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	<title> - BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: THE ROLE OF FEDERAL AGENCIES IN WATER INFRASTRUCTURE</title>
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	[House Hearing, 115 Congress]
	[From the U.S. Government Publishing Office]





	BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: THE ROLE OF FEDERAL
	AGENCIES IN WATER INFRASTRUCTURE

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

	(115-5)

	HEARING

	BEFORE THE

	SUBCOMMITTEE ON
	WATER RESOURCES AND ENVIRONMENT

	OF THE

	COMMITTEE ON
	TRANSPORTATION AND INFRASTRUCTURE
	HOUSE OF REPRESENTATIVES

	ONE HUNDRED FIFTEENTH CONGRESS

	FIRST SESSION

	__________

	MARCH 9, 2017

	__________

	Printed for the use of the
	Committee on Transportation and Infrastructure





	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]





	Available online at: http://www.gpo.gov/fdsys/browse/
	committee.action?chamber=house&committee=transportation

	______

	U.S. GOVERNMENT PUBLISHING OFFICE

	24-656 PDF WASHINGTON : 2017
	-----------------------------------------------------------------------
	For sale by the Superintendent of Documents, U.S. Government Publishing
	Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
	DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
	Washington, DC 20402-0001































	COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

	BILL SHUSTER, Pennsylvania, Chairman

	DON YOUNG, Alaska PETER A. DeFAZIO, Oregon
	JOHN J. DUNCAN, Jr., Tennessee, ELEANOR HOLMES NORTON, District of
	Vice Chair Columbia
	FRANK A. LoBIONDO, New Jersey JERROLD NADLER, New York
	SAM GRAVES, Missouri EDDIE BERNICE JOHNSON, Texas
	DUNCAN HUNTER, California ELIJAH E. CUMMINGS, Maryland
	ERIC A. ``RICK'' CRAWFORD, Arkansas RICK LARSEN, Washington
	LOU BARLETTA, Pennsylvania MICHAEL E. CAPUANO, Massachusetts
	BLAKE FARENTHOLD, Texas GRACE F. NAPOLITANO, California
	BOB GIBBS, Ohio DANIEL LIPINSKI, Illinois
	DANIEL WEBSTER, Florida STEVE COHEN, Tennessee
	JEFF DENHAM, California ALBIO SIRES, New Jersey
	THOMAS MASSIE, Kentucky JOHN GARAMENDI, California
	MARK MEADOWS, North Carolina HENRY C. ``HANK'' JOHNSON, Jr.,
	SCOTT PERRY, Pennsylvania Georgia
	RODNEY DAVIS, Illinois ANDRE CARSON, Indiana
	MARK SANFORD, South Carolina RICHARD M. NOLAN, Minnesota
	ROB WOODALL, Georgia DINA TITUS, Nevada
	TODD ROKITA, Indiana SEAN PATRICK MALONEY, New York
	JOHN KATKO, New York ELIZABETH H. ESTY, Connecticut,
	BRIAN BABIN, Texas Vice Ranking Member
	GARRET GRAVES, Louisiana LOIS FRANKEL, Florida
	BARBARA COMSTOCK, Virginia CHERI BUSTOS, Illinois
	DAVID ROUZER, North Carolina JARED HUFFMAN, California
	MIKE BOST, Illinois JULIA BROWNLEY, California
	RANDY K. WEBER, Sr., Texas FREDERICA S. WILSON, Florida
	DOUG LaMALFA, California DONALD M. PAYNE, Jr., New Jersey
	BRUCE WESTERMAN, Arkansas ALAN S. LOWENTHAL, California
	LLOYD SMUCKER, Pennsylvania BRENDA L. LAWRENCE, Michigan
	PAUL MITCHELL, Michigan MARK DeSAULNIER, California
	JOHN J. FASO, New York
	A. DREW FERGUSON IV, Georgia
	BRIAN J. MAST, Florida
	JASON LEWIS, Minnesota

	(ii)




	Subcommittee on Water Resources and Environment

	GARRET GRAVES, Louisiana, Chairman

	ERIC A. ``RICK'' CRAWFORD, Arkansas GRACE F. NAPOLITANO, California
	BOB GIBBS, Ohio LOIS FRANKEL, Florida
	DANIEL WEBSTER, Florida FREDERICA S. WILSON, Florida
	THOMAS MASSIE, Kentucky JARED HUFFMAN, California
	RODNEY DAVIS, Illinois ALAN S. LOWENTHAL, California
	MARK SANFORD, South Carolina EDDIE BERNICE JOHNSON, Texas
	ROB WOODALL, Georgia JOHN GARAMENDI, California
	TODD ROKITA, Indiana DINA TITUS, Nevada
	JOHN KATKO, New York SEAN PATRICK MALONEY, New York
	BRIAN BABIN, Texas ELIZABETH H. ESTY, Connecticut
	DAVID ROUZER, North Carolina CHERI BUSTOS, ILLINOIS
	MIKE BOST, Illinois JULIA BROWNLEY, California
	RANDY K. WEBER, Sr., Texas BRENDA S. LAWRENCE, Michigan
	DOUG LaMALFA, California PETER A. DeFAZIO, Oregon (Ex
	A. DREW FERGUSON IV, Georgia Officio)
	BRIAN J. MAST, Florida, Vice Chair
	BILL SHUSTER, Pennsylvania (Ex
	Officio)

	(iii)



















	CONTENTS

	Page

	Summary of Subject Matter........................................ vii

	TESTIMONY

	Jerry Ellig, Ph.D., Senior Research Fellow, Mercatus Center at
	George Mason University........................................ 7
	Gary McCarthy, Mayor, Schenectady, New York, on behalf of the
	U.S. Conference of Mayors...................................... 7
	John Linc Stine, Commissioner, Minnesota Pollution Control
	Agency, on behalf of the Environmental Council of the States... 7
	Mike Inamine, Executive Director, Sutter Butte Flood Control
	Agency......................................................... 7
	Jonathan Kernion, President, Cycle Construction Company LLC, on
	behalf of the Associated General Contractors of America........ 7
	Kathy L. Pape, Senior Vice President Regulatory Policy and
	Business Development, American Water, on behalf of the
	Bipartisan Policy Center, Executive Council on Infrastructure.. 7
	Kevin DeGood, Director of Infrastructure Policy, Center for
	American Progress.............................................. 7

	PREPARED STATEMENTS SUBMITTED BY WITNESSES

	Jerry Ellig, Ph.D................................................ 47
	Gary McCarthy.................................................... 52
	John Linc Stine.................................................. 66
	Mike Inamine..................................................... 107
	Jonathan Kernion................................................. 114
	Kathy L. Pape.................................................... 121
	Kevin DeGood..................................................... 129

	SUBMISSIONS FOR THE RECORD

	Hon. Grace F. Napolitano, a Representative in Congress from the
	State of California, submission of letter of March 1, 2017,
	from John Linc Stine, Commissioner, Minnesota Pollution Control
	Agency, and President, ECOS, to Hon. Mick Mulvaney, Director,
	Office of Management and Budget, and Hon. Scott Pruitt,
	Administrator, U.S. Environmental Protection Agency............ 22
	Gary McCarthy, Mayor, Schenectady, New York, on behalf of the
	U.S. Conference of Mayors, response to question for the record
	from Hon. Grace F. Napolitano, a Representative in Congress
	from the State of California................................... 65
	Hon. Garret Graves, a Representative in Congress from the State
	of Louisiana, submission of the following documents:

	Written statement of Larry A. Larson, CFM, P.E., Director
	Emeritus, Association of State Floodplain Managers......... 136
	Letter of March 8, 2017, from Laura Ziemer, Senior Counsel
	and Water Policy Advisor, Trout Unlimited, to Hon. Garret
	Graves, Chairman, and Hon. Grace F. Napolitano, Ranking
	Member, Subcommittee on Water Resources and Environment.... 153
	Written statement of Mary Grant, Campaign Director, Public
	Water for All, Food and Water Watch........................ 156
	Letter of March 8, 2017, from National Rural Water
	Association, to Hon. Garret Graves, Chairman, and Hon.
	Grace F. Napolitano, Ranking Member, Subcommittee on Water
	Resources and Environment.................................. 161
	Article of November 4, 2016, ``Water Strategies for the Next
	Administration,'' by Peter H. Gleick, Science Magazine..... 163
	Blog post of November 3, 2016, ``New Major U.S. Water Policy
	Recommendations,'' by Peter Gleick......................... 166
	Op-ed of February 16, 2017, ``Oroville Dam Crisis Shows Why
	We Can't Take Water Infrastructure for Granted,'' by Peter
	Gleick, The Hill........................................... 168
	Written statement of American Rivers......................... 171
	Written statement of John A. Coleman, Chief Executive
	Officer, Bay Planning Coalition............................ 180
	Report, ``The Future Role of Dams in the United States of
	America,'' January 24, 2017, by Michelle Ho, et al.,
	published by the American Geophysical Union................ 184
	Resolution on Reservoir Sustainability, from the Subcommittee
	on Sedimentation, a subgroup of the Advisory Committee on
	Water Information.......................................... 201




	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


	BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: THE ROLE OF FEDERAL
	AGENCIES IN WATER INFRASTRUCTURE

	----------


	THURSDAY, MARCH 9, 2017

	House of Representatives,
	Subcommittee on Water Resources and Environment,
	Committee on Transportation and Infrastructure,
	Washington, DC.
	The subcommittee met, pursuant to notice, at 10:02 a.m. in
	room 2167, Rayburn House Office Building, Hon. Garret Graves
	(Chairman of the subcommittee) presiding.
	Mr. Graves of Louisiana. The subcommittee will come to
	order. Good morning, and thank you for being here. Before I
	begin introducing our witnesses and doing opening statements
	this morning, I want to dispense with some of the unanimous
	consent requests.
	I ask unanimous consent that members not on the
	subcommittee be permitted to sit with the subcommittee at
	today's hearing and ask questions. Is there any objection?
	Without objection, so ordered.
	I ask unanimous consent that written testimony submitted on
	behalf of the following be included in this hearing's record:
	from the Association of State Floodplain Managers; from Trout
	Unlimited, including attached report prepared for the Building
	America Investment Initiative; \1\ from Food and Water Watch;
	from the National Rural Water Association; three articles by
	Peter Gleick; from American Rivers; from the Bay Planning
	Coalition; a publication from the American Geophysical Union;
	and a resolution from the Subcommittee on Sedimentation, a
	subgroup of the Advisory Committee on Water Information.
	---------------------------------------------------------------------------
	\1\ The 100-plus-page report entitled ``40 Proposed U.S.
	Transportation and Water Infrastructure Projects of Major Economic
	Significance'' prepared for the U.S. Department of the Treasury on
	behalf of the Build America Investment Initiative can be found online
	at
	https://www.treasury.gov/connect/blog/Documents/final-infrastructure-
	report.pdf.
	---------------------------------------------------------------------------
	Without objection, so ordered.

