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88–674 PDF 2015

EPA’S EXPANDED INTERPRETATION OF ITS 

PERMIT VETO AUTHORITY UNDER THE 

CLEAN WATER ACT 

(113–76) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

WATER RESOURCES AND ENVIRONMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

JULY 15, 2014 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

STEVE SOUTHERLAND, II, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

STEVE DAINES, Montana 

TOM RICE, South Carolina 

MARKWAYNE MULLIN, Oklahoma 

ROGER WILLIAMS, Texas 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

DAVID W. JOLLY, Florida 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

TIMOTHY J. WALZ, Minnesota 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

(II) 

SUBCOMMITTEE ON WATER RESOURCES AND ENVIRONMENT

BOB GIBBS, Ohio, Chairman 

DON YOUNG, Alaska 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas, 

Vice Chair 

DANIEL WEBSTER, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

STEVE DAINES, Montana 

TOM RICE, South Carolina 

MARKWAYNE MULLIN, Oklahoma 

MARK MEADOWS, North Carolina 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

DAVID W. JOLLY, Florida 

BILL SHUSTER, Pennsylvania (Ex Officio) 

TIMOTHY H. BISHOP, New York 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

LOIS FRANKEL, Florida 

ELEANOR HOLMES NORTON, District of 

Columbia 

EDDIE BERNICE JOHNSON, Texas 

GRACE F. NAPOLITANO, California 

STEVE COHEN, Tennessee 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

NICK J. RAHALL, II, West Virginia 

(Ex Officio) 

(III) 

(V) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... vi 

TESTIMONY 

William L. Kovacs, senior vice president, environment, technology and regulatory affairs, U.S. Chamber of Commerce ........................................................ 4 

Harold P. Quinn, Jr., president and CEO, National Mining Association ........... 4 

Nick Ivanoff, senior vice chairman, American Road and Transportation Builders Association ...................................................................................................... 4 

Leah F. Pilconis, Esq., senior environmental advisor, Associated General Contractors of America ............................................................................................... 4 

Richard O. Faulk, senior director, Initiative for Energy and the Environment, 

George Mason University School of Law ............................................................ 4 

Patrick Parenteau, professor of law, Vermont Law School .................................. 4 

PREPARED STATEMENT SUBMITTED BY MEMBER OF CONGRESS 

Hon. Nick J. Rahall II, of West Virginia ............................................................... 44 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

William L. Kovacs .................................................................................................... 46 

Harold P. Quinn, Jr. ................................................................................................ 57 

Nick Ivanoff .............................................................................................................. 122 

Leah F. Pilconis, Esq. .............................................................................................. 127 

Richard O. Faulk ..................................................................................................... 137 

Patrick Parenteau .................................................................................................... 142 

SUBMISSION FOR THE RECORD 

Hon. Donna F. Edwards, a Representative in Congress from the State of 

Maryland, request to submit written statement of Melissa Samet, senior 

water resources counsel, National Wildlife Federation .................................... 24 

ADDITION TO THE RECORD 

National Stone, Sand and Gravel Association, written statement ...................... 150 

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viii 


Insert offset folio 3 here 88674.003
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Insert offset folio 4 here 88674.004
(1) 

EPA’S EXPANDED INTERPRETATION OF ITS 

PERMIT VETO AUTHORITY UNDER THE 

CLEAN WATER ACT 

TUESDAY, JULY 15, 2014 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON WATER RESOURCES AND

ENVIRONMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10 a.m., in Room 

2167, Rayburn House Office Building, Hon. Bob Gibbs (Chairman 

of the subcommittee) presiding. 

Mr. GIBBS. Good morning. The Subcommittee on Water Resources and Environment of the Committee on Transportation and 

Infrastructure will come to order. 

A couple of housekeeping items. First, I ask unanimous consent 

that the hearing record be kept open for 30 days after this hearing 

in order to accept other submissions of written testimony for the 

hearing record. 

Are there any objections? 

[No response.] 

Mr. GIBBS. Hearing none, so ordered. 

Today we have one panel. I welcome the witnesses. I will start 

off here with my opening statement. 

I again would like to welcome everybody to the hearing today. 

We are here meeting to examine the EPA’s expanded interpretation 

of its permit veto authority under the Clean Water Act. 

Today we will hear from multiple stakeholders on the potential 

economic and job creation impacts of the EPA’s new interpretation 

of their veto authority under the Clean Water Act. The Army Corps 

of Engineers has the lead responsibility for implementing the Wetlands Dredge and Fill Permitting Program under section 404 of the 

Clean Water Act. 

Under the Wetlands Permitting Program, the Corps is responsible for receiving and reviewing section 404 permit applications 

and issuing wetland permits. Section 404 assigns the EPA a limited review role in regard to section 404 permits. EPA may comment on section 404 permit applications during an interagency review period for each permit, and EPA also has the limited authority under section 404(c) to prevent the Corps from issuing a permit 

to authorize a particular disposal site or to restrict the terms of the 

permit, if the EPA determines that the permit would result in certain unacceptable environmental effects. 

2 

Consistent with this process, in 2007, the Corps issued a section 

404 permit for the Spruce No. 1 Mine project in West Virginia. 

Prior to the issuance of the permit, the project applicant conducted 

an extensive 10-year environmental review in which EPA fully participated and agreed to all of the terms and conditions included in 

the authorized permit. 

Subsequently, the mine operated pursuant to and in full compliance with the section 404 authorization and made substantial investments in the project in reliance on the permit. 

However, in 2009, the EPA unilaterally changed the rules of the 

game after the fact and took steps to revoke parts of the Spruce 

project issued permit even though they were in full compliance 

with the conditions of the permit. More than 3 years after the permit’s issuance, EPA finalized the permit revocation in early 2011, 

halting development of the mine, jeopardizing jobs and the substantial investments and injected uncertainty into any industry impacted by section 404 permitting. 

After the permit holder challenged EPA’s permit revocation action in the Federal courts, the U.S. Supreme Court has decided not 

to review the 2013 Appeals Court decision that the EPA did not exceed its power when it stripped the Spruce Mine of its 404 permit. 

Revoking a permit after such has been issued and when no violations of the permit—I want to make that key—no violations of the 

permit have occurred is unsettling. It is an arbitrary and irresponsible way for Government to act. 

The EPA has not only asserted itself after a permit has been 

issued. It has recently been preempting potential applicants. A recent example of the EPA perhaps illegally exercising its veto authority before someone even applies for a 404 permit is in the Pebble Mine, Bristol Bay, Alaska project. 

In this case, without ever receiving an application describing the 

proposed action, the EPA has declared that no permit, regardless 

of conditions and potential public benefits, can ever be issued in 

that designated area. 

I consider this regulatory overreach to be a fundamental property 

rights issue. With this new and broad interpretation of its powers, 

EPA is setting itself up as the ultimate manager of land use and 

economic development in the Nation. This is an example of Government that thinks it has no limitations on its power. 

The EPA’s newly expanded interpretation has the possibility of 

becoming a very dangerous precedent by opening the door for revoking not just 404 permits, but perhaps other permits as well. 

This new action by EPA will affect both public and private development and raises the question: what does it really mean to get a 

permit? What does it mean to get a final decision from the Federal 

Government? 

If an agency is given the right to unilaterally revoke an already 

issued permit, then nothing can ever be considered final. The 

issuance of a Federal permit should come with the certainty that 

the activity can go forward unencumbered, but within the bounds 

of the permit, particularly those activities on private lands. This no 

longer seems to be the case, and it is going to have a stifling effect 

on not just mining operations in Appalachia but on economic development nationwide. 

3 

I look forward to the testimony from our witnesses today, and at 

this time I yield to Mr. Bishop for a statement or any comments 

he may have. 

Mr. BISHOP. Thank you very much, Mr. Chairman. I appreciate 

you holding this hearing, and I appreciate you yielding to me. 

I recognize that there is a difference of opinion among Members 

of this panel on the activities of the executive branch to protect 

public health and the environment. However, I am troubled by the 

tone taken by this Congress in carrying out its oversight activities 

of the current administration. Too often these days we have let the 

rhetoric surrounding controversial issues overtake the reality, and 

this seems especially true when it comes to talking about actions 

of the Corps of Engineers and the Environmental Protection Agency. 

Today’s hearing is an example of this. The title of this hearing 

talks about the EPA’s expanded interpretation of its Clean Water 

Act authority, as though this agency is creating new authority by 

its actions where none previously existed. 

Our former Senator from the State of New York, Daniel Patrick 

Moynihan once said everyone is entitled to his own opinions, but 

not his own facts. And so as we begin this hearing, it is important 

that we all have the same set of facts from which to work. 

Here are the facts. Fact No. 1, Congress enacted the Clean Water 

Act in 1972 and provided the Corps and the EPA complementary 

roles in the implementation of the Federal section 404 permit authority over discharges of dredged or fill material at specific sites 

in waters of the United States, including the adoption of the EPA’s 

404(c) oversight responsibility. 

Fact No. 2, since enactment of the Clean Water Act, the Corps 

of Engineers has processed on average 60,000 section 404 permit 

applications per year, resulting in over 2.5 million approved permits since 1972. 

During that same period of time, the Environmental Protection 

Agency has exercised its section 404(c) authority a total of 13 

times, 13 times in 21⁄2 million permit applications. 

Fact No. 3, of the 13 actions taken by the EPA under section 

404(c) since 1972, 12 were under Republican administrations and 

only 1, the 1 that we are discussing this morning, was under a 

Democratic administration. I will note that 8 of the 12 under Republican administrations were during the Presidency of Ronald 

Reagan. 

Fact No. 4, of the 13 times EPA has previously exercised its section 404(c), 3 of these 404(c) actions were taken after a Corps of 

Engineer permit was already issued, 2 under Republican administrations and once under a Democratic administration. An additional two 404(c) actions were taken in the time period before a 

Clean Water Act permit was issued by the Corps, both under a Republican administration. 

Fact No. 5, one of the projects that was blocked by a 404(c) action 

of a Republican administration was finally resolved and approved 

by this current administration. 

So as history has shown, the Environmental Protection Agency 

of both Republican and Democratic administrations has used its 

congressionally authorized oversight authority over the section 404 

4 

program in a limited and relatively consistent manner. To characterize the Agency’s recent actions related to section 404(c) as an expanded interpretation is simply not supported by the facts or the 

historical record. 

Now, it is fair for Members to have a difference of opinion on 

how the Corps and the EPA have carried out their Clean Water Act 

responsibilities. However, when we use that difference of opinion to 

mischaracterize or, worse, to demonize the intentions of these agencies, I believe we fail to uphold our larger congressional responsibilities. 

In my view, the EPA seems to have exercised its section 404(c) 

authority since 1972 with restraint, acting only when the activities 

in question would have had an unacceptable adverse effect on the 

local environment, the very test that Congress established for the 

agencies back in 1972. 

While I recognize that those who may have been affected by 

these actions may have a different view, I believe that these groups 

will have a difficult time in arguing that the Federal agencies have 

abused or expanded this authority over the years. 

I thank all of the witnesses for being here today. I look forward 

to your testimony. 

I yield back. Thank you. 

Mr. GIBBS. Other Members may submit written testimony for the 

record. 

