    consultation requirements when ``new information is made
    available,'' which occurs constantly. This results in more red
    tape and makes the Forest Service vulnerable in the courtroom
    all for a negligible conservation benefit. In fact, since
    January 2016, there have been at least six lawsuits involving
    ESA new information claims. In the same time period, the Forest
    Service received at least ten other notices of intent to sue,
    raising ESA new information as an issue in land management
    decisions. Unfortunately, the recent legislation that we passed
    did nothing to address this component of the cottonwood
    problem.
        Mr. Hubbard, would you work with me to address this new
    information loophole?
        Mr. Hubbard. Thank you, Senator. Yes, sir, I would work
    with you, if confirmed, because you have made some progress,
    but there is still some work to be done.
        Senator Daines. Keep in mind with this cottonwood decision,
    in the last Congress we had the Obama Administration on board,
    we had bipartisan support. The problem is we have got a little
    bit of a moving target here as well on cottonwood. Thank you
    for your willingness to move there.
        Mr. Chairman, could I ask another question? I am over my
    time, but----
        Chairman Roberts. Certainly.
        Senator Daines. Okay. Thank you. I want to talk about pilot
    arbitration. In Montana there are currently 29 timber projects
    involving 230 million board feet of lumber, timber. I grew up
    in the housing business. That is a lot of houses. They are now
    currently impacted by lawsuits. In addition, there are 24
    forced restoration projects in Montana which have been halted
    by injunctions. An arbitration pilot would ensure that we get
    swifter resolution to these legal challenges, not to stop the
    legal challenge but just try to get it done more quickly and
    more cost-effectively.
        Mr. Hubbard, do you support establishing a pilot program, a
    test program, to resolve disputes regarding forest management
    projects through arbitration rather than the courtroom?
        Mr. Hubbard. Senator, I, if confirmed, would want to work
    on that issue. I need to know more about it, and I need to
    figure out what all the aspects are. That is part of one way of
    streamlining some process that gets work done, and, yes, I
    would be interested in----
        Senator Daines. Thank you. Well, as I wrap up, Mr. Hubbard,
    you have been a champion of the Good Neighbor Authority. Thank
    you. You have been a champion since its inception. You have
    been a strong supporter facilitating efforts to cross ownership
    boundaries. In States like Montana, it is important when we
    share a fence line, Good Neighbor is very important so our
    national forests are better managed. I very much look forward
    to your much-needed leadership, as it were, to achieve all
    three buckets of reforms that I have mentioned. The resiliency
    of our national forests and the future of our wood products
    work force in places like Montana are at stake.
        Thank you.
        Chairman Roberts. Senator Smith.
        Senator Smith. Just in time. Thank you very much, Chair
    Roberts and Ranking Member Stabenow. Thanks to both of you for
    being here today and for your willingness to serve. I very much
    appreciated you taking the time to come by my office in the
    last week so we had a chance to visit a little bit in person.
        Mr. Hubbard, I would like to ask a question related to the
    National Environmental Policy Act. In the omnibus spending bill
    passed in March, the Forest Service granted a new categorical
    exclusion from the National Environmental Policy Act for
    projects that removed high-risk vegetation from areas to
    mitigate wildfire. Just a few months later, the White House
    Council on Environmental Quality announced that they were
    looking to revise NEPA in its entirety with the goal of
    streamlining and speeding up the review process.
        So, Mr. Hubbard, is it your view that part of your mission
    as Under Secretary for Natural Resources and Environment would
    be to promote conservation and sustainability in our Federal
    forests?
        Mr. Hubbard. Thank you, Senator. Of course it is, and----
        Senator Smith. You and I talked about this. I appreciate
    that.
        Mr. Hubbard. Sustainability is essential, so all of our
    decisionmaking has to be based on that premise. Can we do
    better at that? I would be happy to explore ways.
        Senator Smith. Do you think--what is your view--is there
    evidence that would suggest that there is a need for further
    exemption from environmental protections for projects in
    Federal forests? Is there a need for that, do you think?
        Mr. Hubbard. I believe that the need is in critical areas
    where projects need to proceed, such as wildfire risk reduction
    around a community, and when the community is taking action and
    the private lands are taking action and the Federal land is
    holding it up, so situations like that. That is why I believe
    it is important for the Forest Service to be talking to the
    State about what those priorities are and where the action is
    most important to be taken and then finding ways to do that.