	[The information can be found on pages 136-201.]

	I ask unanimous consent that the record remain open for 30
	days after this hearing in order to accept written testimony
	for the hearing record.
	Without objection, so ordered.
	And finally, I ask unanimous consent that the record of
	today's hearing remain open until such time as our witnesses
	have provided answers to any questions that may be submitted to
	them in writing.
	Without objection, so ordered.
	Thank you very much, again, for being here today, and
	looking forward to hearing from our diverse witness panel
	today.
	The impetus for this hearing was thinking about the fact
	that there has been a lot of talk about a major infrastructure
	package, about the talk of investment of $1 trillion in
	addressing some of America's infrastructure needs. If we are,
	say, a year out from beginning, from moving forward on that
	implementation, what are some of the things that we should be
	thinking about right now? What are some of the obstacles to
	delivering, to efficiently delivering infrastructure? What are
	some of the impediments or opportunities to improve our ability
	to quickly get these projects on the ground?
	And that is what we are doing here today. We brought,
	again, a diverse panel of witnesses to come provide to us their
	insight and thoughts on some of the things that we could be
	doing to help improve this process.
	In the short time that we have been named subcommittee
	chair, we have met with dozens and dozens of non-Federal
	sponsors, of local governments, of State governments, and other
	organizations from across the country, raising strong concerns
	about regulations and permitting processes that are in place
	that simply do not provide value.
	And I want to be clear: the need for regulations that
	ensure the protection of our environment, ensure the protection
	of the health and safety of Americans, things that look to make
	sure of the efficacy of investments, the cost-to-benefit ratios
	are all things that make a lot of sense. But in many cases, we
	have found regulations are solutions in search of problems. And
	that raises strong concern.
	So, again, looking forward to hearing from our witnesses
	today.
	And, with that, I am going to turn to the ranking member,
	Mrs. Napolitano.
	Mrs. Napolitano. Thank you, Mr. Chair, and welcome to the
	Subcommittee on Water Resources and Environment as the new
	chairman.
	Mr. Chairman, when you and I met just over a month ago to
	discuss a potential agenda for Congress, I suggested we start
	those areas where we could find common ground. This
	subcommittee is most successful when we work together in a
	bipartisan fashion to rebuild our Nation's crumbling
	infrastructure and prepare our communities for challenges they
	will face in decades to come.
	Without question, this Nation is witnessing a changing
	water-related environment, and those changes are having a
	profound implication on our local communities, our national
	environment, and our overall way of life. Ironically, our
	respective districts are facing very different challenges:
	yours with too much water, and mine, too often, too little. But
	the reality is that both districts must adapt and adequately
	prepare for what lies ahead.
	I am pleased that our first hearing focuses on an area that
	we should find common ground: the need for increased investment
	in our Nation's water-related infrastructure, especially
	Federal investment. We all know that the challenges facing our
	communities are in addressing the local water resources needs
	and adapting to a changing world, whether the issue is
	crumbling dams and levees, outdated sewers and stormwater
	conveyances, inefficient navigation corridors, or large-scale
	ecosystem restoration authorities.
	I am certain that every Member in this room can point to
	water-related challenges facing their constituents at home.
	Yet, if your elected officials are like mine, the central theme
	in meeting these challenges is the help needed for additional
	funding. As former chief of engineers once noted before this
	subcommittee, by failing to officially fund projects, we
	ultimately fail the American taxpayer by delaying the
	realization of project benefits, and by unnecessarily
	increasing costs due to these delays.
	Similarly, when we fail to provide the necessary resources
	to invest in, update, and adequate maintain our infrastructure,
	we should not be surprised when systems fail when communities
	are placed at risk, and the cost begins to become greater, and
	when our State and local economies underperform.
	My communities want to do the right thing. They want to
	provide our citizens with safe, reliable, affordable water and
	wastewater services, but they cannot do it alone. They are
	calling on us in Congress to renew the Federal commitment on--
	to our water-related infrastructure.
	I was excited when infrastructure investment became a
	recurring theme during the 2016 Presidential election. I was
	equally pleased when the President made his commitment to
	triple the funding level for the Clean and Drinking Water State
	Revolving Funds.
	This subcommittee needs to take the next logical step and
	advance legislation like a reauthorization of the Clean Water
	State Revolving Fund, to renew the Federal commitment to
	meeting our community's infrastructure needs. This
	straightforward legislation last approved on a bipartisan basis
	by this committee in 2009 will help our communities meet the
	challenge of a changing water-related environment and create
	well-paying jobs in the United States.
	But we need to do much more. We need to address the very
	real affordability concerns raised by the communities in a way
	that does not weaken the Clean Water Act protections, and
	ensures our neighborhoods have access to clean, safe water and
	reliable waters--local environments. We need to look at
	targeting more additional Federal resources to our urban and
	rural communities when the traditional tools fail to meet the
	financial challenges these communities face on a daily basis.
	Mr. Chairman, I believe this committee can play an integral
	part in creating and sustaining family-wage jobs, and ensuring
	U.S. economic competitiveness and improving the daily lives of
	all Americans. And I do look forward to working with you on a
	bipartisan basis to honor these commitments to our communities.
	And I yield back.
	Mr. Graves of Louisiana. Thank you. And again, I look
	forward to working with you and continuing to find common
	ground.
	With that, I yield to the chairman of the full committee,
	the gentleman from Pennsylvania, Mr. Shuster.
	Mr. Shuster. Thank you, Chairman Graves. And this is a
	great way to start off your first hearing as chairman of this
	subcommittee, with a hearing like this. So I appreciate it. I
	won't tell anybody our private advice I gave you beforehand,
	but I know you will do extremely well.
	This is an important hearing. And, as the chairman
	mentioned, the President of the United States has said that he
	wants to figure out how to spend $1 trillion on infrastructure.
	And look, $1 trillion is not going to come from the Federal
	Government. It has got to come from a number of different
	sources. There has to be a Federal component to it. We know--
	look at the Highway Trust Fund, the Harbor Maintenance Trust
	Fund, the Inland Waterways Trust Fund, other sources of
	revenue. We have got to figure out how to get the Federal
	revenue up to help with these projects and do its fair share
	and do its important part of the work.
	Public-private partnerships are part of that solution. I
	think it is a good tool in the toolbox, but it is not the
	toolbox. It is in there to help and assist, and we got to
	figure out ways to do that better. But there is a lot of
	private money and local money out there.
	Just in my home State of Pennsylvania there are two $4
	billion pipeline projects, 100 percent privately funded, and we
	have got Government agencies getting in the way of moving these
	forward. And I look across this country and there are billions
	of dollars across this country that are stuck in the mud, so to
	speak, with these Government agencies, and most of them, many
	times, it is the Federal agencies. And so reform has to be a
	huge part of this effort.
	And I know that you folks here, you all deal with the Corps
	of Engineers. And I know, as my experience has been across this
	country, it takes far too long to get these projects approved.
	And, in many cases, they take years to do it, and the projects
	don't change that much because they were pretty sound projects
	to begin with. So it is not just the Corps, it is FERC, it is--
	again, you go across the Government agencies.
	They have got to get to the table at the same time, they
	have got to get these projects done. Because if you think about
	the Interstate Highway System, they built 47,000 miles of road,
	of interstate highway, in 14 years. I have 60 miles of roadway
	that took 35 years to get through my district. And that is just
	unthinkable in today's society, with the technology, the
	science we have to be able to check these different projects
	out. We ought to be able to move them forward, and that is
	something that I know the chairman, this chairman, the former
	chairman, Mr. Gibbs, and myself are all committed to getting
	these reforms in place to move these projects forward.
	When you look at the lack of investment in our ports, our
	harbors, inland waterways, the locks, the dams, flood
	protection, environmental restoration, these are all things
	that we need to move forward with much faster than we have in
	the past. And I think that we can do that.
	One of the things that I will be supporting moving
	forward--that I have always supported, but we got to get the
	system put in place in the right way--is the Harbor Maintenance
	Trust Fund. Those dollars, $1.8 billion, we only spent $1
	billion on harbors and ports. The other $800 million, I am not
	sure where it goes, here and there and everywhere. But those
	dollars were put in that fund, and the trust was that it was
	going to be spent on those projects and those ports and those
	harbors.
	So again, I talked with the President, his people. We have
	got to get that into their budget. It makes it easier for us to
	get it into our budget. So I am committed to working forward to
	see that those dollars get spent on what their intended
	purposes were.
	And when you look at that $800 million, there is probably a
	three-, four-, five-, six-times multiplier, because when the
	Federal Government comes to the table with these dollars, the
	locals, the States, the private sector are all going to make
	the investments needed to do what they have to do in those
	ports and harbors around the country.
	So again, for me this is an exciting time. Never did I
	think that a Republican President would be the one to stand up
	at an inaugural address and use the word ``infrastructure,''
	but it happened. And I am just glad to be here and be part of
	this, and I am really excited about this hearing today, and as
	we go forward.
	So thank you all very much. I yield back.
	Mr. Graves of Louisiana. Thank you, Mr. Chairman. And now I
	recognize the ranking member, Mr. DeFazio.
	Mr. DeFazio. Thank you, Mr. Chairman. I want to both
	welcome the witnesses, and I want to congratulate you on your
	first hearing as chair. I know you are vitally interested in
	water issues, coming from a somewhat watery State, shall we
	say, and I am pleased to be working with you. And I am pleased
	that today we are jointly sending a letter to President Trump,
	urging him to fully utilize the Harbor Maintenance Trust Fund
	as a part of his $1 trillion infrastructure plan.
	As Chairman Shuster noted, $9 billion have been diverted
	into a theoretical fund over at the Treasury. Every day, every
	American who buys an imported good pays a little bit more for
	it with the understanding that that is going to facilitate the
	movement of freight in and out of the United States through our
	ports, and that more efficient movement would actually pretty
	much offset the minuscule tax. Unfortunately, if you don't
	spend the tax, then you still have the delays, the ships parked
	miles out into the ocean, and so people are paying the tax, the
	money isn't being spent, and they are paying more for the
	imported goods because of the delays.
	We are breaking faith with the American people. It seems
	kind of like a no-brainer. On a daily basis, our 59 busiest
	harbors have 35 percent availability of maximum depth. And that
	is not even to deal with the new challenges of the post-Panamax
	ships. So I am hopeful that we can move forward with that.
	I did get a version of that, somewhat awkward and crippled,
	out of this committee because of the budget rules--which are
	waived on a daily basis around here, but in that case, boy,
	they had to be enforced--so I am hopeful we will do it honestly
	and just say, hey, forget about the stupid budget rules, let's
	spend the tax for the purpose for which it was collected, deal
	with the maintenance backlog in our harbors, and more
	efficiently move freight.
	There is a regulatory pendulum. It can swing way over here
	and way over there. The sweet spot is in the middle. And it is
	always difficult to get there. I believe there are unnecessary
	delays and impediments due sometimes to bureaucracy and to, you
	know, misguided regulations. I have been having an ongoing
	dispute with FEMA and National Marine Fisheries up in my
	region. So I can understand that, and I welcome an honest
	discussion of that.
	But I also caution that you don't swing to the other
	extreme, which is, you know, we are just going to facilitate
	projects, whether or not they are well thought-out, whether or
	not they have community support, and whether or not they might
	have unintended consequences. Look at 50 years ago, the central
	and southern Florida project, which was authorized in 1948,
	which diked Lake Okeechobee, Kissimmee River. Part of the
	Everglades was drained. It is widely recognized by the
	residents, the communities, and everyone around there, as a
	disaster. And now Congress, 50 years later, passed a plan that
	cost $10 billion to reverse some of that.
	So, if we approach some of these major projects in a more
	balanced way, I think we will be better off and not have to try
	and reverse their impacts later.
	We have had significant testimony before this committee,
	including a former colleague who was head of the Corps of
	Engineers for a brief period of time until he came here before
	this committee, presented the Bush budget for Corps of
	Engineers, and I said, ``Is that budget adequate to deal with
	these backlogs and all these other problems we have,'' and he
	said no. The next week he resigned to spend more time with his
	family.
	So, you know, we need to encourage honesty. And the honest
	thing is the most major impediment is lack of funding, plain
	and simple. And then we can deal with any regulatory burdens
	that crop up in the interim. I mean, in surface, you can't say
	that the 150,000 bridges out there, 99 percent of which are not
	going to require any major environmental analysis, that need to
	be repaired or replaced, are not getting done because of
	environmental, you know, restrictions. They are not getting
	done because the Government isn't investing the money in the
	National Highway System. It is the same with our ports and
	harbors, which is under the jurisdiction of this subcommittee.
	So, I welcome the witnesses here today. I want to hear and
	hope to hear about that kind of balance and the need to better
	invest. Thank you, Mr. Chairman.
	Mr. Graves of Louisiana. Thank you. With that, I would like
	to turn to our first witness.
	We have Mr. Jerry Ellig, who is the senior research fellow
	at the Mercatus Center at George Mason University. Mr. Ellig,
	you are recognized for 5 minutes.
	OK, this--is the timer working? OK.