Today I welcome the witnesses. Our first witness is Mr. William 

Kovacs. He is senior vice president, environment, technology and 

regulatory affairs of the U.S. Chamber of Commerce. 

And then we have Mr. Harold Quinn, Jr., president and CEO of 

the National Mining Association; Mr. Nick Ivanoff, senior vice 

chairman of the American Road and Transportation Builders Association; Ms. Leah F. Pilconis, senior environmental advisor to the 

Associated General Contractors of America; Mr. Richard Faulk, 

senior director, Initiative for Energy and the Environment, George 

Mason University School of Law; and Patrick Parenteau, professor 

of law at the Vermont Law School. 

Welcome all, and we will start off with Mr. Kovacs. 

The floor is yours. 

TESTIMONY OF WILLIAM L. KOVACS, SENIOR VICE PRESIDENT, ENVIRONMENT, TECHNOLOGY AND REGULATORY AFFAIRS, U.S. CHAMBER OF COMMERCE; HAROLD P. QUINN, 

JR., PRESIDENT AND CEO, NATIONAL MINING ASSOCIATION; 

NICK IVANOFF, SENIOR VICE CHAIRMAN, AMERICAN ROAD 

AND TRANSPORTATION BUILDERS ASSOCIATION; LEAH F. 

PILCONIS, ESQ., SENIOR ENVIRONMENTAL ADVISOR, ASSOCIATED GENERAL CONTRACTORS OF AMERICA; RICHARD O. 

FAULK, SENIOR DIRECTOR, INITIATIVE FOR ENERGY AND 

THE ENVIRONMENT, GEORGE MASON UNIVERSITY SCHOOL 

OF LAW; AND PATRICK PARENTEAU, PROFESSOR OF LAW, 

VERMONT LAW SCHOOL 

Mr. KOVACS. Thank you, Chairman Gibbs and Ranking Member 

Bishop, for inviting me here to discuss EPA’s expanded interpretation of the permanent veto authority under section 404 of the Clean 

Water Act. 

5 

I do recognize—— 

Mr. GIBBS. Mr. Kovacs, can you pull your microphone a little 

closer? 

Mr. KOVACS. Oh, sure. 

Mr. GIBBS. Is it on? 

Mr. KOVACS. Yes. 

Mr. GIBBS. OK. 

Mr. KOVACS. While I do recognize that EPA permanent authority 

under section 404(c) has been upheld by the DC Circuit, I would 

like to focus on the practical implications of EPA’s expanded new 

policy by discussing first the real work impacts of EPA’s use of a 

retroactive veto policy authority and, second, the problems that 

arise when an agency, such as an EPA but there are others, 

stretches its authority under broadly written statutes enacted decades ago, many of which have not been formally reauthorized by 

Congress in decades. 

In the practical world, securing a permit, and I think this is our 

biggest problem with the retroactive veto, is a multiyear effort involving complex studies, engineering reports, compliance with over 

30,000 pages of regulations covering air, water, waste, endangered 

species, and environmental impact statements. When a permit is 

granted, the developer has complied with literally every regulatory 

detail. The developer goes through this torturous process to develop 

a significant project with the expectation that the project will add 

economic value to the community, create jobs, and increase shareholder value. 

The developer enters the permitting process believing that once 

it proves it can meet every condition imposed by the Government, 

that it will hold the permit for a specific number of years to both 

complete and operate the project. 

EPA’s retroactive veto means that a permit no longer is granted 

for a specific period of time. Rather, a permit has value only as 

long as the Administrator believes that it should not be revoked. 

Under EPA’s new policy, a developer, in effect, only applies for a 

contingent permit, one that might be revoked whenever the Administrator desires. 

And I raise this in the context of the retroactive authority is completely unnecessary in this environment. First of all, should the developer violate any condition of the permit, EPA has massive administrative, civil, and criminal enforcement authority, emergency 

powers, injunctive relief, and it can even revoke the State’s authority to retain full jurisdiction over the project. 

So a retroactive permit authority creates such great uncertainty 

in the permitting process the developers will be extremely cautious 

before risking millions of dollars when needed to apply for a permit 

that they think can be revoked. And I say that because it is millions of dollars to get one of these permits. 

And while the DC Circuit’s decision invoked a coal mine, and 

that is a very controversial issue, the fact is that the retroactive 

permit authority can be used in any 404 permit, including ports, 

pipelines, waterways, highways, airports, housing authorities, industrial facilities, and even big box stores. So we are moving into 

a path that might be much more disruptive than the political controversy over a coal mine. 

6 

But EPA’s retroactive permit authority is only one of the many 

ways in which the Agency is unilaterally expanding its regulatory 

authorities. The claim of retroactive authority is merely the latest. 

In the case of Pebble Mine, which the chairman mentioned, in 

Alaska, the developer spent over one-half billion dollars and it has 

not even yet been able to apply for a permit. In this situation, the 

activists petitioned EPA requesting that the permit be preemptively denied before even Pebble could apply for it. 

To appease the activists, EPA undertook a watershed assessment 

using outdated models and operations of a mine. While EPA has 

not yet preemptively prohibited the permit application, it has formally started the process to prohibit it. 

So we have a combination right now of EPA asserting a retroactive authority on a permit, a prospective authority on a permit, 

and when EPA moves forward with its ‘‘waters of the U.S.’’ and 

this greatly expanded area that they are going to have 404 jurisdiction over, it literally places most of the land mass that is near 

water in some kind of restriction that they do not have now. 

Couple these powers with EPA’s other powers under other statutes, and then add into that Fish and Wildlife’s efforts in expanding the habitat for endangered species, and the result is the Government is developing policies that will actually regulate most of 

the land in the United States. This type of regulatory structure is 

literally shutting down our ability to build infrastructure or large 

industrial projects anywhere. This is serious, and the Nation will 

not begin to grow and create jobs until we can start building again. 

And I want to finish with the fact that several years ago we did 

a project called Project, No Project, and we just looked at the number of facilities trying to get permits in March of 2010, and there 

were 351 private facilities that wanted to put in almost $600 billion 

worth of investment, and they could not get permits. The permitting process is probably one of the most important things Congress 

can look at. 

Thank you. 

Mr. GIBBS. Thank you. 

Mr. Quinn, welcome. 

Mr. QUINN. Good morning. Thank you, Mr. Chairman, Ranking 

Member Bishop, and members of the subcommittee. Thank you for 

the invitation to appear today and testify, and we appreciate your 

efforts and time to look at this important questions about restoring 

predictability and certainty with the Clean Water Act permitting 

process. 

The United States has several advantages when it comes to attracting capital for investments need to grow and sustain our economy. We have deep capital markets, a global leading workforce in 

terms of productivity and skills, a strong platform for innovation 

and technology development, a world leading transportation infrastructure to get products to market quickly, and low-cost and reliable energy, though I must say even that may be in jeopardy now 

with recently policies that we saw bring our electric grid close to 

the edge of breaking this past winter. 

The point being is that all of these advantages can be erased 

with regulatory policies that create delays and uncertainty for capital intensive projects. Let me just speak to the mining industry. 

7 

Finding and developing our mineral resources in this country requires substantial investments, hundreds of millions and even billions of dollars. As a consequence, regulatory certainty is an essential and a highly valued commodity. Lengthy delays and regulatory 

do-overs and permitting decisions compromise the commercial viability of projects. They increase costs, reduce the net present value 

of projects, and impair potential financing sources. 

So the efficiency and predictability of the permitting process matters in decisions about where to invest. The choice could be stark: 

invest in countries with a predictable pathway for receiving permits within 2 or 3 years, or perhaps the United States where it 

may take three or five times longer. 

Over the years, the process for obtaining Clean Water Act permits has become longer, more complicated and more expensive. To 

make matters worse, we have now entered unchartered water for 

regulatory certainty with EPA’s claim that it can, one, revoke a 

permit issues by another agency after the fact, the example the 

chairman used in his opening statement, a project that met the test 

of a 10-year environmental review and obtained EPA’s prior consent; or instruct State and Federal agencies not to consider any 

permit application until it decides whether development in that 

State is appropriate; or change the process for reviewing permits 

after applications have been filed and pending for several years 

and, as a result, effectively force companies to abandon their applications out of frustration. 

In short, it appears that in EPA’s role it can never be too late 

or too soon to inject itself in the process or change the rules for reviewing project permit applications. Let me be clear. Valid concerns 

about environmental protection should be fully considered and addressed. At the same time, they should not serve as an excuse to 

trap projects in a limbo of duplicative, unpredictable and endless 

review or carry a prospect that decisions will be revisited when 

there’s a change in leadership at an agency. 

There is a time and place for EPA to engage the permitting process and raise legitimate issues it does not believe are being evaluated. That opportunity arises between the time a permit application is filed and prior to a decision. 

Since the enactment of the Clean Water Act and until now that 

opportunity has proven more than adequate to the task. Words can 

debate whether the language of the Clean Water Act accommodates 

EPA’s recent breathtaking claim of authority, but the fact that 

such authority was not apparent for 40 years should raise red flags 

as this subcommittee considers the questions before it today: is this 

what the Clean Water Act intended? And is this good public policy? 

In the wake of EPA taking such extraordinary actions, the Agency issued statements that it only plans to do so very rarely, but for 

all practical purposes that is not a guarantee any project can take 

to the bank. 

Thank you very much for your attention today. 

Mr. GIBBS. Thank you, Mr. Quinn. 

Mr. Ivanoff, welcome. The floor is yours. 

Mr. IVANOFF. Thank you very much. 

Chairman Gibbs, Representative Bishop, members of the subcommittee, my name is Nick Ivanoff, and I am president and CEO 

8 

of Ammann & Whitney, an engineering company based out of New 

York. I am here today on behalf of the American Road and Transportation Builders Association where I currently serve as the senior 

vice chairman. 

ARTBA, now in its 112th year of service, represents all sectors 

of the U.S. transportation construction industry which sustains 

more than 3.3 million American jobs. ARTBA members must directly navigate the regulatory process to deliver transportation improvements, including obtaining Clean Water Act permits. 

The permitting process is essential for balancing the need for 

protecting our natural environment with the need to improve our 

transportation networks. ARTBA members benefit from a well-run 

permitting system because it lets them know their responsibilities 

upfront and allows them to plan ahead during construction. 

However, in order for a permitting system to function properly, 

there must be certainty. Once a permit is issued, we need to be 

able to rely upon the fact that the permit’s conditions will not 

change. 

EPA’s decision to revoke Arch Coal’s Clean Water Act permit in 

January of 2011 sets a very dangerous precedent which threatens 

to remove this certainty from the permitting process. Major transportation projects can take years, if not decades, to complete. In 

order for these projects to move forward, planners need to know 

permits received at the beginning of a multiyear construction process will be valid throughout the project’s life span. 

While the EPA’s decision was directed at a single mining operation, its impacts have been felt throughout multiple industries. As 

a result of EPA’s actions, permit holders could be in danger of losing their permits through no fault of their own, but simply because 

EPA changes the rules in the middle of the game. 

Certainty in the permitting process is also integral to the financing of transportation projects. As you know, public-private partnerships are being eyed more and more frequently as a means of 

project delivery. In order for parties to invest in transportation improvements, they need some level of certainty. The prospect of a 

valid permit being rescinded at any time increases risk for project 

investors, making the project much less appealing or increasing the 

entity’s required rate of return on their capital. 