        Senator Smith. I really appreciate that sentiment. You and
    I talked about this in my office, the importance of having good
    consultation and good communications and a strong, robust
    public comment period. So I will look forward to working with
    you on that. I appreciate that very much.
        Related to that, a few of us on this Committee have the
    privilege of also sitting on the Indian Affairs Committee,
    including Indian Affairs Chair Hoeven, who maybe you had a
    chance to talk with as well. When we met last week in my
    office, we talked about how important it is that the Federal
    Government conduct the proper Government-to-Government tribal
    consultation. It is just such an important responsibility.
        Could you just tell us a little, talk a little bit more
    about that and how you see that consultation process?
        Mr. Hubbard. Thank you, Senator. The tribes feel strongly
    about that, as you well know, and so do I. It is Government-to-
    Government. It is a sovereign situation that needs to be
    respected, and so I fully subscribe to the consultation
    process.
        I also subscribe to the collaboration that can be done with
    the tribes because they do a good job of managing their lands.
        Senator Smith. I thank you for that. Of course, the Senate
    farm bill has many good provisions related to the Forest
    Service-tribal relationships and protecting that, including the
    Good Neighbor Authority for tribes. So I appreciate that very
    much.
        The last thing I would just like to touch on, and we also
    spoke about this in my office. As you know, nearly half of the
    Chippewa National Forest in my State of Minnesota is within the
    Leech Lake Band of Ojibwe Reservation, and I have introduced a
    bill to authorize a land transfer that would return ownership
    of about 11,700 acres of that land in the Chippewa National
    Forest back to Leech Lake. It was wrongly in error committed--
    you know, done incorrectly. We want to fix this through some
    special secretarial transfer process. We talked a little bit
    about this bill, and I wanted to just see if--you probably have
    not had a chance to look at it yet, but I very much look
    forward to working with you on that one if you have any
    thoughts on that.
        Mr. Hubbard. If confirmed, I would be happy to work with
    you on that.
        Senator Smith. Thank you very much. That is very important
    to us, and I appreciate your partnership on that.
        Thank you very much, Mr. Chair. I yield back my time.
        Chairman Roberts. Thank you. Senator.
        Well, Coop, you are up.
        [Laughter.]
        Senator Thune. Thank you, Mr. Chairman. It is not even high
    noon yet, so we are here early. I appreciate you and Ranking
    Member Stabenow holding this hearing. I want to thank our
    nominees for their willingness to serve and the families that
    support that service. Thank you all for being here as well.
        Mr. Hubbard, we have approximately 80 million acres of
    trees that are projected to be at risk of widespread mortality
    because of insects and disease, and despite recognition of the
    dire need to increase on-the-ground forest management
    activities, increases of timber sold through timber sales and
    stewardship projects to address these concerns have been slight
    and at current pace will take hundreds of years to treat those
    already identified at-risk areas.
        So the question is: What types of changes are needed to
    fully treat at-risk acres and to restore our national forests?
        Mr. Hubbard. Thank you, Senator. I will come back to the
    notion that the Forest Service knows where their treatment
    needs are and where the legal authorities to allow that kind of
    a treatment. So we are not looking at wilderness areas. We are
    looking at areas that need that active management. I could not
    agree more that we are behind and need to accelerate that pace
    and get more work done.
        I also believe that that can be done, that if the Forest
    Service provides the focus to the field leadership, they will
    respond. They need that kind of direction.
        Are there obstacles? Of course, there are, but where I
    would start is the conversation with the State to discuss the
    priorities. Where should we make our investments? Where is it
    most important? Where does it mean different things--wildfire
    protection, economy, sustainability, resilience, all of those
    issues? The Federal agencies have their view. The States have
    their view. I want to compare those views and decide where we
    should get that work done and then use the tools available to
    us to go after it.
        Senator Thune. Good. Well, and on that point, collaborative
    processes in the Black Hills of South Dakota and Wyoming have
    been productive and resulted in numerous success stories in the
    battle against the mountain pine beetle, as a case in point.
    Those collaborative efforts continue with a new strategy for
    resilient forests across all ownerships in the Black Hills and
    have helped inform a new Black Hills National Forest timber
    management project.