	TESTIMONY OF JERRY ELLIG, PH.D., SENIOR RESEARCH FELLOW,
	MERCATUS CENTER AT GEORGE MASON UNIVERSITY; GARY MCCARTHY,
	MAYOR, SCHENECTADY, NEW YORK, ON BEHALF OF THE U.S. CONFERENCE
	OF MAYORS; JOHN LINC STINE, COMMISSIONER, MINNESOTA POLLUTION
	CONTROL AGENCY, ON BEHALF OF THE ENVIRONMENTAL COUNCIL OF THE
	STATES; MIKE INAMINE, EXECUTIVE DIRECTOR, SUTTER BUTTE FLOOD
	CONTROL AGENCY; JONATHAN KERNION, PRESIDENT, CYCLE CONSTRUCTION
	COMPANY LLC, ON BEHALF OF THE ASSOCIATED GENERAL CONTRACTORS OF
	AMERICA; KATHY L. PAPE, SENIOR VICE PRESIDENT REGULATORY POLICY
	AND BUSINESS DEVELOPMENT, AMERICAN WATER, ON BEHALF OF THE
	BIPARTISAN POLICY CENTER, EXECUTIVE COUNCIL ON INFRASTRUCTURE;
	AND KEVIN DEGOOD, DIRECTOR OF INFRASTRUCTURE POLICY, CENTER FOR
	AMERICAN PROGRESS