EPA’s permit veto is even more troubling in light of the Agency’s 

recent regulatory attempt to expand its jurisdiction under the 

Clean Water Act. If EPA’s proposed jurisdictional rule is implemented, the universe of water bodies requiring Federal permits will 

expand. This would be a one-two punch for transportation improvements as their permitting burden would increase, and even if those 

permits are obtained, the length of their validity would certainly be 

in doubt. 

It should also be noted that there has been recent bipartisan 

progress in the area of streamlining the project review and approval process for transportation projects. If EPA’s retroactive permit veto is allowed to stand, this progress as well as any other benefit from future reforms would be diluted. Any reduction in delay 

gained from improvements to a project delivery process could be 

negated by the increased uncertainty in the regulatory process for 

wetlands. 

9 

ARTBA was pleased to see this committee introduce the bipartisan Regulatory Certainty Act of 2014, which would curb EPA’s 

ability to retroactively veto a valid permit. ARTBA supports this 

measure and sees it as a means to restore certainty to the permitting process. 

Mr. Chairman, Representative Bishop, ARTBA deeply appreciate 

the opportunity to take part in today’s discussion, and I certainly 

look forward to answering any of your questions. 

Thank you very much. 

Mr. GIBBS. Thank you. 

Ms. Pilconis, the floor is yours. Welcome. 

Ms. PILCONIS. Thank you. 

Chairman Gibbs, Ranking Member Bishop, and members of the 

subcommittee, thank you for inviting the Associated General Contractors of America to testify today. 

AGC represents over 25,000 construction contractors, material 

suppliers, and related firms. These firms construct buildings, highways, bridges, water and wastewater facilities, and other public 

and private infrastructure. 

My name is Leah Pilconis, and I am a Senior Environmental Advisor to AGC. On behalf of AGC, I maintain liaison with EPA and 

other Federal agencies that interpret and enforce environmental 

laws. 

Construction activity in ‘‘waters of the United States’’ requires a 

404 permit. AGC believes that EPA’s authority to modify a section 

404 permit does not and should not extend beyond the point at 

which the Corps issues the permit. Unfortunately, EPA has taken 

a much more expansive view of its authority, asserting on its Web 

site that it can modify a section 404 permit before a permit is applied for, while an application is pending, or after a permit has 

been issued. 

EPA’s actions are disrupting the longstanding permit process 

that property owners and construction contractors rely on. The 

Agency is disregarding the regulated community’s reasonable, well 

settled, and investment-backed expectations. It is taking away the 

finality of a dually issued permit. 

Under a joint EPA and Army Corps proposal to redefine ‘‘waters 

of the United States,’’ AGC expects many more construction 

projects to require section 404 permits. If EPA has its way, every 

permit will forever remain subject to modification and even revocation at literally any time simply because EPA unilaterally changes 

its opinion of information that it has long possessed. AGC believes 

it is now up to Congress to step in and solve the problem. 

The alternative is to allow EPA to render years of development 

planning and billions of dollars in investments virtually meaningless based on nothing more than a reassertion of concerns that did 

not prevail in the original interagency review process. 

Working without a permit is not a viable option. The penalties 

for failing to obtain the necessary Clean Water Act permit can be 

severe, and that is just the tip of the iceberg. Many of today’s infrastructure projects cost billions of dollars to construct, and they require huge sums of money upfront just to begin work. Project 

delays and disruptions can easily cost millions and millions of dollars. 

10 

Scarce resources are wasted. Economic benefits are delayed, and 

workers lose their jobs. The widespread economic damage hits the 

property owner, the general contractor, the subcontracts, the material suppliers, the individual construction workers and the community. 

What is more, those who are opposed to a construction project for 

whatever reason now have an incentive to bring citizen suits to try 

to compel EPA to modify or revoke the projects 404 permit. Legal 

proceedings mean delays, wherein overhead and other costs continue to accumulate. If EPA is allowed to revisit the environmental 

impact of a 404 permitted project at any time, then the permit 

holder cannot rely on the sole statutory mechanism for measuring 

Clean Water Act compliance, the permit. 

The Corps regulations specifically address permit modification or 

suspension and lay out the five factors to be balanced in that inquiry. Those factors promote compliance and protect reliance interests. If EPA continues to assert unconstrained veto power over permits issued by the Corps, it will substantially deter investments in 

projects that require 404 authorization, which will translate directly into lost jobs and lost economic activity across the whole 

economy. 

Billions of dollars of investments are dependent on the finality 

that comes with a duly issued Corps permit. Leaving projects unbuilt has consequences far beyond the owners and users who are 

deprived of the use of that project. 

Construction is a major contributor to employment, cross domestic product, and manufacturing. Section 404 projects generate significant indirect and induced benefits to affiliated industries. Reduced levels of investment in those projects translate directly into 

lost jobs and lost economic activity across the whole economy. 

The U.S. currently faces a significant backlog of overdue maintenance across its infrastructure system. The suspension restriction 

or lack of financial support for 404 projects could result in intolerable delays to the revocation and improvement of public infrastructure, including highway, transit, bridge repairs, and dam repairs. 

Finally, the debt rating agencies will account for this risk 

through lowered bond ratings, particularly on controversial 

projects, resulting in increased underrating fees and interest rates. 

In some cases, project proponents may not be able to obtain necessary financing or public funding. 

Mr. GIBBS. Thank you. 

Mr. Faulk, the floor is yours. Welcome. 

Mr. FAULK. Thank you, Mr. Chairman and members of the committee. 

Mr. GIBBS. Put the microphone on and pull it a little closer 

maybe. 

Mr. FAULK. Here we are. 

Mr. GIBBS. Speak up like the previous witness who did really 

well. 

Mr. FAULK. Absolutely, absolutely. I want to thank you, Mr. 

Chairman, and your sense of humor and the members of the committee for inviting me to speak to you this morning. 

At the outset I want to note that I am not appearing here on behalf of any client or any organization. I have responded to the comVerDate Aug 31 2005 14:32 Jan 30, 2015 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\WR\7-15-1~1\88674.TXT JEAN
11 

mittee’s invitation as a concerned citizen, and I am going to provide 

information based upon my experience and my observation. 

I am the Senior Director of Energy and Environment Initiative 

at the Law and Economics Center of George Mason University, 

where I develop and participate in forums designed to promote constructive dialogue regarding our Nation’s energy and environmental issues. 

I am also a partner in the Washington, DC, law firm of Hollingsworth, LLP. 

I have become familiar with the sources of the Environmental 

Protection Agency’s alleged authority to veto permits issued under 

section 404 of the Clean Water Act, as well as the disputes that 

have arisen recently regarding the extent of the authority both before and after permits have been issued by the Corps of Engineers, 

which is, of course, the primary authority responsible for such actions. 

Based upon my review, three situations that have arisen recently, I believe that there’s an urgent need for a comprehensive 

inquiry into whether the current statutory structure can be properly construed to authorize retrospective and prospective vetoes of 

legitimate business activities. 

The risk presented by such vetoes can be examined in these 

three situations that I’ve mentioned: the one which has already 

been discussed at length involving the Mingo Logan Coal Company, 

Spruce Mine No. 1; the second being the Pebble Mine Project development in Alaska, which involves a prospective veto; and the third 

that I am aware of is a request that was made in May, May 27th, 

2014, to the EPA by a group of Native Americans in Wisconsin who 

are seeking a prospective prohibition of exploration and extraction 

by mining companies, particularly the Gogebic Taconite Mine for 

protecting the water resources associated in those situations. 

If the congressional inquiry that I am requesting this committee 

to recommend reveals that these risks exist, Congress should consider amending the Clean Water Act to preclude these problems. 

These amendments should require that the EPA’s objections and 

withdrawal of specifications occur only during the normal permitting process, not before the permitting process is commenced and 

not after the process is concludes. 

Without these protections, these practices which are enhanced by 

deferential judicial review unreasonably expand the EPA’s regulatory range and threaten to upset the delicate balance of powers 

and participation necessary to ensure the administration fairly of 

the Federal Clean Water Act. 

It is worth noting that with respect to the Mingo Logan situation, that in the Supreme Court the argument was made in the petition for certiorari that the Supreme Court has already decided the 

question under the Coeur Alaska case, which is cited in my materials, that the Corps of Engineers is entitled to full respect for its 

decisions, and that they, in fact, have the authority to deal with 

these issues during the course of the permit issuing process. And 

that case can be found at 557 U.S. 261. It was decided in 2009. 

But aside from these legal arguments, there is a multitude of 

economic issues that should be addressed here. Giving EPA the unconstrained authority to revoke section permits at any time strips 

12 

the permits of the finality and regulatory certainty that Congress 

clearly intended for them to have, while the Corps is required to 

consider the impacts on investments as a part of its issuing process. 

It is interesting that the EPA claims it has no responsibility to 

consider these investment opportunities. Certainly there is nothing 

in the Clean Water Act that suggests that they must do so, and 

therefore, they have a situation that is left to their complete discretion without even considering or affording any deference whatsoever to these important issues. 

Permits are extremely important and regulatory certainty is extremely important in all of these situations, and the threat of deferential judicial review is also a problem. As we know from the recent decisions of the Supreme Court, all of these issues are entitled 

to dispositive interpretations. EPA’s interpretation are dispositive 

under the Chevron issues. They receive all sorts of recognition. 

Scientific issues are entitled to an extreme degree of deference. 

Under those circumstances you can see that the danger of this situation which deprives parties of opportunities to challenge these 

issues in the permitting process adequately necessarily precludes 

any meaningful review of these issues by the courts. 

Mr. GIBBS. Thank you. 

Mr. Parenteau, welcome. The floor is yours. 

Mr. PARENTEAU. Thank you, Chairman Gibbs, Representative 

Bishop, members of the committee. I appreciate the opportunity to 

appear here today. 

I am, like Mr. Faulk, appearing in my individual capacity as 

someone who has spent over 40 years dealing with the Clean 

Water Act, but I do not have a dog in this particular fight. 

I would note at the outset, however, I think it is very unfortunate there is not a member of the public from the Bristol Bay community here. The committee is debating a change in the law that 

could have very dramatic implications for the people that rely on 

a world-class fishery, a billion-dollar fishery that supports 14,000 

jobs, that provides over half of the sockeye salmon that the world 

consumes. This is a one of a kind resource, and it is in your hands. 

The fate of this resource is in the hands of this Congress. 

So with that let me just say that EPA has interpreted its authority under section 404(c) of the Clean Water Act in precisely the 

same way it is interpreting it today as it did in 1972, as the Congress did in 1972 when it wrote this law. This law authorizes EPA 

to exercise this very rare last resort, very carefully crafted authority before, during or after the issuance of a 404 permit. 

That was written in the EPA’s rules from the very beginning. I 

was a Regional Counsel with EPA. I am very familiar with these 

rules. I applied these rules in the Attleboro Mall veto case under 

the Reagan administration, and it has been clear from the beginning that this authority has existed, and EPA has always interpreted it consistently. 

It is also true that EPA has very, very rarely exercised this authority. In fact, obviously it is very true that they very rarely exercise 404(c) veto authority at all, on only 13 times out of, as Mr. 

Bishop said, 2 million permit activities. 