        However, as is seen in too many other planning efforts,
    objections have been filed by outside parties, and the Forest
    Service may face litigation on the project in the near future.
        What can the Forest Service do to move more projects
    forward more quickly? How can we in Congress help that?
        Mr. Hubbard. Thank you, Senator. First of all, I think the
    Forest Service has to respect the processes that it has under
    law, and they will, of course. I think sharing that decision
    space, bringing in the stakeholders through the collaborative
    process and agreeing on what needs to move forward, having that
    kind of sit-down comparison with the State to decide what their
    priorities are, and, of course, in all those considerations can
    we get this project done would be a factor. I think we need to
    decide where we can get those projects done and under what
    authority we can get those done and focus our efforts there.
        Senator Thune. Well, thanks, and I hope that is, as you
    approach this, sort of the plan going forward, because I just
    think that when you get that kind of collaboration that we have
    seen in the Black Hills, for example, where you have State
    authorities and Federal and private sector all sort of working
    together to address some of these big problems, you want to
    encourage that, not discourage it. Obviously, it is inevitably
    the case you are going to end up in litigation. My hope would
    be that we can see more of that, not less, and that as you
    approach your work, that you will encourage more of that.
        Mr. Berkovitz, we have heard complaints, especially from
    our livestock producers, that the Chicago Mercantile Exchange,
    or CME, is not performing as it should, which they say is
    negatively impacting cattle prices. Could you just kind of talk
    generally about your thoughts on that subject?
        Mr. Berkovtiz. Thank you, Senator. I think that contract is
    one contract that the CME, as you have noted, has been working
    on and certainly, if confirmed in this position at the CFTC, I
    would look into that and work with the CFTC to work with the
    CME to make sure that that contract performs correctly and that
    it can be used for hedging appropriately.
        Senator Thune. With your future potential oversight of CME
    at CFTC and based on what you now know, are there any CME
    activities that concern you regarding lack of transparency or
    price manipulation?
        Mr. Berkovitz. Thank you, Senator. That is something that I
    would have to look into if confirmed at the agency. In terms of
    issues like that, I think it would be appropriate to look for
    it when I am over at the agency.
        Senator Thune. Okay. Well, and when you get there--and we
    expect that you hopefully soon will--I hope that you will
    address those concerns. Obviously, to have confidence in
    markets, there has got to be optimum levels of transparency,
    and anything that undermines that I think is very harmful to
    the overall markets and to the people's belief that they have
    got a fair marketplace.
        Mr. Berkovitz. Thank you.
        Senator Thune. So my time has expired, Mr. Chairman. I will
    submit a couple of questions for the record. Thank you.
        Chairman Roberts. I thank the Senator.
        That is going to conclude our hearing today. I thank the
    nominees for taking time to address this Committee and to
    answer the Committee's questions. It is clear, at least to the
    Chairman--Mr. Berkovitz, how old is Eli?
        Mr. Berkovitz. Eli is 17, Senator.
        Chairman Roberts. Well, it just appeared to me that--since
    I am Chairman, obviously I paid attention to each and every
    word of the Senators who have asked you questions and to your
    responses, and I noticed that Eli was paying very close
    attention as well.
        [Laughter.]
        Mr. Berkovitz. Thank you, Eli.
        Chairman Roberts. That is rather unique in the
    circumstances. I think Eli and myself are the only two that can
    say that.
        [Laughter.]
        Senator Thune. We always pay attention when you are
    talking, Mr. Chairman.
        Chairman Roberts. It is very clear you have all exhibited
    you are qualified to join the administration in the roles you
    have been nominated to at the CFTC and the Department of
    Agriculture. We learned a great deal today from the nominees.
    Your testimony provided us significant information and a solid
    basis upon which to report you out of Committee.
        Per our rules, we cannot do so today but I assure you we
    will endeavor to do so in the very near future.
        To that end, I would request my fellow members, if they
    have any additional questions for the record, that they be
    submitted to the Committee clerk by 12 noon tomorrow, July
    25th. We look forward to receiving your responses and to
    further taking action on your nominations. We need to get you
    both on board.
        The Committee is adjourned.
        [Whereupon, at 11:30 a.m., the Committee was adjourned.]

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