	Mr. Ellig. Thank you, Mr. Chairman. I guess I should say to
	multiple chairs and multiple ranking members, thank you for the
	opportunity to testify today. My name is Jerry Ellig. I am an
	economist and a senior research fellow at the Mercatus Center
	at George Mason University. And I come to approach today's
	topics a little bit differently, because I was asked to talk a
	little bit about some general problems and tendencies in the
	U.S. Federal regulatory process that may be the source of some
	of the frustrations that some of the members of the committee
	and the subcommittee just mentioned in some of the opening
	statements.
	I come to this as a generalist. Most of my research in the
	past 15 years has focused on the Federal regulatory process and
	performance management of Federal agencies. So I don't come to
	this as an expert on the particular programs this committee has
	jurisdiction over. But, nevertheless, I was asked to talk about
	some general regulatory issues.
	There is a tendency in our Federal regulatory process for
	folks to focus on intentions, rather than outcomes; intentions,
	rather than results. And there are at least three kinds of
	symptoms of this that I can mention.
	One is a tendency of regulatory decisionmakers to focus on
	activities and outputs, rather than results. So we have, for
	example, a lot of folks in Federal agencies who honestly
	believe that their job and their success should be measured by
	production of regulations, or perhaps by enforcement activity,
	rather than how many problems did they solve, what did they
	actually accomplish.
	A colleague of mine at the Mercatus Center interviewed a
	number of economists in Federal regulatory agencies a number of
	years ago, and one of them described the way his agency worked
	as, ``Success is putting out 10 regulations a year, and bigger
	regulations are bigger successes.'' You notice there is nothing
	in there about actually achieving results, because we are
	focused on measuring activities and outputs, rather than
	focused on measuring what have you actually accomplished with
	the regulation.
	And the solution really has to start with Congress
	articulating what outcomes it wants to achieve when it
	authorizes regulatory legislation, and then following up to
	ensure that retrospective assessment is done to find out
	whether the regulation achieved the intended purpose. And, if
	so, at what cost.
	Another related problem is there are often serious
	deficiencies in the analysis that Federal agencies are supposed
	to do. They are supposed to inform regulatory decisions. Now, a
	lot of water projects and other types of projects go through
	some type of benefit-cost analysis. And you might say, well,
	gee, what is sauce for the goose ought to be sauce for the
	gander. Folks who want to constrain what can be done in those
	projects through regulation should also be going through the
	same kind of analysis. And executive branch agencies are
	required to do this by Executive orders, but we often find that
	there are serious deficiencies and omissions in the analysis. I
	have seen that in my research. A lot of other folks who
	actually research the quality of agency analysis, regulatory
	agency analysis, find the same thing.
	The final problem we often have is something I call ready-
	fire-aim regulation. Now, this occurs when regulatory agencies
	essentially decide what they want to do, and only then conduct
	the research that is supposed to inform their decisions. And
	the process of doing the research becomes the process of
	creating a litigation support document to support decisions
	that have already been made for other reasons.
	One of my colleagues, who actually spent 27 years as an
	economist in the Federal Government, told me about an adventure
	he had where he was working on a regulation. The agency had
	already decided to issue it. He was still working on the
	analysis that was supposed to determine whether it was worth
	doing, and he was told on a Friday afternoon, ``If you can't
	find more benefits over the weekend, don't bother coming back
	to work on Monday.''
	Folks, that is not the way that regulatory agencies should
	be approaching regulation. And again, this does not always
	happen. There are good, committed people at regulatory agencies
	who do a good job figuring out what they are supposed to do
	before they make decisions. But there is also plenty of
	research that demonstrates that there are often some pretty
	significant deficiencies in either the quality of agencies'
	underlying analysis, or maybe they do good analysis but they
	don't necessarily pay attention to it.
	So, all three of these kinds of problems occur when we
	focus on good intentions, rather than focusing on outcomes. And
	if we want to fix the problem, we need to flip that around so
	that we are focused on regulatory outcomes first, and the
	evidence of what is happening, whether it is being done, and
	what agencies are actually trying to accomplish.
	Mr. Graves of Louisiana. Thank you.
	Our next witness is the Honorable Gary McCarthy, mayor of
	Schenectady, New York.
	Mayor McCarthy, you are recognized for 5 minutes.
	Mr. McCarthy. Chairman Shuster, Chairman Graves, Mrs.
	Napolitano, members of the committee, thank you for the
	opportunity to be here this morning.
	Since 2011, Schenectady has borrowed, collectively, just
	under $53 million to be spent on upgrading pipes, replacing
	equipment, and rehabilitating our wastewater treatment plant.
	In 2017 the city is embarking on an SSO [sanitary sewer
	overflow] mitigation project, including a $24 million project
	to eliminate a sanitary sewer overflow, and $6 million to
	improve our system's overall resiliency.
	Schenectady does not contest the importance of
	environmental protections and efforts, and has significantly
	invested in these projects. But we are being forced to expend
	even more funds, while we are still attempting to recover from
	the great recession and decades of population decline in an old
	industrial city. Our strong local economic recovery has been
	placed in a precarious situation by this significant burden.
	In addition to the tax burden, the consent order the
	Schenectady operates under requires a 4-to-1 exchange for new
	connections. I want to emphasize that, that Schenectady is not
	allowed to do a new hookup unless I remove four other hookups
	or entry points within the system. This critically limits our
	economic development projects, and is totally counterproductive
	to what we have been trying to accomplish in our community.
	While we face the burden of traditional infrastructure, we
	are only scratching the surface on what is possible through
	Smart City technology. Our partnerships with our business
	community have allowed us to install at this point roughly 200
	smart lights, which will reduce our cost and improve the
	delivery of several key city services. This emerging technology
	allows us to use this platform for real change. Data will be
	collected and disseminated to users, allowing much more
	educated and appropriate decisions to be made.
	Additional devices, such as analytic cameras, temperature
	and motion sensors, traffic monitoring devices, and the
	potential for interconnected health care and other life safety
	devices deployed on a network of over 5,000 city streetlights
	provides an opportunity to evaluate numerous core challenges in
	an urban environment.
	This 21st-century infrastructure cannot be ignored while we
	bear the burden of investment in the more traditional
	infrastructure. To do so would be to put the city and the
	Nation's long-term--is a peril, as we have missed this critical
	opportunity for economic growth and improve educational
	opportunities and long-term efficiencies within our
	communities.
	What I would ask today is that we need increasing
	partnership. We look to continue the SRF program, as well as
	CDBG, and looking to provide grants in the WIFIA funding in
	protecting municipal bonds.
	And other ways that you can help would include passing the
	Integrated Planning and Affordability legislation, commonly
	referred to as H.R. 465. I want to thank Mr. Gibbs for
	listening to the mayors' concerns regarding unfunded mandates
	and affordability in his introduction of H.R. 465. This bill
	would allow local governments to work with the EPA to develop
	plans where we can comprehensively deal with the biggest
	environmental and public health needs first, and do it in a way
	that is more affordable to our citizens.
	I have a letter that is signed by members of--representing
	the U.S. Conference of Mayors, asking for cosponsors in the
	passage of H.R. 465, and that has been attached to my testimony
	submitted to you.
	By reauthorizing and fully funding the brownfields law, you
	will be encouraging the recycling and reusing of properties and
	upgrading of existing infrastructure. In addition, many
	communities redevelop brownfields to create more green
	infrastructure, which helps with stormwater controls.
	And I have already mentioned how Schenectady is utilizing
	new technology for our above-ground systems. However, there can
	also be improvements that can be made below ground. All
	utilities can improve service through the incorporation of
	modern technologies specifically designed to increase
	efficiencies and reduce cost. Congress and the administration
	should be supporting the renewable public water and sewer
	infrastructure in America through new technology.
	There is much Congress and the Federal Government can do to
	work in partnership with our Nation's cities to upgrade our
	infrastructure and invest in our future. And we need to end the
	siloed approach of handling issues, and think holistically on
	how to deal with our infrastructure, environmental, economic
	development concerns, as we work together.
	Again, I thank the committee for the opportunity to be here
	today, and look forward to your questions.
	Mr. Graves of Louisiana. Thank you, Mr. Mayor. And to
	introduce our next witness, I am going to recognize Mr. Nolan.
	Mr. Nolan. Thank you, Chairman Graves and Ranking Member
	Napolitano, and members of the committee. As a member of the
	full committee, I am grateful for your allowing me to sit in on
	today's important hearing.
	And by way of introduction, let me say, you know, one thing
	we all agree on is that our Nation's outdated and obsolete
	wastewater treatment and drinking water systems are desperately
	in need of repair. And in many cases, crumbling before our eyes
	and degrading our waters and the health of our people.
	With that in mind, it is my honor to introduce my good
	friend, Minnesota's good friend, our commissioner of the
	Minnesota Pollution Control Agency, John Linc Stine, who is
	here on behalf of the Environmental Council of the States.
	John has spent over 30 years as a powerful and tireless and
	gifted advocate in the fight to protect our precious air and
	water and land from pollution and degradation. We are all very
	proud of his great leadership, and I am very proud to have the
	opportunity to introduce him to the committee here today.
	John, welcome.
	And thank you to the committee for allowing me to make this
	introduction.
	Mr. Graves of Louisiana. Thank you, Mr. Nolan.
	Mr. Stine, you are recognized for 5 minutes.
	Mr. Stine. Thank you, Congressman Nolan. Thank you, Mr.
	Chair, for this opportunity, and Ranking Member Napolitano. I
	am John Linc Stine, I am commissioner of the Minnesota
	Pollution Control Agency, as Mr. Nolan said, and I represent
	also, as the president of the Environmental Council of the
	States, or ECOS, a nonpartisan national organization of my
	colleagues who lead State and territorial environmental
	protection agencies across America.
	And, Chairman Graves, as you know, the Mississippi River
	begins in the State of Minnesota at Lake Itasca, and ends in
	your State. And I take it as my duty to deliver the cleanest
	water possible that Minnesota can send your way.
	States hear every day from our citizens about the value of
	clean water, adequate flood control, and prevention of
	pollution. Infrastructure underpins every one of those issues,
	and we know that a society cannot thrive without clean water.
	Industry and jobs depend on a reliable water supply and the
	capacity to process wastewater.
	Clean water is vital to manufacturing, recreation, and
	other industries that are central to our economy. The community
	of Worthington in southwestern Minnesota is making needed
	improvements to their wastewater treatment plant to accommodate
	a meat-packing operation that needs to expand. Nearby, Morris,
	another community, needs to make improvements to their drinking
	water system to provide water for their ethanol plant.
	ECOS aims to strengthen the partnership between the States
	and the Federal Government to implement our Nation's
	environmental laws and policies while focusing on results.
	Water infrastructure is one of the focus areas of our ECOS
	document, ``Priority Issues in a Time of Political
	Transition,'' which we produced to address the new
	administration's priorities. Our members identified 20 priority
	projects for wastewater and water supply, by State, that are
	ready to go in 2017. That list amounts to $18.2 billion in
	need.
	Our country prospered and thrived, thanks to the
	investments that were made in water infrastructure 75 to 100
	years ago. Some of the most significant of those have occurred
	since the passage of the Clean Water and Safe Drinking Water
	Acts. Federal, State, and local partnerships helped make those
	investments successful, and we need to continue to make
	investments that are critical to the upkeep of those initial
	investments. Federal funding, using portions of the EPA's State
	and Tribal Assistance Grants, which make up the Clean Water and
	Drinking Water State Revolving Loan Funds, are critical to
	those investments.
	The revolving nature of those loan programs and States'
	efforts to maximize the Federal capitalization grants ensure a
	continuing return on investment. The successful history of
	national water and wastewater programs, however, is
	overshadowed by the enormous and extensive need. Estimates
	range from $384 billion through 2030 for our drinking water
	infrastructure, and $271 billion through 2022 for wastewater
	infrastructure needs.
	Our distressed urban areas, small communities, and rural
	communities are particularly pressed to make the needed water
	infrastructure investments. Many of these communities find it
	difficult to keep up with the numerous increasingly complex
	Federal requirements due to a small tax base, lack of adequate
	financing options, management skills, trained personnel, and
	systems to manage environmental requirements.
	ECOS continues to raise the importance of efficient,
	affordable, and timely financial award to these distressed
	communities. For example, the community of Gilbert in
	Congressman Nolan's district is a mining town that is facing an
	$8.6 million project to replace a old wastewater treatment
	plant to reduce overflows of raw sewage. They have a declining
	population and high unemployment. They simply cannot afford a
	project of that size without assistance.
	Reliable infrastructure is critical to the protection of
	public health and community well-being because lack of clean
	water is a serious health threat. In the southern Minnesota