13 

It is also true that EPA has been challenged each and every time 

it has exercised this authority in the courts, and it is true that 

EPA’s position has been upheld by the court each and every time 

it has been challenged. Its administrative record, its science basis, 

its consideration of economic impacts, its consideration of alternatives, the reasons it gives for exercising this rare authority, 

every single facet of every single decision under 404(c) has been 

vigorously litigated by some of the finest litigators in the country, 

and each time EPA’s position has been upheld, all the way now to 

the Supreme Court. 

So in terms of law, it is well settled that EPA is well within its 

bounds in the way that is operating under the 404(c) program. 

People can legitimately disagree, obviously, as to whether a particular veto ought to have been issued in a particular case, as to 

whether EPA should invoke the 404(c) authority at all. There are 

reasonable grounds to disagree and reasonable ways of seeing these 

things, but the authority to do that is clearly there. 

Let me also say having been in the middle of this 404(c) process 

it is multilayered; it is four steps; it takes months, if not years, to 

complete. It is preceded by extensive consultations with the Corps 

of Engineers, with the project applicants, with local officials, with 

scientific authorities, with local communities, with site specific investigations, with peer reviewed science. All of that is part of these 

administrative records. It is all transparent. It is all there for anyone to see and anyone to challenge and anyone to debate. It is all 

on the record. It is all out in front. There is nothing in secret about 

it. 

Finally, I would like to say that the instances in which this authority have been used have produced some very, very positive results. From the small to the large, in the Attleboro Mall case not 

only was the project in question a shopping mall built ultimately 

in an upland area that saved wetlands, but it led to a revolutionary 

change in the way that the agencies, the Corps and the EPA, administer the 404 program and specifically the way that mitigation 

of wetland impacts are handled. 

It led to the most comprehensive set of mitigation regulations 

that we now have that have finally once and for all identified exactly and precisely how applicants can proceed to develop sites responsibly and with mitigation that actually works in accordance 

with the recommendations of the National Academy of Sciences 

and others. 

That all resulted from that one single veto. Before that point in 

time there was no agreement between these agencies, lots of arguments, lots of litigation, lots of uncertainty. The veto broke through 

that. The veto resulted in an agreement that finally resolved that. 

In the Two Forks case, very quickly, not only did we save 

Cheesman Canyon, one of the most priceless trout fisheries in the 

Western United States and very high value; not only did we save 

the seven towns that would have been flooded had Cheesman Canyon have been dammed, but the Denver Water Board came up with 

a water conservation policy as a result of that and acknowledged 

that the 404(c) veto led them to do that, which allowed Denver to 

grow by 100,000 people with no further water supplies needed. 

14 

Section 404(c) is not broken. It works. It is doing what Ed 

Muskie and the others thought it was supposed to do in 1972. It 

should be retained. 

Thank you. 

Mr. GIBBS. Thank you. 

I will start off here. First I want to address what Mr. Parenteau 

just said. In your written testimony, you got the verbiage here for 

the rule, and then I have the actual section 404(c) that is in the 

law, and I would respectfully argue that the law was loosely written. 

You cited the rule, not the actual law, and I think what we need 

to do is Congress needs to clarify this a little bit because apparently for nearly 40 years, the EPA did not abuse this authority 

even though it was not that clear, and now we have seen that. 

My questions start to Mr. Faulk. Of the 13 vetoes that the ranking member addressed, would you concur that that was operating 

within the law, and that is a separate issue to what has happened 

at Pebble and happened at Spruce. 

Mr. FAULK. Yes, yes, I would say so, and the reason I would say 

so is because the situation at those facilities is substantially more 

aggravated than most of those particular instances. 

Mr. GIBBS. Yes. OK. I do want to make an announcement, too, 

that for the record both the EPA and the Army Corps denied our 

request to testify before the committee on this subject. So I wanted 

to make that clear. 

Regarding Mr. Quinn, on those 13 vetoes, would you concur, too, 

that those were operating within the scope of the Clean Water Act 

and their jurisdiction, and that is different than what they have 

done in those other two cases that I just mentioned? 

Mr. QUINN. Well, Mr. Chairman, I do not have all of the facts 

to each of these. So I would say that the veto we saw at Spruce 

was completely different and extraordinary. Several years after the 

fact we had a 10-year review process. The project had been adjusted to address EPA concerns. EPA signed off on it. 

Here is what I find amazing, is that I listened to the professor’s 

testimony about how transparent the process is for the veto situation, but the question is, and nobody seems to answer it, why is 

an EPA engaged in the process where it is directed to between the 

time the permit application has been filed and before a decision has 

been issued by the court? 

It seems remarkable to me that all of a sudden after the decision 

by the Corps, EPA finally has this remarkable revelation that, 

oops, we should have told them ahead of time this is not an area 

we want to—— 

Mr. GIBBS. So you would argue that the intent of the CWA was 

for the Corps and the EPA to be involved during the process and 

they could veto during the process? 

Mr. QUINN. That is the context I see in the statute, and I can 

see that the courts have said that the language is broad enough to 

accommodate what they are doing. My point is I do not think that 

is good public policy, and Congress ought to have a question whether that—— 

Mr. GIBBS. I want to take this a little further. This will be for 

Mr. Quinn or Mr. Faulk on the expansion of the EPA’s rule on the 

15 

‘‘waters of the United States.’’ It seems to me that there is a possibility there will be a lot more requests for section 404 permits from 

all types of different entities, developers, farmers, local governments, townships. Did you see it that way, Mr. Faulk, I guess? 

Mr. FAULK. Yes, I really do. I think we are seeing an effort by 

the EPA here with these proposals to basically bring in basically 

any place that connects in in any way to waters under the United 

States jurisdiction to be extended, and we will see farmers, for example, who withdraw water. 

We will see other businesses that withdraw water that are from 

these things, come into the regulatory process. We are going to see 

a surge of applications for these permits, and all of these people are 

going to have to rely upon what those permits say in the process 

of planning their business activities on a daily basis. 

And with that it becomes uncertain. The question of how much 

they can invest, how big their businesses can grow, how intense 

their business activities can be. 

Mr. GIBBS. I want to give Mr. Kovacs a chance. You want to talk 

about that, too, I think. 

Is your mic on? 

Mr. KOVACS. I think the thing that troubles me the most is that 

in the process, EPA was involved. It was actively involved, and in 

fact, it wrote to the Corps and indicated that it might have some 

problems, but then it indicated just go forward. 

Then the company starts construction, and then 4 years later, 

they decide to exercise the veto. So I think that is an important 

issue. 

The second part that is really important is I think if you look at 

Justice Scalia’s last discussion in the UAR case 2 weeks ago on the 

greenhouse gases, he is very clear. Congress did two things. One 

is 40 years ago you delegated a lot of authority to the agencies and 

much has not been done to look at the authority recently, and there 

is an institutional problem. 

But the second thing is, he said, you know, different definitions 

can be looked at in different titles of an act, and what you have 

to do is look at the structure of the act. So when you are looking 

at this, in this particular case, the Court looked at one word, 

‘‘wherever,’’ and it did not look at the entire structure of 404(c) and 

the role of the Court or the role of the Corps and the role of the 

Agency. 

So I think in that sense, and now you are going into ‘‘water of 

the U.S.’’ and other regulatory change which is going to greatly increase the number of facilities that may be in this issue or in this 

problem. 

Mr. GIBBS. Thank you. 

My time has expired. I will yield to Mr. Bishop. 

Mr. BISHOP. Thank you, Mr. Chairman. 

Let me thank the witnesses for their testimony. I have to confess 

that I am not entirely sure where to start here, but let me start 

with a couple of things that I heard. 

I heard a lot about this being a dangerous precedent. I heard a 

lot about expanded jurisdiction. I heard a lot about alleged authority. Let me start with the authority. I am going to read section 

404(c). 

16 

‘‘The Administrator,’’ by that they mean the EPA Administrator, 

‘‘is authorized to prohibit the specification, including the withdrawal of a specification, of any defined area as a disposal site, and 

he is authorized to deny or restrict the use of any defined area for 

specification, including the withdrawal of specification as a disposal 

site whenever he determines.’’ 

Now, I am not a lawyer. Perhaps that it is a good thing. I am 

teasing. But that seems pretty clear to me. That seems pretty clear 

to me. 

Mr. Parenteau, would you agree that that is pretty clear authority? 

Mr. PARENTEAU. Yes, and more importantly, the DC Circuit 

agrees and so apparently does the Supreme Court, which denied review in Mingo Logan. Let me read you what the DC Circuit said. 

‘‘Using the expansive conjunction ’whenever,’ the Congress made 

plain its intent to grant the Administrator authority to prohibit, 

deny, restrict, withdraw a specification at any time.’’ And the court 

emphasized ‘‘any.’’ 

Mr. BISHOP. OK. So hopefully that disposes of the issue of whether or not the authority being exercised is alleged or whether it is 

statutorily based. 

The second thing I would say is so we seem to have a situation 

in which the authority that the EPA is exercising is well within its 

statutory authority and well within the way in which that authority has either been interpreted or validated by the courts. 

We also have a situation in which the numbers make the case 

unmistakably that the authority is rarely exercised. And so when 

I hear about uncertainty and I hear about not a guarantee, .99999 

percent of the time the 404(c) permit that is issued is validated or 

accepted or not challenged by the EPA. 

So I guess my question is: what is new here? There was a revocation of a permit under President Reagan. I do not think anyone’s 

hair was on fire at the time. I do not know. I was doing something 

else at the time. 

One was denied by George H.W. Bush’s EPA. I do not remember 

this being a huge issue that brought about a hearing of this type. 

So what is new? What is precedent setting about what the Obama 

administration’s EPA has done that was not precedent setting by 

what the Reagan administration EPA did or the George H.W. Bush 

EPA administration? 

I will go further. This administration has vetoed or overruled an 

EPA veto of a 404, section C permit. Why is that not precedent setting? Why does that not yield the same kind of uncertainty that I 

keep hearing about? 

And I know I am asking rhetorical questions, but I would invite 

any of the panel to help me understand what is precedent setting 

about this, and why is it that if an agency over a 42-year history 

exercises its veto authority .000001 percent of the time, why does 

that induce the kind of uncertainty and the kind of sort of doomsday rhetoric about how people cannot possibly plan when the EPA 

can drop the ax at any time? 

Mr. QUINN. I will be happy to try to answer that, Mr. Bishop. 

I think it is a good thing that you are not a lawyer because I think 

you bring some fresh perspectives to this. 

17 

I have been involved in a lot of this litigation, but I will admit 

I am a recovering lawyer. So I will try not to derail my recovery 

on this. 

But I think there are a couple of distinctions, and as I have said 

before, I would agree with your statement that the courts have 

validated at least part of this interpretation. No question, and I am 

not here to debate whether the language accommodates it or not. 

Apparently it does, at least on a retroactive aspect. 

But I think there are important factual distinctions, timing distinctions on the Spruce permit occurring with a very extended review period, for a decade, obviously a lot of interaction between the 

agencies, a final decision, and then years after that final decision, 

a redo or revisiting on that. So I think that is a clear difference. 

I think on the preemptive moves we are seeing now are unprecedented where EPA has gone into a situation and has basically said 

we do not want any agencies entertaining any application it may 

receive until we finish doing our own study, and that has actually 

invited now new requests from outside groups to come and evaluate other areas as well. 