	community of St. Peter they had high nitrate levels in their
	groundwater because shallow groundwater is the only available
	water source in that part of our State. And in order to protect
	their community, they needed to make the investments to treat
	for nitrates. They did it to protect their children's health,
	and the health of their elderly.
	Minnesota has invested in programs to monitor and regulate
	corrosion and aging water systems, and we need to continue to
	do that at the State level.
	As science has increased the awareness of public health
	risks, and the environmental regulatory system has grown more
	complex, there are disagreements over the cost and levels of
	protection that continue to make national headlines. But we
	must remember our foremost obligation: to protect the
	environment and public health through investments in our
	country's infrastructure. Thank you very much.
	Mr. Graves of Louisiana. Thank you, Mr. Stine.
	Our next witness is Mr. Mike Inamine, who is executive
	director of the Sutter Butte Flood Control Agency.
	Mr. Inamine, you are recognized for 5 minutes.
	Mr. Inamine. Good morning, Chairman Graves, Ranking Member
	Napolitano, and members of the committee. My name is Mike
	Inamine, and I am executive director of the Sutter Butte Flood
	Control Agency. Thank you for the opportunity to address the
	committee on this most important timely issue.
	Before beginning my testimony, I would be remiss if I did
	not acknowledge Congressmen LaMalfa and Garamendi who are not
	here right now. These are two members of the committee who have
	been true partners on these local efforts from the start. But
	for their efforts, I would be telling a very different story
	today.
	Sutter Butte Flood Control Agency, or SBFCA, as it is
	known, was formed in 2007 to consolidate the efforts of several
	agencies and communities with flood management responsibilities
	and implementing locally led flood protection projects. SBFCA
	is a joint powers authority composed of the cities of Biggs,
	Gridley, Live Oak, Yuba City, the counties of Sutter and Butte,
	Levee Districts 1 and 9. SBFCA leads the planning and
	implementation of flood control projects in this historic
	agricultural basin.
	The Sutter-Butte Basin covers 300 square miles along the
	west bank of the Feather River, immediately downstream of Lake
	Oroville. The basin is home to 95,000 residents and encompasses
	$7 billion of damageable assets. The region has sustained
	numerous floods, including the 1955 levee failure on the
	Feather River, which resulted in the deaths of at least 38
	people.
	The goals of the agency are to achieve 200-year level of
	flood protection for urban communities in the north, and 100-
	year protection or equivalent in the south, in the rural areas.
	Under State law, urban or urbanizing areas cannot be developed
	without achieving a 200-year level of protection--that is twice
	the FEMA level of protection--thus eliminating opportunities
	for risky residential development. SBFCA is nearing completion
	of the $300 million Feather River west levee project that
	provides a 200-year level of protection for the northern basin.
	The United States Army Corps of Engineers has traditionally
	been the most important builder of flood projects, as well as
	the most powerful regulator of these same projects. I would
	like to briefly comment on the local relationship of the Corps
	of Engineers under these two important processes.
	Basically, there are two ways for a local agency to get a
	Federal project levee fixed in California: partner with the
	Corps of Engineers under the Civil Works Program and wait a
	couple of decades or more; the second path is for a local
	agency to pass a local assessment, often very difficult, then
	cost-share with the State of California and be consistent with
	the strategic Central Valley Flood Protection Plan, then seek
	permission from the Federal Government to fix their levee under
	an article of law called section 408.
	This latter process is also quite slow, taking 3 to 4 years
	for large flood projects. This year, SBFCA will complete the
	Feather River west levee project, which improves about 30 miles
	of Federal project levee, without changing the design or
	purpose of the project, and without spending a dime of Federal
	money. Yet this permission process took 19 months, and is
	considered light speed, a world's record.
	The Corps has recently improved the civil works planning
	process. SBFCA was pleased to be one of four pilot projects
	selected from throughout the country to test the 3x3x3 planning
	process. To the Corps' great credit, the Sutter Basin study was
	a great success, and met all objectives. The Corps delivered.
	However, authorization is only part of the story. The
	appropriations process takes more Acts of Congress and takes
	several years, never mind construction. In the case of the
	Feather River west levee project, we have already constructed
	80 percent of the Federal project with our own money, yet we
	are struggling to get the Federal Government to finish the job.
	Thus, the successes of the planning study, State/local
	innovative financing, and local initiative may be squandered on
	this traditional appropriations process.
	There are a number of things the Corps can do to improve
	risk reduction, whether performed by local, State, Federal, or
	even private entities.
	Prioritize work by risk reduction, not who builds the
	project. Incorporate the successful 3x3x3 process into the 408
	permission. We are heartened and grateful that Civil Works
	Director James Dalton has already initiated changes, and we
	hope to see these expanded and codified. This is a big deal for
	local agencies.
	Do not intermingle 408 permission processes with separate
	civil works processes. Otherwise, delays are inevitable.
	Allow local, State, and even private entities to construct
	civil works projects. WRRDA 2014 [Water Resources Reform and
	Development Act of 2014] includes a provision to advance this
	concept. However, this pilot has not happened to date.
	And finally, proactively consult with the Advisory Council
	on Historic Preservation on issues concerning Native American
	cultural resources.
	This statement would be incomplete without noting the
	importance of the single most important flood control feature
	on the Feather River, Oroville Dam. Feather River is the
	discharge channel of Oroville's spillway. Dams and levees are a
	system, and as the ongoing crisis at Oroville Dam evolves, it
	is easy to forget that the primary failure mode that will
	result in loss of life and property is not necessarily dam
	spillway failure, but rather, levee failure. Oroville Dam has
	appropriately captured all of our attention at the moment, but
	we cannot neglect the vulnerability of our levees in the system
	that includes the Oroville Dam.
	Thank you for holding this hearing and your continued
	attention to these important issues. Our lives and livelihoods
	depend on it.
	Mr. Graves of Louisiana. Thank you very much.
	Next witness is Mr. Jonathan Kernion--thank you very much
	for being here--president of Cycle Construction Company.
	Mr. Kernion. Thank you. Chairman Graves, Ranking Member
	Napolitano, Chairman Shuster, and other members of the
	committee, thank you for inviting me to speak before you today.
	I am Jonathan Kernion, president of Cycle Construction
	Company, based in Kenner, Louisiana. Our company is a family-
	operated general construction firm founded in the late 1990s.
	We focus on heavy civil construction, marine construction,
	coastal restoration, environmental infrastructure, underground
	utilities, roads, bridges, demolition, waste management, and
	emergency response. I testify before you as a member of and
	representing the Associated General Contractors of America.
	I want to add something in this--what I am talking, and I
	am going to plagiarize something I heard from one of our levee
	district heads in--down in South Lafourche. He has been waiting
	now to build the levee for 5 years to get a wetlands permit so
	he could build the levee to save, literally, hundreds of
	thousands of lives, money, property, everything else. And he
	still hasn't got a wetlands permit.
	And he made a very, very unique reference to that, and he
	said that in 1941 Japan bombed Pearl Harbor. We were not a
	superpower at the time, but at the time we didn't have much,
	you know, as far as power. And what he said was, in the 4 years
	after that, we built close to 80,000 aircraft, 1,200 large
	combat ships, recruited and trained well over 7 million combat-
	ready troops, and we became a superpower of the world. But
	today, in 2017, he can't get a Federal wetland permit in 5
	years to build a levee to save lives, which pretty much sums up
	the story and tells it.
	I will go on from there. In order to build a 21st-century
	infrastructure, we need to be able to build it some time this
	century. Sadly, that is easier said than done. There are many
	kinks in the chain that can delay construction for years. In my
	testimony, I try to highlight some opportunities to more
	efficiently deliver water infrastructure projects during the
	preconstruction and actual construction phases.
	Before construction begins, there are many--too many--
	Federal agency cooks in the environmental review and permitting
	kitchen. They follow laws and regulatory processes that came
	about independently, laid on top of one another with little or
	no regard for how they fit in the overall process. And even
	when you get to the top of the environmental review ladder, a
	backyard lawsuit can shoot you down to the beginning of the
	game.
	As such, projects can be delayed years and even decades,
	waiting for environmental reviews and permits to be completed.
	In my home State of Louisiana, we don't have years to protect
	and restore our environmental sensitive coastline. A football
	field worth of coastline erosion is caused, on average, every
	hour. It is alarmingly ironic that the lengthy environmental
	permitting and review processes that are intended to protect
	our coastline could, at least in part, lead to its further
	destruction.
	AGC looks forward to working with this committee to better
	integrate the Federal environmental review and permitting
	process, building upon the reforms of NEPA and the past
	transportation reauthorization bills, and curving frivolous
	environmental lawsuits.
	During construction, contractors face two primary problems:
	certain and reliable project funding streams, and Federal
	agency indecision. We do not build our homes from the ground up
	over a course of 30 years. However, we too often build our
	Nation's water infrastructure that way.
	While we can point to Federal agencies as a cause for many
	problems, the buck starts and stops with Congress, literally.
	Until Congress allows water infrastructure projects to be
	funded outside the whims of the annual appropriation process,
	where funding comes in uncertain dips and drabs, we will
	continue to face unnecessary construction delays.
	One of the greatest challenges contractors face on the
	Federal water infrastructure job site is obtaining decisions
	from Federal agencies. Former President Theodore Roosevelt is
	credited in saying, ``In any moment of decision, the best thing
	you can do is the right thing, the next best thing is the wrong
	thing, and the worst thing you can do is nothing.''
	As with any construction project, unforeseen issues may and
	will emerge. The problem comes with getting the Federal agency
	to make a decision to act or not. Decisions may have to move up
	the chain of command. If the right person or persons are not
	available, the decision sits on their desks. AGC hopes to work
	with the committee to reduce the links in the chain of the
	command necessary to shorten and obtain timely decisions during
	construction.
	Thank you again for inviting AGC to testify before the
	committee today. I look forward to answering any questions you
	may have.
	Mr. Graves of Louisiana. Thank you, Mr. Kernion.
	Our next witness is Ms. Kathy Pape, senior vice president
	of regulatory policy and business development at American
	Water.
	Ms. Pape, you are recognized for 5 minutes.
	Ms. Pape. Thank you, Chairman Graves, Ranking Member
	Napolitano, Chairman Shuster, and members of the committee. My
	name is Kathy Pape. I am senior vice president of regulatory
	policy and business development at American Water, which is the
	largest investor-owned water and wastewater service provider in
	the United States. We provide water and wastewater service to
	about 15 million people in 47 States, and that includes 12
	military bases, as well.
	I appear before you today on behalf of the Bipartisan
	Policy Center's Executive Council on Infrastructure. That
	group's goal is to focus on how private investors can help to
	fund public projects. We have three recommendations for you
	today. But before I get into those three recommendations, I
	would like to give you a real-life example of a private company
	helping a public project about 110 miles north of here in
	Fairview Township, Pennsylvania, in late 2015.
	Fairview Township decided to sell its wastewater system to
	Pennsylvania American Water. As a result, that township was
	able to pay off all of its sewer debt, was able to reduce
	property taxes by 50 percent, and it was able to refund a
	$10,000 per-customer hookup fee that the township charged. Just
	one example of many that I could give.
	We have three recommendations today, and the first one
	involves where investment goes. And our belief is--and
	recommendation is--that investment should go towards
	sustainable and compliant water and wastewater systems. That
	means spend Federal money wisely. The way the system is set up
	now, most Federal dollars will go toward the most noncompliant
	systems. There is points given for noncompliance. Our belief is
	that putting money toward a poorly run system is like a shot of
	Botox. It is short term, it won't erase years of abuse, and you
	will need it again and again and again.
	Dollars should go towards those systems that are capital-
	efficient and that are also cost-transparent. And by that I
	mean systems that charge true cost of service. Many times true
	cost of service is not charged either because there has been an
	influx of Government money, or because Government leaders don't
	believe that charging true cost of service will help them
	politically. But a system is not sustainable if true cost of
	service is not charged.
	Our second recommendation goes towards options and
	alternatives. As somebody said this morning, the Federal
	Government can't fully fund $1 trillion. But there are many,
	many private investors who are willing to help do that. We have
	56,000 community water systems, 19,000 wastewater pipe systems,
	14,000 wastewater treatment systems, many of which were funded
	in the 1970s by Government grants, and those Government grants
	aren't around any more.
	So we have our economic vitality being challenged, as well
	as the health of our children and grandchildren. We need to
	look for new ways and break down regulatory burdens. More
	alternatives, more options.
	And finally, the third recommendation is relatively simple,
	and that goes to the Clean Water State Revolving Fund. Private
	companies are not eligible for funding under the clean water or
	the wastewater part. We can access Drinking Water State
	Revolving Funds, so we would ask that that is one of the ways
	to help private companies help the Government to fund the
	infrastructure that is needed.
	In summary, our recommendations are three: invest wisely,
	put dollars toward those systems that are most compliant, that
	are sustainable, and have a track record of doing what should
	be done; second, that is break down those regulatory barriers
	and offer more options--many of those barriers have been
	mentioned this morning; and finally, provide access to the
	Clean Water State Revolving Fund.
	Mr. Graves of Louisiana. Thank you, Ms. Pape. I appreciate
	your testimony.
	And our last witness is Mr. Kevin DeGood, who is director
	of infrastructure policy at the Center for American Progress.
	Mr. DeGood, you are recognized for 5 minutes.
	Mr. DeGood. Thank you, Chairman Graves and Ranking Member
	Napolitano, and members of the committee, for inviting me to
	testify. It is an honor and a privilege to contribute to this
	committee's work.
	Water is an essential element of our daily lives and vital
	to our economy. The start of the 115th Congress presents
	Members with the opportunity to review the investments and
	policies needed to move the country forward in the coming
	years.
	And while the elections on November 8th produced a change
	in leadership in Washington, one thing remains clear: no one
	walked into a voting booth demanding dirtier water, lower
	wages, and higher profits for Wall Street. And yet, weakening
	the Clean Water Act, eliminating Davis-Bacon prevailing wage
	standards, and pushing high-cost equity capital through public-
	private partnerships will do all of those things.
	Rather than rolling back the environmental progress of
	recent decades, this Congress has a clear mandate to build a
	stronger, cleaner future for our communities by providing
	direct funding to improve water quality and reliability, flood
	control, and navigation in a sustainable way.
	State and local governments, as well as drinking and
	wastewater authorities face enormous infrastructure challenges.
	Many legacy facilities have come to the end of their useful
	life, requiring major rehabilitation or outright replacement.
	At the same time, population growth, source water pollution,
	and increasingly extreme weather patterns brought about by
	climate change have added to the complexity and cost of
	providing safe and reliable water and protecting against the
	ravages of flooding, drought, and sea-level rise.
	The EPA estimates that the Nation will need approximately
	$655 billion to maintain current health and environmental
	standards. The recent winter storms that have lashed northern
	California offer a powerful lesson in how rapid swings from
	intense drought to intense precipitation can overwhelm critical
	facilities that were designed using more stable climactic
	assumptions.
	More than 180,000 residents in the Oroville region had to
	be evacuated on short notice due to spillway failures. This
	episode highlights the fragility of older facilities, and the
	essential role that water infrastructure plays in supporting
	public health, safety, and economic productivity.
	California is not alone in facing water infrastructure
	challenges from climate change. For example, south Florida must
	modernize a host of facilities to deal with rising seas. For
	these communities, adapting to climate change is an issue of
	basic economic viability. Based on detailed technical work from
	Swiss Re, a company in the reinsurance industry, the Miami-Dade
	sea level rise task force determined that major improvements
	would be needed to ``avoid or postpone wholesale abandonment
	due to noninsurability or the high cost of premiums.''
	The stress that climate change places on the built
	environment will only grow over time. We have a choice: invest
	and adapt, or pay an even higher price down the road.
	In the Cleveland area, the Northeast Ohio Regional Sewer
	District faces significant challenges meeting Clean Water Act
	standards. Like many older communities, Cleveland has a
	combined sewer system that, during heavy rains, often
	discharges untreated wastewater into the Cuyahoga River and
	Lake Erie. On average, the district discharges more than 4
	billion gallons of untreated sewage each year. In 2011, the
	district entered into a consent degree with the Environmental
	Protection Agency to make numerous upgrades to their system,
	including a combination of gray and green infrastructure.
	These public agencies responsible for managing the water
	infrastructure highlighted by these examples share one key
	characteristic. They don't need another credit card from
	Washington or to saddle taxpayers with expensive private equity
	through public-private partnerships. What these jurisdictions
	need is a strong Federal partner ready to provide direct
	funding.
	Proponents of public-private partnerships often state that
	there are billions of dollars of capital waiting on the
	sidelines. Implicit in this statement is that water agencies
	and other project sponsors face a lack of liquidity. This is
	simply not the case. Demand for public debt in the U.S. is
	robust. Moreover, the favorable tax treatment afforded to
	municipal bond investors means the public sector is able to
	secure municipal financing that is often three to five times
	cheaper than equity capital.
	Today the public sector has access to municipal financing,
	as well as Federal credit facilities like WIFIA and federally
	supported State revolving funds at historically low rates.
	Simply stated, for many cities and water utilities, access to
	affordable credit is not the binding constraint. Instead, there
	is a shortage--the shortage of local revenues to support new
	project debts.
	Many communities do not take full advantage of their
	capacity to generate additional revenue through taxes and user
	fees. However, even when they do, there are real limits on the
	total additional revenue they can reasonably generate, which
	often falls short of overall needs.
	Increased Federal funding is needed to grow our economy,
	ensure timely compliance with water quality mandates, as well
	as to deal with changes presented by climate change. These
	resources should be used to leverage additional State and local
	dollars where possible, and to target those communities facing
	the greatest need.
	Additionally, Federal funds should focus on those
	categories of projects that, all too often, take a back seat to
	traditional gray infrastructure, including efficiency upgrades,
	watershed restoration, and nonpoint source pollution
	mitigation.
	Thank you again for the opportunity to address this
	committee.
	Mr. Graves of Louisiana. Thank you, Mr. DeGood. I
	appreciate your testimony. We are going to go ahead and roll
	into questions, and I am going to recognize myself for 5
	minutes.
	Mr. Ellig, when I was reading your testimony last night I
	was really impressed with the thought process, and that you
	talked about appropriate metrics on regulations in ensuring
	that regulations are truly focused upon outcomes that are in
	the best interest of the American public.
	Just a few months ago, or a few weeks ago, we had
	bipartisan legislation that was included into the Regulatory
	Accountability Act, a bill that we had introduced last year
	called PROVE IT [Providing Retrospective Observations
	Validating Economics and Increasing Transparency]. And what
	that does is it requires that Federal agencies come back 5
	years after a regulation has been finalized to collect actual
	compliance information from stakeholders. Not predicting, but
	actually collecting real information, doing a look back,
	determining the impact of--the true impact of those
	regulations, and we were shocked to find that there was little
	in--required of agencies to actually go back and true-up their
	cost estimates on--in terms of the cost of compliance with
	regulations.
	Do you have specific examples of where you have seen
	regulations, or the regulatory process, improperly applied that
	you could say?
	Mr. Ellig. Well, I think some of the types of problems like
	that that I have seen, and that my colleagues at the Mercatus
	Center have seen in their research, involve barriers that maybe
	prevent better or more intensive use of some of the existing
	infrastructure.
	For example, several of my colleagues have looked into the
	issue of supersonic flight and found that one of the biggest
	barriers to supersonic flight in the United States is it is
	banned in the Continental United States. And this was because
	of a legitimate concern about noise, about sonic booms. But
	with advances in materials, advances in engineering, it may
	very well be possible to design airplanes--probably not as big
	as the Concorde--but design airplanes that can actually travel
	supersonic speeds while meeting a reasonable noise standard
	that protects the public. And that is the difference between
	focusing on outcomes versus just focusing on intentions.
	If we really want a regulation that focuses on outcomes,
	then have a noise standard that supersonic air transport needs
	to meet. Don't ban it, entirely. But those are the kind of
	barriers to innovation that we get when we just, you know,
	focus more on the process----
	Mr. Graves of Louisiana. Sure.
	Mr. Ellig [continuing]. Rather than getting results.
	Mr. Graves of Louisiana. Yes, thank you. And I think--I
	would love for you to give a clinic to Federal regulatory
	agencies to focus on outcomes and true interest to the American
	public.
	Mr. Inamine, I want to ask two questions. Number one, you
	talked about the 408 process. And certainly that has been
	something that I think Ranking Member Napolitano and I have
	both heard a lot of concerns about, just predictability and
	timeframes associated with that review process. While certainly
	it is important to ensure that we understand the impact of any
	project to Federal infrastructure, Federal water resource
	infrastructure, can you talk about the timeline of--and I know
	you mentioned 19 months, lightning speed, but the timeline of
	that decision, and what would have happened if it was approved
	faster?
	Mr. Inamine. So for that specific incident--I say 19
	months. It actually took much longer. And I want to point out--
	this is not a hit piece on the Corps of Engineers. They are a
	really competent, well-meaning, smart people, people that are
	working on this 408 process. I think they are bound up in a
	very stovepiped organization, and it makes it very difficult to
	perform, because the outcome of this, as noted by a previous
	speaker, is public safety. It is very important. Most people
	are generally pointed in that direction.
	Now, with regard to 19 months, what had to happen was the
	Corps of Engineers, in order to set that world's record of a
	very fast 408 process, they had to split the project up into
	two pieces. We had a levee at the time, just prior to
	construction, that was suffering some internal erosion. We just
	found evidence of that just a year prior. It is the site of the
	historic 1955--very dangerous site. It was recognized as the
	highest priority, highest risk levee on that system.
	And so, staff--to their credit, Corps staff, to their
	credit--split the project into two pieces. But under the normal
	process----
	Mr. Graves of Louisiana. I have got 25 seconds left.
	Mr. Inamine [continuing]. We might still be waiting for
	that project to resolve.
	Mr. Graves of Louisiana. Last, very quickly, you are a non-
	Federal sponsor with a project with the Corps of Engineers. Can
	you just tell me the percentage of cost that you, implementing
	the project on your own, as opposed to doing it with the
	Federal Government--you compare those two?
	Mr. Inamine. So we have--so we prepared--so we were
	completing a locally--State of California and locally funded
	project. It encompasses the vast majority of the parallel
	Federal project. And so, our costs have been roughly half of
	what the Federal cost estimate is to do it under the normal
	process.
	Mr. Graves of Louisiana. Thank you very much. I recognize
	Ranking Member Napolitano for 5 minutes.
	Mrs. Napolitano. Thank you all for your testimony today.
	And as I stated in the opening statement, my communities often
	approach me about the need for increased Federal funding. That
	is why I am conflicted by the statements of President Trump.
	One hand, he called for tripling the amount of funding the
	Clean Water and Drinking Water State Revolving Fund. We call
	that a win. On the other hand, the forthcoming infrastructure
	proposal is reportedly to focus solely on increased use of
	private financing to close our Nation's infrastructure gap. It
	won't work for many of my communities.
	Most recently we learned the President plans to cut the
	funding for EPA by close to 30 percent. It would have a
	devastating impact on the ability of my State and other State
	communities and communities to address the water quality
	challenges.
	Starting with the State revolving fund authority, Ranking
	Member DeFazio and I are planning to reintroduce legislation to
	finally reauthorize clean water SRF.
	To the panel, all of you, yes or no. Clean Water State
	Revolving Fund program is an important tool to address local
	water challenges. And would you urge this committee to
	authorize--reauthorize the program? Yes or no?
	Mr. Ellig. I would say yes and no, and use private capital
	when you can get it.
	Mr. McCarthy. I would encourage it be reauthorized. Again,
	the revolving loan fund provides that mechanism for financing
	for municipalities that sometimes just is not there, otherwise.
	Mr. Stine. On behalf of all States, we have several
	resolutions at ECOS that would say yes.
	Mrs. Napolitano. Thank you.
	Mr. Inamine. I will abstain, as the flood guy.
	[Laughter.]
	Mr. Kernion. I tend to agree with--that use a little bit of
	both----
	Mrs. Napolitano. When necessary.
	Mr. Kernion. Yes, ma'am.
	Ms. Pape. I would say yes, and certainly give access to
	private companies, as well, and marry it up with private
	funding, as well.
	Mr. DeGood. We strongly support the ranking member's
	proposal to reauthorize the SRF and to expand to $4 billion a
	year.
	Mrs. Napolitano. Thank you. Many of you directly utilize
	programs of--or funding provided through the EPA. What would be
	the impact of a 30-percent cut in these programs to the ability
	to meet your local needs?
	Mr.--let's see, Mr. Stine?
	Mr. Stine. Thank you, Mr. Chair, Mrs. Napolitano. The
	States have been working with the EPA and with OMB in the last
	3 weeks to understand the magnitude of the cuts. At this point
	we have not seen the actual programmatic budget line items that
	are proposed.
	However, a 30-percent reduction in the State and Tribal
	Assistance Grants, which include a variety of sources of
	revenue that States rely on for implementation of our basic
	water and air protection programs, as well as brownfield and
	superfund sites, would cut across approximately 15 to 25
	percent of most State programs.
	Mrs. Napolitano. Thank you. Last week, Mr. Stine, the
	Environmental Council of the States submitted a letter to Mr.
	Trump and the administration on proposed cuts, which I ask
	unanimous consent to include in the record.
	Mr. Graves of Louisiana. Without objection.