Mr. BISHOP. May I just interrupt? 

Mr. QUINN. Please. 

Mr. BISHOP. There were two preemptive denials pre-the Obama 

administration, both by Republican administrations. How do those 

two preemptive denials differ? 

Mr. QUINN. Prior to an application being filed. 

Mr. BISHOP. Yes, there were two of those prior. 

Mr. QUINN. I would have to look and see what the context of that 

is. 

Mr. BISHOP. But is that not important? If what we are dealing 

with here is an agency’s statutory ability to enforce the law that 

Congress has written and left in place, and one administration does 

it and it is a freebie, no problem, and another administration does 

it and we have a hearing with six witnesses and we are talking 

about expanded authority. 

Is it not important that we understand the distinction between 

those first two and what we are dealing with now? And I do not 

mean to put you on—— 

Mr. QUINN. No, no. I do not know the context of that. So I cannot 

directly answer that question. I think in this case we have a situation where a company has invested $700 million in looking at, explore and develop a mineral resource, and even before it has the 

opportunity to file some engineering plans, specifics, and have it 

evaluated whether it can balance these different needs, it is being 

pushed out and the State is being pushed out of any role in deciding what is a balanced approach on this. 

Here is what I would say, Mr. Bishop, is that I think in the end 

of the day the real question is: can we not accomplish what we are 

all looking for under the process that has been typically adhered 

to for 40 years, which is when an application is filed, this is when 

the interaction occurs, and before you reach a decision if EPA 

wants to say, ‘‘This decision by the Corps is going to be wrong. I 

have talked to them ahead of time, and now I am going to commence a proceeding’’—— 

18 

Mr. BISHOP. And I guess that is my point. I accept what you say, 

and I guess my point is: how does one occurrence constitute atypical? 

You know, there have been 60,000 permits applied for a year in 

the 5 years of the Obama administration, 300,000 permits and 

change. Once, once, how does that constitute something that now 

businesses cannot reasonably count on? 

In the 8 years—I am sorry. Did I run over my time? 

Mr. GIBBS. Yes, you are over your time. 

Mr. BISHOP. I am way over my time. 

Mr. GIBBS. Yes, you are way over. 

Mr. BISHOP. Thank you, Mr. Chairman. 

OK. I will come back to it. 

Mr. GIBBS. I was trying to allow the witnesses to respond to your 

rhetorical questions. 

Mr. BISHOP. Thank you. 

Mr. GIBBS. But just a comment. The bills we are looking at tomorrow in markup, I think, in reference to my bill, try to put a reasonable time period for the 404(c) to come into effect, not 3 years 

later. So I think it is a commonsense, reasonable time, and that is 

what we are trying to address in the legislation. 

Mr. Markwayne Mullin from Oklahoma, do you have questions? 

Mr. MULLIN. Yes, sir. That caught me a little off guard though. 

It is a privilege and honor to be here and have the panel in front 

of us. 

I had some deep concerns about it. I have dealt personally with 

the EPA. I have dealt personally on these permit issues. I have 

personally run into hurdles when we were trying to build such 

things as retention ponds for drilling sites, when we are trying to 

do dirt work and control the runoff where the will come in and 

start making different permit issues, different requirements, and 

overrunning DEQ. 

And as Mr. Bishop was trying to allude to, he was simply saying, 

‘‘Why now?’’ Well, as a business owner I can answer that and say 

it is because it is politically motivated, and we cannot judge that. 

We cannot simply stay up and say there are rules and common 

sense that apply to this. 

In 1972, Mr. Parenteau—is that how I am saying that? 

Mr. PARENTEAU. Parenteau. 

Mr. MULLIN. Parenteau. I am sorry. 

In 1972, the initiative was to try cleaning up the waters because 

we were abusing it. The overreach now of the EPA has become so 

absurd that I do not think anybody in this room can deny that 

there is some political motivation behind this, and that is where 

the uncertainty as a business owner comes into play. 

When you know what rules you have to play by, but then when 

no rhyme or reason can come in and say, ‘‘No, we are just not going 

to do it,’’ after we as business owners are investing millions of dollars to get a project done, and they do not even have to give us an 

explanation of why, there is a difference between 40 years ago and 

today. 

And I do not think even you, sir, can disagree with that. When 

we have a President that openly says that he is for something and 

completely against something else, there is a problem with that. 

19 

And as an entrepreneur, what we simply want to do is say let 

there be certainty in it. Tell us why. Where are you going with this, 

not just because you feel a certain way? Where is the balance between the good of the people and your agenda? 

And I would like you, sir, to expand a little bit on where the difference even in Congress, where we are at today versus 1972, and 

where the EPA has grown from 1972 to where it is today, and 

where is the certainty as a business owner. As the gentlelady said, 

because I am not even going to try saying your last name, from 

AGC, the permitting process and the fines have become absurd. 

And how can we predict the future and how can we adequately prepare for the cost of the infrastructure that this committee is all 

about? 

Mr. PARENTEAU. One of the greatest uncertainties that we are 

dealing with has been given to us by the United States Supreme 

Court in two very controversial decisions. 

Mr. MULLIN. I agree with that. 

Mr. PARENTEAU. And if you are asking what can Congress do 

about it, what I would tell you is what the Supreme Court said you 

can do about it, which is the clarify the scope of the jurisdiction of 

the Clean Water Act. 

There is going to be tremendous disagreement about what the 

scope of that act ought to be. Let me just say this. 

Mr. MULLIN. Well, the EPA came in and they made their own 

reach of what the U.S. waters are. 

Mr. PARENTEAU. That is correct. 

Mr. MULLIN. And they are moving way upstream, way above 

navigable waters. Now we do not even understand what ‘‘navigable 

waters’’ really means. 

Mr. PARENTEAU. The proposal that is on the table would actually 

reduce the extent of the Federal jurisdiction as it existed before 

these two decisions were handed down. The Fourth Circuit of the 

United States—— 

Mr. MULLIN. Hold on. Reduce? 

Mr. PARENTEAU. Yes, reduce. 

Mr. MULLIN. They are moving further upstream. 

Mr. PARENTEAU. No, sir. 

Mr. MULLIN. Sir, I will beg to differ on first-hand experience because I had the farmer that had moved upstream where they have 

denied us the ability to even fertilize their own ground because 

they are saying runoff is now part of navigable water. 

Mr. PARENTEAU. Runoff is activities. 

Mr. MULLIN. Activities are considered a ditch? Say you have got 

to be 1,000 feet away from a watershed, and a watershed is within 

1,000 feet of a ditch? 

When you live in northeast Oklahoma, everything is on a hill. 

You are within 1,000 feet of a waterway everywhere you go if that 

is the interpretation. 

Mr. PARENTEAU. EPA’s role has reduced the scope of the act with 

regard to ditches. It has, as a matter of fact. 

Mr. MULLIN. I would like for you to clarify that. 

Mr. PARENTEAU. I would be happy to do so. 

Mr. MULLIN. And say how that is even possible. 

20 

Mr. PARENTEAU. I would not only be happy to clarify it. I will cite 

you the case that upheld a broader definition of ditches than EPA 

is using. 

Mr. MULLIN. OK. When they are coming back upstream, sir, and 

they are saying that now runoff is considered part of a navigable 

water, if a steam will flow into a navigable water, at least you 

should be able to put a canoe. When the Congress specifically put 

in ‘‘navigable water’’ in it and now their interpretation is so much 

broader, farther upstream, and now they are having a complete different interpretation of what U.S. waterways are, and you are saying they have shrunk? 

Mr. PARENTEAU. Yes, they have. Before—— 

Mr. MULLIN. I do not think there is anybody in this room that 

can possibly agree with you on that one. 

Mr. PARENTEAU. I understand that. 

Mr. MULLIN. We just had a hearing about this 3 weeks ago, and 

even they said they had broadened their reach. 

Mr. PARENTEAU. Would you like some authority? 

Mr. GIBBS. The gentleman’s time has expired. 

Mrs. Kirkpatrick. 

Mrs. KIRKPATRICK. Thank you, Mr. Chairman. I thank you and 

the ranking member for having this hearing, and I thank all of our 

witnesses for being here today. 

You know, look. At the end of the day everybody in this room 

wants clean water. We understand how vital that is, and being 

from Arizona, I know how important it is to life and to our future 

economic development. And so I understand the importance of this 

hearing. 

But I also represent a sprawling Arizona district that has coal 

mining, copper mining, four coal-fired electric plants, and I understand the need for certainty in terms of the EPA regulations. 

Mr. Quinn, I also understand math, and I want to congratulate 

you on these algebraic equations in your testimony. I like that. So 

thank you. Thank you for that. 

But my first question is for you, Mr. Quinn. I mean, in the 40 

years since 1972, can you describe for us what kind of changes you 

have seen in the regular EPA permitting process? 

Mr. QUINN. Well, I think the changes we would see would be as 

following: expanding the reach of what needs to be permitted over 

the years; more complexity in terms of obtaining those permits; 

more time to get them; and it being more expensive to put forward 

the information that is being required now by EPA and the Corps 

of Engineers. 

I think the difference of 40 years and how the process has 

worked is I know the ranking member and I have had this discussion on the context of various decisions, but I would say I do not 

think we have ever seen a veto of a preexisting permit decision 

that has occurred so far after the actual contemporaneous issuance 

of the decision. 

On the previous or a preemptive type situations we have seen 

now recently in Alaska, I am going to have to concede to the ranking member I am not familiar with all of the facts, though I do believe that maybe the cases he is referring to might be areas where 

EPA had previously decided or the Corps previously decided were 

21 

not appropriate for any filling, and then when a project proponent 

came back again, they just said, ‘‘Hey, we said no the first time. 

We are not going to say no.’’ 

But I have to be careful about that. I have to look at all of the 

context of those decisions. 

But I think the process has become longer and more complex, 

and I think the regular rule of order had been until recently typically the issues would be worked out within the context of once 

your application is filed and prior to the final decision being made, 

and the veto was viewed as a veto of a pending or prospective or 

decision about to be made about an area that was within the application itself, not after the fact, not after reliance had been made 

on those decisions. 

Mrs. KIRKPATRICK. This question is for anyone on the panel who 

can answer it. 

Do you have any idea about the change in time for permitting 

and cost for permitting from 1972 till now? Anyone? Yes. 

Mr. KOVACS. I believe that there are studies that show that every 

year the overall permitting process takes longer, and that is just 

across the board. And if you went from 1972 straight forward, I 

think you will find several things. 

One is it has become much more costly to file a permit because 

you just have more to do. It not only is costly. It is more complex. 

It is far more controversial. The use of citizen suits on virtually 

every project is just expected anymore. It is political, and then if 

you just look at the sheer number of regulations that have been imposed that a project has to comply with, it has increased since 

1976. My recollection is it is about 180,000 new regulations. 

So you put all of that together and it is just tougher to move into 

a new project. That is all, and so that when you get the permit, 

whatever is going to be decided should be decided within that timeframe. 

And EPA actually had looked at this project within the timeframe and passed, and then at a later date said, ‘‘Well, we have 

changed our mind.’’ And I think that is the difficulty. If it was a 

month later and nothing had happened, maybe somebody would 

say, ‘‘Well, they missed it.’’ But you need to put it in a box, and 

once the Government approves that they can do the project, it 

should move forward and they use their enforcement authorities. 