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	Mrs. Napolitano. In this letter you state the cuts to EPA
	budget ``will have profound impacts on States' ability to
	implement the core environmental programs as expected by our
	citizens,'' including clean water programs and State permitting
	programs. Can you elaborate a little more?
	Mr. Stine. Mr. Chairman, Mrs. Napolitano, yes. That is a
	statement that builds on my previous statement, which is States
	use the funds to leverage existing programs at the State level.
	For example, our clean water and drinking water revolving loan
	programs are matched in the State of Minnesota by capitalized
	bonds that the State issues to leverage the Federal dollars. So
	that would be one specific impact in my State.
	But when you look at how States fund their existing
	environmental protection programs, whether it is air, land, or
	water, all of the States utilize Federal funds across a suite
	of activities. It is too soon to say what the direct impacts
	would be, but they would be, as I stated in the letter,
	profound.
	Mrs. Napolitano. To Mayor McCarthy, while not a direct
	focus of the hearing, I too support the EPA's brownfield
	program. That is why I am concerned to read the President may
	propose to eliminate all Federal funding for brownfield. Is
	that a proposal you would support?
	Mr. McCarthy. No. I would encourage, you know, Congress
	represents the State level to look at those options, to
	remediate brownfields, to do conversions that bring them back
	as productive pieces of real estate.
	Schenectady, my testimony reflects--the testimony submitted
	reflects an old brownfield site, which was the American
	Locomotive Works in the city of Schenectady. It sat there for
	50 years. It was abandoned, underutilized, really an
	embarrassing piece of real estate. Everybody was afraid that it
	was beyond salvage.
	When we actually got in and worked through in a systematic
	process, the remediation was not that--or the problems weren't
	that bad. We were able to put there--now there is a--we just
	opened a new casino, which is a $300 million project. We have
	underway a $150 million mixed-use housing project going
	immediately adjacent to the Mohawk River.
	And so it shows that, again, working together, we are able
	to take that site that people had really ignored, and make it
	really an asset, not only for Schenectady, but the region.
	Mrs. Napolitano. Congratulations, sir. Thank you, Mr.
	Chair.
	Mr. Graves of Louisiana. Thank you. We are going to go to
	the chairman of the full committee, Mr. Shuster, for 5 minutes.
	Mr. Shuster. Thank you, Mr. Chairman.
	Ms. Pape, I appreciate your testimony. Besides upsetting
	the Botox world----
	[Laughter.]
	Mr. Shuster [continuing]. It was fantastic, fantastic
	testimony, and I think a great example, too.
	When I talked earlier about private-sector dollars, I think
	the water systems, wastewater, clean water, is--this is an
	option for us. And only 2 percent--I think was your testimony,
	you said--of water systems are operated by companies like
	yours. Do you see that growing? Do you see people coming to you
	more and more, saying we need to use the private-sector
	solution?
	Ms. Pape. Sir, we have certainly seen it more and more as
	municipal governments, especially, have dealt primarily with
	underfunded pension issues.
	Mr. Shuster. Right.
	Ms. Pape. They have looked around and just tried to decide
	what assets can we sell. Scranton, Pennsylvania, is one that we
	recently acquired at the end of 2016.
	Mr. Shuster. And you always buy them? Do you lease them,
	or----
	Ms. Pape. We always buy.
	Mr. Shuster. Always buy.
	Ms. Pape. And I would like to explain one of the reasons
	why, because it goes to the affordability question. One of the
	methods we have in Pennsylvania is that we can spread the cost,
	the expenses and the capital cost of our assets, over our large
	base of customers, which is 700,000 in Pennsylvania. So we can
	use that law when we acquire assets. We couldn't use it if we
	leased.
	Mr. Shuster. And your rates, when they go up, do you do
	that by yourself, or you have to consult with somebody to----
	Ms. Pape. The rates have to go through the Public Utility
	Commission----
	Mr. Shuster. Right.
	Ms. Pape [continuing]. Through a long 8-, 9-, 10-month
	process. Again----
	Mr. Shuster. So there is protection for the citizens if
	you--somebody saying, ``Oh, that is a private company, they are
	going to jack our rates up.'' Because one of the biggest
	challenges I face in my district, a rural district, a high
	senior population, incomes declining, and half the district
	flows into the Susquehanna, which is the Chesapeake water--and
	which causes us a lot of problems with water.
	So again--and I have many, many water systems, old systems
	that, you know, we have tried to push them this way. But it is
	a challenge to get them to consider this, because they are
	afraid they are going to give up their water, and not have any
	kind of control over it. So I appreciate what you are doing.
	And I would like to see more examples, because I have seen
	the--many examples where you are rebuilding their systems, and
	their rates have not gone through the roofs. In fact, some
	cases they stay relatively stable, so----
	Ms. Pape. We do have a customer assistance program also for
	people who cannot pay the rates.
	Mr. Shuster. Thank you.
	Mr. Ellig, have you seen any examples of good governance
	in--when it comes to these regulations, in either the U.S.
	Government or in foreign governments that you can point to to
	say this is how it should run, this is how we see it, so we can
	use it as examples to demonstrate to other agencies that there
	are cases where this can be done?
	Mr. Ellig. Yes, let me highlight one example. One of the
	things that I have spent a lot of time looking at is how well
	Federal regulatory agencies account for costs. And typically,
	what they do when they are issuing regulations, most of the
	agencies that do a good job, they are still only counting
	compliance expenditures as a measure of cost, and not looking
	at broader costs to society. And some of those costs have been
	mentioned here. In general, agencies are not good at taking
	account of the costs that arise when regulations make people
	wait for stuff.
	Now I am going to give you the good example. The good
	example is, the U.S. Department of Transportation is actually
	better at this than most, maybe because it is transportation,
	and they realize that waiting time and transit time are
	important. And so, I will single out USDOT as being pretty good
	at trying to take into account the effects of making people
	wait when it is issuing regulations. And they actually have
	values that they ascribe to people's travel time and waiting
	time. So that is a good practice that a lot of other agencies
	could learn from.
	Mr. Shuster. It is good to hear there are some good
	examples. I would like to continue talking to you in this
	discussion to try to identify more and more of these types of
	good programs that are out there.
	A final question to the mayor. You are under a consent
	decree. One hookup for every four you have to de-hookup. What
	is--why--what is the ratio? Who came up with that, and what is
	the sense in that? I don't----
	Mr. McCarthy. In New York State we work with the New York
	State Department of Environmental Conservation, which acts as
	the EPA's representative. And it was the terms that they put
	forth on the city to enter into the decree and move forward.
	And we want to remedy the problem, where we have the outflow,
	but that is the terms that they gave us.
	Mr. Shuster. Right, but what is it based on, just their--
	they just pulled it out of the sky and said, ``one to four
	sounds good to us''? Because it sounds to me like, from your
	testimony, it causes you a lot of harm.
	Mr. McCarthy. We have right now a project where--it is an
	old industrial city. We have--a number of partners have come
	forth within the community, and we are doing a new construction
	housing project, fair market, within the city. We are having
	trouble getting the approval to be able to hook those houses up
	within the city of Schenectady to handle the wastewater because
	of the consent order.
	And over--we are permitted at 18.5 million gallons a day.
	Our average now is running about 11.8 million last year. And
	over the last 7 or 8 years, we have reduced the flow within our
	systems by about 4 million gallons a day, through dealing with
	I&I [inflow and infiltration] issues. So we have tried to do
	that. But again, it is that regulatory environment that
	sometimes logic just is not part of the discussion.
	Mr. Shuster. I went over my time, Mr. Chairman. Thank you
	very much for letting me.
	And you mentioned the important word, because my father
	keeps staring me on the wall. He would always say that people
	come in his office--when you start talking logic, he says that
	is the greatest sin in Washington, DC, is to think logically.
	So I think all of you are sinners at the table today.
	Mr. Graves of Louisiana. Thank you, Mr. Chairman. We are
	going to go to the gentlewoman from Illinois, Mrs. Bustos, for
	5 minutes.
	Mrs. Bustos. Thank you, Chairman Graves and Ranking Member
	Napolitano. I appreciate you holding this hearing. And I also
	want to thank all of our witnesses for being here today.
	In Illinois--I represent the northwestern region of
	Illinois--we have a real problem. Our aging water
	infrastructure is inefficient and can even put public health at
	risk. On top of that, we know that our fix-as-fail approach to
	locks and dams puts our growers and manufacturers, as well as
	the navigation industry, in a guessing game of whether they
	will be able to deliver to consumers on time. So, simply
	unacceptable.
	When we invest in our water infrastructure we create good-
	paying jobs, protect our public health, and help get goods to
	market more efficiently. There is no reason we shouldn't work
	together to make sure our country's water infrastructure
	programs work for users and help address the massive backlog
	many of our communities face.
	So, again, my district, northwestern Illinois, live along
	the Mississippi River. The Illinois River runs through the
	southern part of my congressional district. So locks and dams
	are absolutely critical. So when I think of the water
	infrastructure, certainly I also think of water lines and the
	Clean Water Act. But in my district we also, as I said, think
	about navigation.
	So, for the panel, is anyone here prepared to discuss the
	navigation infrastructure on our rivers? And just wondering if
	that is something that any of our panelists would care to
	address. And that can be addressed to any one of you. Anybody
	want to volunteer for that?
	Mr. DeGood. I would go ahead and just say that I think, as
	part of a broader infrastructure package, that inland
	navigation has to be a part of that. And we support efforts to
	try and take both the Harbor Maintenance Trust Fund and Inland
	Waterways Trust Fund off budget, so that the full amount of
	revenue that is paid in by users through excise taxes on barge
	fuel and through the goods that are moved through our ports can
	be put to good use constructing the kinds of projects and
	making sure that the number of days that locks and dams are out
	of service due to maintenance and delays goes down.
	Mr. Stine. Mr. Chairman, I am just going to speak to one
	project that I am familiar with in my role on the Great Lakes
	Commission, which is the replacement of the Soo locks, which is
	a critical piece of infrastructure, vital to the economy of the
	Great Lakes. Our harbor of Duluth and Superior in Minnesota/
	Wisconsin is a key piece of the national infrastructure,
	creates a vulnerability in our processing of goods and services
	across the Great Lakes, St. Lawrence Seaway, and that is one
	critical project that the Great Lakes Commission has passed
	resolutions supporting and has spoken up clearly on.
	So that is in a different hat that I wear on a different
	day. I will be back next week on behalf of that organization.