Mr. IVANOFF. Mrs. Kirkpatrick, in terms of time. 

We just recently completed a study for the Federal Highway Administration to look at the environmental process and the permitting process. In the 1970s, it took about just a little over 2 years 

to complete the environment process. Now, over the last 7, 8 years, 

it is closer to 51⁄2 years. So that gives you a context, from about 

2 to 51⁄2. 

Mrs. KIRKPATRICK. Thank you. I appreciate that. 

I am going to yield back the balance of my time. Thank you. 

Mr. GIBBS. Mr. Meadows. 

Mr. MEADOWS. Thank you, Mr. Chairman. 

Thank each of you for your testimony. 

So let me go a little bit further, Mr. Ivanoff. You said that the 

time to complete the environmental study has greatly expanded according to your study; is that correct? 

22 

Mr. IVANOFF. Yes, sir, it is. 

Mr. MEADOWS. All right. So what regulations have changed within a law they got passed back in the 1970s and now to make that 

process longer? Have there been additional regulations? 

Mr. IVANOFF. Well, I think part of the issue is there have been 

additional regulations, but there also have been interpretations, 

and if you take a look at interpretations by the Army Corps of Engineers, by EPA, certain definitions can be contradictory and confusing. 

Mr. MEADOWS. All right. That is where I thought you might go 

with it. So let us look at interpretations. The rule of law should 

give a consistent standard for everybody that is really especially 

from an administrative standpoint is not subject to individual interpretations. Would you agree with that? 

Mr. IVANOFF. Absolutely. 

Mr. MEADOWS. All right. So if we have this and we are making 

preemptive decisions on veto, whether it is under this administration or another administration I could care less. What I want to 

make sure of is that those who invest in infrastructure, as you do, 

those who invest in building, as others here at the witness table 

do, those that invest in manufacturing, as others at the table do, 

have some consistent standard. 

Would you all agree that that is important that we have a consistent standard? 

Mr. IVANOFF. Sure, absolutely. 

Mr. MEADOWS. Mr. Parenteau, would you not agree that it is important to have a consistent standard? 

Mr. PARENTEAU. Well, the saying is consistency can be the hobgoblin of small minds. It all depends on the facts of individual 

cases. 

Mr. MEADOWS. So yes or no, consistent standard or not? Would 

you agree with that? 

Mr. PARENTEAU. Consistent application of statutory authority, 

yes. 

Mr. MEADOWS. All right. How many miles of road have you built, 

Mr. Parenteau? 

Mr. PARENTEAU. I did build—— 

Mr. MEADOWS. Personally. 

Mr. PARENTEAU [continuing]. A driveway of about a quarter of a 

mile. 

Mr. MEADOWS. OK. So a driveway. I built roads, and I have had 

permits from the Army Corps and EPA, a number of permits, and 

I have built miles of roads and built bridges, and that interpretation can be very troubling when there is not a standard. 

And the chilling effect that it has is I make a determination on 

whether I really want to make an investment or not, whether I 

want to risk millions of dollars base on perhaps a standard that 

may depend on one bureaucrat having a bad hair day. That is not 

something that you would think would be good for us to do in 

terms of law, would you? 

Mr. PARENTEAU. I am not familiar that EPA has ever made such 

a decision. 

23 

Mr. MEADOWS. Well, I know because you do not live in North 

Carolina, and you did not do the permits with me, and your only 

real knowledge might be a driveway that you have built. 

So I mean I am telling you that we have built these. We get to 

see the inconsistencies. So let me put it maybe in a vernacular. You 

are an attorney, right? 

Mr. PARENTEAU. Yes, I confess that. 

Mr. MEADOWS. Well, do you think it would be a good thing for 

a judge, before he hears the case, to say, ‘‘I have already made the 

verdict’’? Yes or no. It is an easy question. 

Mr. PARENTEAU. Of course not, and EPA is not doing that. 

Mr. MEADOWS. I did not say EPA was doing that. I said would 

it be a good thing for a judge before they hear it. 

Mr. PARENTEAU. No, they should hear the evidence. 

Mr. MEADOWS. OK. How do we know, and let us take Pebble 

Mine; how do we know that the decision that the EPA has made, 

because you talked about transparency earlier—— 

Mr. PARENTEAU. They have not made a decision. 

Mr. MEADOWS. Well, I understand, but their inaction has made 

a decision. 

Mr. PARENTEAU. They have initiated a review, yes. 

Mr. MEADOWS. And so they have made some kinds of decisions 

internally. 

Mr. PARENTEAU. They responded to a petition from commercial 

and native fishermen, yes. They did. 

Mr. MEADOWS. OK. Well, and the jury is out whether that was 

encouraged by some within the EPA. There is all kinds of rhetoric 

that is out there, and so that may or may not have happened. 

Mr. PARENTEAU. No idea. 

Mr. MEADOWS. But is it important that we have a set of laws and 

a set of regulations where everybody can look at this transparently 

and say this was the decision that was made? 

Mr. PARENTEAU. Yes, and we do. 

Mr. MEADOWS. OK. With that, when you make a determination 

by some agency ahead of actually hearing the case and express 

their veto power, does that not give you some concern that too 

much power may be within one agency and one particular person? 

Mr. PARENTEAU. If that were happening, it might concern me, 

but it is not happening. 

Mr. MEADOWS. OK. So it has never happened? 

Mr. PARENTEAU. Not to my knowledge, no. 

Mr. MEADOWS. So you have intimate knowledge of some 2 millions applications? 

Mr. PARENTEAU. No. 

Mr. MEADOWS. I would not think so. 

Mr. PARENTEAU. I have knowledge that 2 million activities went 

forward without a veto, but that is all I know. 

Mr. MEADOWS. All right. So for you to not have a dog in this 

hunt, as you stated, how can you be so opinionated on all of these 

particular issues to not have a dog in the hunt? 

Mr. PARENTEAU. My opinion is based on my experience with the 

law and the way it has been applied. That is all I am talking 

about. 

24 

Mr. MEADOWS. All right. I am out of time. I will yield back, Mr. 

Chairman. 

Mr. GIBBS. Ms. Edwards. 

Ms. EDWARDS. Thank you, Mr. Chairman. 

And I would like to ask unanimous consent that a statement that 

I have from the National Wildlife Federation be entered into the 

record. 

Mr. GIBBS. So ordered. 

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Ms. EDWARDS. Thank you, Mr. Chairman. 

And I want to thank all of the witnesses, too, because even when 

I do not agree with you, I do not think it is our job to harass you. 

I want to thank the witnesses today, and just a reminder that 

on April 9th, our full committee marked up H.R. 524, and that 

would have amended section 404(c) of the Clean Water Act to limit 

the authority of the Administrator of the EPA to veto the specification of the Army Corps of Engineers or by a State of a site for the 

discharge of dredged of filled material. 

When we held that hearing, I noted at the time that we had not 

held a single hearing or reviewed any legislation either by subcommittee or full committee on the issue, and yet we were marking 

up the bill. I pointed out that I thought that if this was such a serious concern, that we would have done that. And so I am glad that 

we are holding this hearing today. 

I just want to note that section 404(c), under that section, actions 

can be taken if the impact of the permit activity is likely to result 

in significant degradation of municipal water supplies, including 

surface and groundwater, and significant loss or damage to the 

fisheries, shell fishing, wildlife habitat or recreation areas, and that 

has been true for this section has been vitally important to the implementation of our clean water laws for 40 years. 

I just want to note as well that in my home State of Maryland, 

we have the fourth longest coastline in the continental United 

States and the Chesapeake Bay, the largest estuary in the country 

and several of its tributaries, and so we do have a dog in this fight, 

and the shoreline of our Chesapeake and its tidal tributaries actually stretch for over 2,000 miles with thousands of streams and rivers and acres of wetlands that provide fresh water flows into our 

bay. 

As we have heard the testimony and listening to supporters of 

the legislation, you would think that the EPA has actually exercised its veto authority frequently, and nothing could actually be 

further from the truth. As the witnesses know and as my colleagues know, the Army Corps issues about 60,000 permits every 

year, and yet EPA has used this section of the Clean Water Act 

only 13 times, 60,000 permits a year, 13 times in the 41-year history of the law. 

And in 11 of those instances that was done by a Republican administration. This administration, the Obama administration, the 

Obama EPA has only exercised that veto authority ones, count it, 

once, and yet we are holding a hearing to essentially prohibit the 

EPA from exercising that authority. 

It seems quite irresponsible, in my view. I think the act already 

represents a huge step forward by requiring States to set clean 

water standards and protect uses, and in my estimation, you know, 

it is important for the Federal Government to use its authority to 

do the right thing to protect human health and the environment. 

And so respecting the law, I would like to ask the professor here 

from Vermont Law School, you have studied the implementation of 

the Clean Water Act and the implications of this provision. Can 

you just please tell us for the record whether, you know, in permitting over 60,000 permits a year it is even reasonable to say that 

there has been a gross abuse of the law and the implementation 

34 

of the law, given that this veto authority has only been exercised 

13 times and, again, one time under the Obama administration? 

Mr. PARENTEAU. I do not believe there has ever been a gross 

abuse of the law in any of the 13 exercises of 404(c), and I think 

the courts have uniformly ruled that that is the case. So my opinion is basically based on my reading of the way the courts have reviewed the use of that authority and since EPA has consistently 

been upheld every single time, my only conclusion can be there has 

been no abuse of the law. 

Ms. EDWARDS. Thank you very much, and with that I yield. 

Mr. GIBBS. Mr. Davis. 

Mr. DAVIS. Thank you, Mr. Chairman, and thank you to the 

panel. 

This issue concerns me, and it should concern the constituents 

that I represent in central Illinois. There has been a lot of talk 

about the past, about previous administrations using authority to 

change section 404 permits, but the one instance that concerns me 

is the retroactive use of the veto power, and that is with the mine 

in West Virginia. 

Now, I am here in Congress because 22 years ago I saw that a 

signature on a piece of paper here in Washington could have a detrimental impact on the largest employer that we had in my home 

county, in Christian County, Illinois. Our largest employer used to 

be Peabody Mine No. 10. Many of my friends, their families relied 

upon that coal mine that provided coal dug out underground in 

Christian County in Kincaid, Illinois, and Pawnee, Illinois. It was 

put on a conveyor belt and shipped over the highway to the then 

Con Ed coal-fired power plant that ironically shipped and still 

ships power up to the Chicago metro area. 

Now, because of amendments to the Clean Water Act that coal 

mine was shut down because it became more effective, cost effective overnight to bring coal in by rail from out West, in Wyoming 

and others, the Powder River Basin, by train to burn at the coalfired power plant across the street from Peabody Mine No. 10. 

It was a devastating blow to our economy. Families lost jobs, and 

this is what scares me about the bureaucracy because it is not just 

about legislation and amendments through the Clean Water Act 

that were signed into law back in the early 1990s. This is about 

a Federal agency taking a retroactive approach to a permit that 

has already been issued, to possible job creation in West Virginia, 

and West Virginia could be anywhere. 

That is what scares me about this administration’s ability to talk 

about what has been done in the past, but drastically do something 

different in the instance that they use this same authority. 

Now, as a former congressional staffer, I have worked with the 

Corps of Engineers in the 404 permitting process in the past, and 

it is a long and arduous process. It frustrates me that my colleagues believe that those who enter into the 404 permitting process always have nefarious reasons to want to get out and not follow 

any of the rules. I do not think that is the case at all. 

I think most who want to follow the rules and go through the 404 

permit process only want to do everything that they are being 

asked to do by the different agencies who have jurisdiction, and to 

assume otherwise I think is something that goes against the AmerVerDate Aug 31 2005 14:32 Jan 30, 2015 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\WR\7-15-1~1\88674.TXT JEAN
35 

ican dream and what people want to do to create opportunities and 

create opportunities and jobs and grow our economy, which we all 

say we want to do. 

Now, I also understand I do not have a lot of time left, and I 

want to hear from at least some of you on some concerns. I am 

going to start with Ms. Pilconis. 

I enjoyed your testimony, and can you elaborate further on what 

you are hearing though from your members? 

Construction projects are key now since we do not have as many 

coal mining jobs in Illinois. A lot of our former coal miners rely 

upon working on road projects that many of your members actually 

go out, put the risk. They risk their capital. They risk sometimes 

their savings, their life savings, to go create jobs for others in my 

district. 

And I want to know have you all at AGC done any analysis as 

to how EPA and their regulations support or stifle your business 

and economic output? 

Ms. PILCONIS. Sir, I would be happy to comment on that. 

Speaking directly to some of our construction members, they 

have really great concerns about how this process has the potential 

to delay or stop construction. They have explained a lot to me 

about all of the millions and millions of dollars that go into a construction project upfront before construction even begins. 

And so to the extent that you have delays, you have people who 

are not working. You have all of the money that has been spent 

on lining up insurance, bonding, the investors who have put money 

forth towards the projects, the site designs, the contract documents. 

All of that money that has been spent is potentially kind of going 

for naught if the projects cannot move forward. 

You know, we have talked a lot about what is different now, and 

I think one of the things that is different now is we are kind of in 

the age of information technology. So with so many people it would 

be difficult to find a person who is involved in business who has 

not heard about what is going on with this permit that EPA has 

withdrawn years after. And so that is creating a lot of doubt, 

maybe more doubt than what investors would have had in the past. 

So our members are very, very concerned about the doubt that 

investors are going to have in putting money towards projects that 

are going to require 404 permits. 

They are also concerned about how many more projects may require 404 permits, and we are not just talking about huge instream channelization projects or massive amounts of fill material 

or even per the definition of discharge of dredge material. We are 

talking about just mechanized earth moving activity. 

And so it is really hard to find or to conceive any construction 

project in a sometimes wet area or, you know, in a ditch that is 

not going to require a 404 permit moving forward. 

Mr. DAVIS. Well, thank you. That was a great response to my 

question, and it actually got to the crux of the issue where many 

of your members are investing so much of their own money upfront 

to go through the processes that the Federal Governments, State 

government, local governments put forth, and they are doing that. 

And every time they have to go over another hurdle, it raises the 

cost of the project, which costs taxpayers in this country even more 

36 

to move into construction which creates the jobs all of us keep talking about. 

You are the ones, your members are the ones who create the jobs 

in this economy. It is not here in Washington, and thank you. And 

I think this process and the uncertainty that we give you and your 

members out here in Washington because of this regulatory environment, because of this administration, and especially with a retroactive decision on an already issued 404 permit is shameful, and 

I am sorry that we actually have to have this discussion. 

And, Mr. Chairman, thank you. 

Mr. GIBBS. Mr. Rice. 

Mr. RICE. Thank you, Mr. Chairman. 

I have said this before, but I think the United States could be 

the most competitive country in the world, but we have a noose of 

regulation around our own necks and we strangle our own selves 

and make ourselves not competitive. I think what Mr. Davis was 

referring to earlier with the uncertainty created by this veto power 

just is one more thing that makes us less competitive when it takes 

now 5 years instead of 2 years in 1972 to get one of these projects 

approved. It makes us less competitive. 

That combined with our highest tax rate in the world and other 

regulatory burdens that companies have to face when they get here 

sends more and more jobs overseas every year, and what I want 

to do is fight that at every turn. 

I am curious. What standard does the EPA, Mr. Parenteau, have 

to meet before they issue one of these vetoes? 

Mr. PARENTEAU. Unacceptable adverse impact to five specified 

resources: water supplies, fish and wildlife habitat, et cetera. So 

the statute has a very high standard to meet, unacceptable adverse 

impacts, and a very narrow set of special aquatic resources. 

Mr. RICE. Mr. Quinn, do you think that is an objective standard? 

Is it easily measurable? Is it subject to discretion? 

Mr. QUINN. Well, I think standards like that are in the eye of 

the beholder. What is unacceptable, start with that particular. It 

has become pretty subjective. What one decisionmaker deems unacceptable could change with a different decisionmaker. That is part 

inherently in a lot of the process. 

I think the discussion here today is, well, as subjective as that 

might be, when are you going to make that decision. Is it now? And 

when you make that, are you going to adhere to it or have somebody else come in later and say, ‘‘I want to revisit that decision’’? 

Mr. RICE. Yes. I have personal experience with 404(q) elevation 

letter that was issued by the EPA out of Atlanta. So to say this 

has only been done three times, maybe under 404(b) or (c) or whatever we are talking about here, maybe that is true, but here this 

was issued prospectively out of Atlanta before the environmental 

reports had even been completed. Before any mitigation plan had 

ever been submitted, the EPA Regional Administrator sends a letter that says that I–73 will have an unacceptable impact on South 

Carolina. 

It absolutely has a chilling effect without the data in front of 

them and the fact that any bureaucrat would have that power I 

think is shocking in this country. I think that if we are going to 

have any veto power, it needs to be made very, very objective and 

37 

clear and when it can be exercised, and I do not think we should 

have one at all. That is what the Army Corps job is, is to evaluate 

these things, and it certainly should not be done until all of the 

facts are in. 

So I do not have any other questions other than to say I have 

seen this impact and it has a huge shilling and anti-competitive effect. 

Thank you. 

Mr. GIBBS. Mr. Massie. 

Mr. MASSIE. I want to start out with a quick observation. All of 

the successful business owners that I know, whether it is the Mom 

and Pop shop or a big corporation or entrepreneurs just getting 

started, they have one thing in common. Although they might be 

ideologically opposed to the rules that they are playing under, all 

of the successful ones are pragmatists. I mean, they look at the 

rules. They say, ‘‘I understand. Maybe I do not agree with these 

rules, but I am going to play by these rules.’’ 

But in return all of the ones in my district, and again, this goes 

for a one-man shop or a big corporation, they ask certain things 

about these rules. Make sure they are understandable. Do not 

change the rules during the game while I am playing the game. 

And make sure my competitors are playing by the same rules. 

That is what is troubling about these recent revocations of permits, is that we are changing the rules during the game. We do not 

know that it is going to be applied uniformly to all of the competitors, and how do you understand it at the end of the day? 

Ironically, a lot of these business people who may be ideologically 

opposed to these rules find at the end of the day that obtaining 

that permit provides an air of certainty and legitimacy to their endeavor that could actually, although pursuing the permit is hard 

in getting it, once it is obtained, it makes it easier to get the capital 

that they go seek. 

And let me make another observation about capital and investors. They are all uniformly risk averse. When I went out and 

sought investment for my own company, I knew it was too risky 

to go to a bank. So I went to the venture capitalists because I 

heard, you know, they will invest in risky things, private capital. 

What did I find out? They spent all of their time trying to reduce 

the risk because that is the number one attenuating factor on the 

valuation of your endeavor, is the risk involved. 

I think there are observations that business owners make. Mr. 

Parenteau, you quoted Senator Muskie. I would like to quote him, 

too. In 1972 during the deliberations of the Clean Water Act, he 

said there were three essential elements to the Clean Water Act: 

uniformity, finality, and enforceability. 

Do you agree that finality is an important criteria? 

Mr. PARENTEAU. Absolutely. 

Mr. MASSIE. I do, too, and that is what disturbs me about this. 

People watching this discussion might say, well, if somebody is a 

bad actor or they violate the conditions of the permit, I understand 

it could be revoked, but it seems to me that is not what we are 

talking about here. It sounds like the EPA is asking to change the 

rules of the game after the game has started if they decide to 

change their permitting methodology or maybe they failed to do all 

38 

of their due diligence. They want more time after they have issued 

the permit. 

In fact, when Congress passed the Clean Water Act, they intended for expeditious decisions on section 404 permits. Specifically, Congress instructed to the maximum extent practical decisions on section 404 permits will be made within 90 days. This 

seems to blow a hole, a loophole, in that big enough to drive a 

truck through. Now the EPA has no onus to complete their due 

diligence in that 90-day window as Congress intended. 

And just quickly, I want to ask a couple questions, but you said 

that the new definition of the waterways that are affected or under 

the jurisdiction of the EPA will not change their jurisdiction or expand it, but twice in committee hearings the EPA Director or Assistant Director has testified to me it is going to be a $100 million 

to $200 million cost to the economy to promulgate the new definition. 

So it is hard for me to see how it does not have a bigger authority. 

Mr. Kovacs, I had a quick question for you. We have been talking 

about mining and this in the context of a mining permit, but can 

you talk about other industries that are affected by 404 permits 

and how recent treatment of 404 permits within the mining context 

could have ramifications in other industries and what those other 

industries are? 

Mr. KOVACS. Well, certainly. I mean, the way it is structured 

right now virtually anyone who moves dirt by a waterway would 

have that problem, and mining may be controversial, but let us 

take a big box store, which can also be controversial to a community, but let us say, for example, you go in, you go through the entire permitting process, you have a wetland nearby, and you get a 

404 permit. You start construction, and then 3 months later EPA 

decides, well, maybe we do not like the runoff from the stormwater 

from the big box store, and maybe they came to that decision because the community decided they did not want the big box store. 

All of a sudden you have got the veto available. So they vetoed 

the permit 3 months in, and there was a mall case, and I think the 

professor worked on that 10 years ago or 20, but what happens is 

all of a sudden the permit is revoked. You have to ask: well, does 

construction have to stop? 

Well, yes. How can the company, you know, plan to redo the permit? Well, they are going to have to do that during whatever time 

they have to deal with the bank. What happens to the financing? 

What happens to the workers that are on the site? 

That is the single problem with the revocation after the permit 

has been finalized. And in this particular situation, EPA had all of 

the facts, and it decided to go forward with the permit. It was 4 

years later that it changed its mind. 

So when you talk about certainty, the certainty is when they review those documents, they are saying that this person or this permit complies with everything, and after that point when it is 

issued, they have administrative powers to take it back. They have 

civil fines up to $1 million dollars. They can put the person in jail 

for a very, very long period of time. I think it is 15 years. During 

39 

the process if there is harm to the community, the citizens can sue. 

You have got emergency powers. You have got injunctive relief. 

What is so magic about just stopping the project? And I think 

that the question I think Congressman Bishop asked, and it is a 

great question, is why is it different now. I think because there are 

so many things spinning around. There are more regulations. It is 

costly. It is taking more time. It is taking 5 years instead of 2 

years. You have got citizen suits. You have got sue and settle, and 

when you put all of this together, when you go through this process, ask Cape Wind, 12 years of trying to get permits and lawsuits. 

If you have got the money, maybe you can make it, but the financing is going to walk away well before the permit is approved. 

Mr. MASSIE. My time has expired, but just to complete that observation, it is not just mining that is going to be affected. 

Mr. KOVACS. It is pipelines, big box stores. 

Mr. MASSIE. Home builders. 

Mr. KOVACS. Home builders, rail lines. 

Mr. GIBBS. The point is delays cost money, right? 

Thank you. 

Mrs. Capito. 

Mrs. CAPITO. Thank you, Mr. Chairman. 

And I appreciate the panel. 

I wanted to ask a question to kind of set up the context for me, 

and I will kind of go through the line here starting with Mr. 

Kovacs, although I realize you are representing a lot of different 

types of businesses. So maybe I will start with Mr. Quinn. 

The average length of time that it takes companies in your business to obtain a 404 permit after they filed an application, do you 

have any idea what the average length of time is? 

Mr. QUINN. Well, a number of years ago a lot of permitting was 

done under the general permit system because many of our operations have multiple other permits that look at very much the 

same thing: water, reclamation, and planning, and so forth. 

Over the years the policy has been pushed to diminish the availability of the general permits that would take several months to obtain and pushed more into individual permits which can take several years. So we have gone from several months to several years. 

I can tell you for a large minerals metal mine in this country we 

are looking at 7 to 10 years to get all our permits together. So 

when the length of time already diminishes the value—— 

Mrs. CAPITO. Right. 

Mr. QUINN [continuing]. And you put the uncertainty of now you 

may go to a meeting with some lenders and they say it is going to 

take you that long, we say it is worth it because we have the certitude that once this permit is issued—— 

Mrs. CAPITO. Right. 

Mr. QUINN [continuing]. In the United States we live by it. In Indonesia, that may not be the case. Well, these decisions will make 

that guarantee much—— 

Mrs. CAPITO. So we are talking in excess probably of 5 years. 

Mr. Ivanoff, what about with you all in the road and transportation building? 

Mr. IVANOFF. Well, as I mentioned earlier, maybe you were out, 

but I mentioned to Mrs. Kirkpatrick that we just did a study for 

40 

Federal Highway Administration, and the entire environmental review process and approval process has gone from about 21⁄2, just 

over 2 years back in the 1970s to in the last 5 to 8 years we are 

more than 5 years. So it has more than doubled. 

And part of it also depends on which jurisdiction of the Army 

Corps you get involved with as well because of the different approvals related to wetland banking, for example, which is one of the 

mitigating techniques that we use. 

Mrs. CAPITO. Right. And I would imagine, too, whatever Corps, 

for instance, our Huntington Corps is very busy on the coal mine 

side. So there is a backlog. I know that to be true. 

What about Ms. Pilconis? 

Ms. PILCONIS. Yes. Thank you. 

So the AGC Association represents all different facets of commercial construction. So our members are building everything from 

buildings, shopping centers, warehouse, and then the highways and 

other things that we have talked about here today. 

So what AGC contractors are telling me is that for a 404 permit, 

just talking about that permit specifically— 

Mrs. CAPITO. Right. 

Ms. PILCONIS [continuing]. Generally anywhere between 18 and 

24 months. For a general permit, a nationwide permit, 6 to 8 

months. 

Mrs. CAPITO. Has that increased as well, like Mr. Ivanoff said, 

over the last several years or is that pretty much steady through 

the 404? 

Ms. PILCONIS. It has increased. It has increased over the last several years. 

Mrs. CAPITO. OK. So we talked about the finality of the commitment of having a final recommendation, and I think that not only 

weighs into the financing aspect of it, but also the predictability of 

that community, and some of the things that I have been trying to 

bring forward, particular in speaking with the EPA, is to try to get 

that consideration for the economic and job impact of the decisions 

that they are making. 

For instance, in the case of Spruce, I mean, that was a huge blow 

to the economics of that area of the State I represent, West Virginia. 

In terms of your companies, Mr. Kovacs, at the Chamber, are you 

satisfied that this process really does include an economic and jobs 

review or do you think it would be better served to either enlarge 

that or remove it or what are your feelings on that? 

Mr. KOVACS. Well, actually I am thrilled that you asked that 

question. Each one of the environmental statutes starting when 

they were drafted in the 1970s had a provision in there which requires a continuous evaluation of job loss and adverse economic impact. In EPA, we had avoided this in the air area and in the 40 

years that they have had that requirement they have never done 

one, and the same I would assume would be true of water, and I 

know they have not done any in solid waste. 

So that is the first thing, but the second thing is even in terms 

of regulatory impacts as to looking at jobs, which they do occasionally, EPA does only regulatory impact on about 2 percent of its 

rules. So if you went back 15 years and you had 7,000 rules, you 

41 

might have 146 that they look at something and in only about, I 

think, only two did they do a whole economy modeling. 

So they really are not looking at jobs at all, but more importantly 

the continuous evaluation of the job impact is something very important because when these regulations hit, they do not hit the 

whole country. They hit communities, and people have to really appreciate that. 

Mrs. CAPITO. I would agree there, and I would contend, too, that 

maybe that is not what they base their decision on, but it has to 

be part of the bigger picture when you are looking at what direction you are going to go, and we have found that to be lacking as 

well. 

I thank you all for holding out and letting me be the last, or I 

think I am the last questioner. Thank you very much. 

Mr. GIBBS. Mr. Jolly. 

Mr. JOLLY. Thank you, Mr. Chairman. 

Mrs. CAPITO. Sorry, Mr. Jolly. 

Mr. JOLLY. To the witnesses, thank you. 

Mr. Faulk, as a George Mason law graduate, thank you for being 

here. 

I had a quick question for you. Is the prospective veto authority 

just zoning by another name? 

Mr. FAULK. I think it could become that as EPA is applying it 

because, in fact, what can happen here as they withdraw whole 

swaths of land and watersheds out of consideration for permitting 

activities, then you are basically precluding any sort of exploration, 

production, mining, extraction or any other sort of useful activities 

taking place on that piece of land. 

Mr. JOLLY. Do you think 404(c) should be changed? 

Mr. FAULK. I think it should. I think it should definitely be restricted to require the EPA in this extensive permitting process to 

make its objections known then. To say why now afterwards really 

presume the fact that they did not have an adequate opportunity 

to make their points known. 

Mr. JOLLY. Mr. Parenteau, do you think the law should be 

changed? 

Mr. PARENTEAU. No. Congress created this situation. You understand this was a political compromise in 1972. 

Mr. JOLLY. No, I understand. 

Mr. PARENTEAU. If you want to change it, my recommendation 

would be give it to EPA. Give the whole authority to EPA. Put it 

where it belongs. 

Mr. JOLLY. OK. Mr. Kovacs, the President has been flying 

around the country taunting the Congress about passing infrastructure bills, which frankly, we will do today and very 

unceremoniously he has indicated he will sign. 

Can you tell us a little bit about your Project, No Project study 

and the results of what decisions by the administration have done 

for jobs in the economy? 

Mr. KOVACS. Certainly. The Project, No Project did several 

things. One is it asked a very simple question. In the middle of the 

recession, the Great Recession, we wanted to know how much investment was out there, the private investment, that was going to 

go into projects that could not get permits, a very simple question. 

42 

So we put it down. We localized it to electric generation, and 

there were 351 projects in March of 2010 seeking to get a permit, 

and they were willing to invest $561 billion, which would have created about 1.9 million jobs per year for about 7 years during the 

construction period. It was all hung up on permits. 

About the same time when the Congress was doing the Recovery 

Act, there were questions around saying we are just going to fund 

the shovel-ready projects, and we were audacious enough to say 

there are not any. If you have got a permit, you are building. 

So we got provision in the Recovery Act. Senator Barrasso and 

believe it or not, Senator Boxer, they got a provision in which said 

that for a Recovery Act project, they have to use the most expeditious way possible, which did not look at all of these ‘‘whenevers.’’ 

It just said we are going to use the most expeditious way possible 

unless there is a major problem. 

We did not know how many it was going to affect, but out of the 

214,000 projects that were funded during the Recovery Act, 192,000 

of the projects were funded through the most expeditious way possible. Had they all had to go through an entire environmental review, you would not have spent any of that money. 

So the entire permit process is broken, and where the administration is is they keep on saying they want permits streamlined, 

and we all want permits streamlined, but their version of permit 

streamlining has no deadlines. Our version of permit streamlining 

or what we think of it as is it has a lead agency. The lead agency 

coordinates all the other agencies. All the other agencies have 90 

days in which to say they are going to be in the project or out of 

the project, and then they make a decision on the project within 

2 years as to whether it gets the permit. 

It does not change any substantive laws. It just says the agencies 

have a duty, and the duty is to review the permits and make a decision, and frankly, after that the courts are going to take over if 

people want to sue. 

Mr. JOLLY. Very good. Thank you. 

Ms. Pilconis, this type of delay, what does it mean for exposure 

of developers, construction companies, contractors, the financial exposure? And I will ask you to be very quick. I have one more question. 

Ms. PILCONIS. OK. Financial exposure has to do with all of the 

money that they are putting in upfront to get the projects going, 

you know, whether you are talking about the owner of the project 

or the general contractor, buying the property, getting the financing, the insurance, the bonding. 

Mr. JOLLY. Surety bonding. 

Ms. PILCONIS. Exposure with bonding is huge. You know, bonding is a guarantee that the project is going to be done, and if you 

cannot move forward with the project, the construction company is 

going to have to pay that money back. 

Mr. JOLLY. And they bear the risk. 

Ms. PILCONIS. The bonding agency. 

Mr. JOLLY. The construction company bears the risk. 

Ms. PILCONIS. Absolutely. 

43 

Mr. JOLLY. OK. One last question. I apologize for running out of 

time. One last question, Mr. Quinn. Has Senator Muskie’s intent 

been perverted by the EPA’s use of retroactive vetoes? 

We have heard a lot about it today. 

Mr. QUINN. Yes. 

Mr. JOLLY. Would you consider Senator Muskie’s intent to have 

been changed by the EPA? 

Mr. QUINN. I think the way it has been exercised lately is a departure from what was originally envisioned in terms of the time 

in process and coordination that was supposed to go on. 

Mr. JOLLY. Do you think the law should be changed? 

Mr. QUINN. I think the law should be clarified and restore the 

certainty that preexisted. Yes, I think there is proper context and 

a proper process to get these decisions made properly and people 

can rely on those decisions. If they need to be revisited, revisit it 

for legitimate reasons, not for temporal reasons that somebody else 

has taken over. 

Mr. JOLLY. Thank you very much. Thank you to each of you. 

Mr. GIBBS. At this time I will recognize Mr. Bishop for the purpose of a unanimous consent request. 

Mr. BISHOP. I ask unanimous consent to enter into the record the 

statement of the ranking member, Mr. Rahall. 

Mr. GIBBS. So ordered. 

Mr. BISHOP. Thank you, Mr. Chairman. 

Mr. GIBBS. This concludes our hearing. I want to thank our panelists again for coming in and testifying. Thank you very much. 

[Whereupon, at 11:48 a.m., the subcommittee was adjourned.] 

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