	Mrs. Bustos. Anybody else have anything to add on that
	topic?
	[No response.]
	Mrs. Bustos. All right. So this one I will address, Mr.
	Stine, to you. And then also, Mayor McCarthy. You guys had
	mentioned the State revolving funds in your testimony. It has
	been really important to my congressional district. The Clean
	Water State Revolving Loan Fund has been an invaluable resource
	in our area. We have got--including an $11 million sewer
	improvement project that wrapped up last year in a town called
	Rock Island, Illinois.
	Also, in a community called Galesburg, in my congressional
	district, incredibly important to replace about 2,000 solid
	lead lines that are going to people's homes from the water
	main. And so very important.
	Wondering if you have thoughts about the demand for these
	revolving loans, and whether the demand is outpacing what
	Congress provides annually in appropriations for that fund.
	Mr. Stine. Mr. Chair, Mrs. Bustos, yes, the demand far
	outstrips the available funding. States apply various
	approaches to leverage those dollars through their own
	resources. But the need is somewhere in the area of a couple
	hundred billion dollars over the next 5 years. Just for
	drinking water systems alone, it is probably $300 billion over
	the next 15 years. And as for clean water and wastewater
	infrastructure, the appropriations through the revolving funds
	are a significant source of revenue for States and local
	communities to meet those needs.
	Mrs. Bustos. Mayor McCarthy?
	Mr. McCarthy. Thank you. It is really critical for a lot of
	municipalities, and also smaller levels of Government, where
	the revolving loan funds--you know, New York you also have a
	set of expertise from that side, where they are doing unique
	projects that are in water and wastewater, so that they add a
	little bit of value to the community. And the no-interest and
	low-interest loans are, again, sometimes deal-makers in terms
	of allowing communities to go ahead with the projects, to meet
	the regulatory requirements that we are all dealing with.
	So I would encourage Members to look at funding those at
	levels that provide adequate resources for the local
	governments.
	Mrs. Bustos. All right, thank you. And I have used up my
	time. I yield back, thank you.
	Mr. Graves of Louisiana. Thank you. And I am going to turn
	to the former chairman of this subcommittee and mentor, Mr.
	Gibbs from Ohio, for 5 minutes.
	Mr. Gibbs. Thank you, and I want to congratulate Chairman
	Graves on your new position. I look forward to working with you
	in the majority.
	Anyways, Mr. Ellig, it is really refreshing to hear
	somebody talking about challenges we have with regulations. And
	your comment about the--some of our agencies using research to
	support their agenda, and then also using the media or social
	media--I can think of one example, and that was the United
	States rule that was pushed through I think was biased. Would
	you agree that that was an example of research that--to drive
	an agenda, a political agenda? And the----
	Mr. Ellig. Oh, yes. I am aware of that example, and it was
	highly controversial. I think, from my perspective, the bigger
	problem is when you have agencies that are supposed to be doing
	objective analysis, and then that gets turned into something
	that is supposed to be used for advocacy, rather than something
	that is supposed to inform decisions.
	Mr. Gibbs. Mayor McCarthy, thank you for referencing my
	integrated planning permitting bill. I really appreciate the
	support from the Conference of Mayors.
	Can you elaborate a little bit on your consent decrees? You
	know, this permitting planning bill, you know, it is really to
	develop a long-term plan and set benchmarks on goals. But when
	you are on a consent decree and under the restrictions of the
	permit, how is that--on hindering--is it--on the cost side,
	what would this bill--how would it really help you on the cost
	side?
	Mr. McCarthy. Our--some quick background on the overflow
	that we are dealing with is a valve in the city of Schenectady
	that we----
	Mr. Shuster. Can you pull the mic closer? Pull the mic
	closer to you a little bit----
	Mr. McCarthy. I am sorry. It is a valve in the city of
	Schenectady that we would open two or three times a year for
	hours during the day to handle high-water events. And that is
	the decree that we had to enter into. It is, you know, $14
	million that we are addressing to remediate that.
	We want to stop the outflow. But again, the cost and then
	the criteria where you have the 4-to-1 offset, it is very
	frustrating. We are taking an old, industrial city, we have got
	a lot of good things happening, we are seeing new investment,
	we are seeing people view the community differently. It is the
	birthplace of GE celebrating its 125th anniversary as a
	company. They are looking at opportunities within the
	community. And the 4-to-1 is, again, extremely restrictive.
	And where we have met all the other criteria--we have
	taken--we are permitted at 18.5 million gallons a day. We are
	only running about 11.8 million. And the last 4 years, through
	management, we are reducing the I&I inflow into the system. We
	have reduced that by about 4 million gallons a day. And if I
	would be able to----
	Mr. Gibbs. Yes, but having a longer framework than 5
	years--the permit is 5 years, I believe, that--you know, set
	benchmarks that reach that.
	Are you under--being fined in this consent decree, or not?
	Mr. McCarthy. We have not--well, there is always the threat
	of being fined. But we are, again, working in a manner where we
	have entered into the consent decree. We have negotiated with
	it, and trying to remediate the issue and again move forward so
	it is in everybody's best interest, even though the terms are
	frustrating to try and manage a city on a daily basis.
	Mr. Gibbs. Mr. DeGood, you brought up Cleveland and their
	challenges of having--I am from Ohio. The integrated planning
	permitting bill, how would that--in your instance, you brought
	up Cleveland. Would that be a benefit to them? Can you expound
	on that?
	Mr. DeGood. Well, I think it is important to note that, in
	the Cleveland example, they signed on to that consent decree in
	2011. And the program of projects that they put forward that
	the EPA agreed to includes a combination of gray and green
	infrastructure. So I think we are supportive, broadly, of the
	concept of integrated planning. But it is not necessary for
	that legislation to be passed for people to be able to use
	green infrastructure as part of a consent decree.
	I think our only concern with the legislation as is
	currently drafted is that some of the language comes
	precariously close to allowing affordability to be a mechanism
	by which we actually are reducing or weakening the limitations
	that we would normally put into our NPDES permitting processes.
	And I think, for us, that is probably a break point.
	Mr. Gibbs. My intent is really for the EPA and the local
	entities, districts to work together to come up with a long-
	term solution. Because the problem you have, they can't charge
	the ratepayers enough, they can't always do everything at once,
	and give them that flexibility. But if you--a long, multiyear,
	long-term plan and set benchmarks, and you can get there.
	Mr. DeGood. Sure.
	Mr. Gibbs. I think that----
	Mr. DeGood. In the Cleveland example, they signed a 25-year
	agreement. So I think, you know, the EPA was cognizant of the
	fact that Cleveland had financial restrictions, and that the
	level of improvements that they were asking for were
	substantial enough that they went ahead and gave them what, at
	the time, was one of the longest consent decree implementation
	windows that had been ever given. So I think the EPA is aware
	of those challenges that local districts face.
	Mr. Gibbs. Thank you, Chairman. Time is up.
	Mr. Graves of Louisiana. Thank you. I recognize Mrs.
	Lawrence for 5 minutes.
	Mrs. Lawrence. Thank you, Chairman and Ranking Member, for
	this opportunity. Thank you all so much, panel.
	I am--I represent the--a part of Michigan. And so the Flint
	water situation was something that was extremely emotional, and
	something that has reconfirmed my commitment to clean water in
	America, and protecting our families and our health through
	water.
	Months after warning signs, the water in Flint, Michigan,
	as you know, did not meet the levels of--in lead that would be
	healthy for children in a city that depended on that. A man-
	made disaster is a tragic outcome.
	We have found that in September 2016 the U.S. GAO released
	its study of water infrastructure for selected mid-sized and
	large cities with declining population, and it was alarming,
	what they found. They found many of them have lost a
	substantial percent of their population, as you mentioned,
	Mayor. And, because of that, they are seeing declining
	revenues, which makes it difficult to address the
	infrastructure needs. And in our investigation of Flint we
	found the finance and revenue of maintaining a water system was
	part of the equation that was used to make a very unfortunate
	decision.
	So my question is to you, Mayor McCarthy. In your written
	statement you talk about how your city is not atypical. It is
	older, it is industrial. I know a thing or two about that,
	being a mayor, myself. Can you talk about the water and
	infrastructure challenges in cities? Because you hear, as--U.S.
	Conference of Mayors.
	And if any other member wants to talk about that, because
	it is important that, as we move forward with the matches that
	we are talking about, that is the challenge--that we are very
	clear on investment in water infrastructure is not a luxury or
	a pretty thing, it is a necessity.
	So, Mayor, please.
	Mr. McCarthy. Thank you. The water in wastewater systems
	are key, in terms of basic quality of life, and then also,
	trying to rejuvenate and reinvigorate older communities. You
	want to be able to attract people there, you want to attract
	business, and you have to have those systems in place. We want
	them to maintain and be able to produce the highest quality
	water, treat wastewater.
	But the numbers, to be able to finance those systems, are a
	lot of times a burden on the community, and it comes a point
	where businesses, families, individuals choose to live in other
	places, as opposed to the older urban areas that you have some
	of the infrastructure in place that really just needs to be
	upgraded and modernized.
	Mrs. Lawrence. So I know in Flint--and you are seeing it,
	too--is economics. It is housing, and it is also--builds a
	community or--but most of all, it is a health component. Some
	people say quality of life. It is a necessity.
	Mr. McCarthy. Absolutely.
	Mrs. Lawrence. OK. Anyone else want to comment on that?
	[No response.]
	Mrs. Lawrence. Mr. DeGood, in your written statement you
	talk about the need for sound regulations such as the Clean
	Water Act, which restores and maintain the chemical and
	physical integrity. Are the regulations the reason we have a
	crisis in our water infrastructure in America today?
	Mr. DeGood. I think the answer to that is a resounding no.
	I think we have a crisis of underinvestment that is, in some
	cases, a shared burden for locals in the Federal Government.
	There are certainly places where we can point to where
	water services are underpriced. And I think, rather than trying
	to point to the regulations that we ask EPA and our State
	partners to enforce as being the problem, what we need to do is
	put some additional money on the table.
	I think what the construction grants program--from the
	original 1972 Clean Water Act--demonstrates for us is that when
	the Federal Government shows up with resources, often times
	local elected officials find the courage to raise money
	themselves. That is not always the case. There are certainly
	communities that are so economically challenged that you need
	to have different matching requirements and an understanding
	and a sensitivity to that.
	But those initial construction grants were, for the most
	part, a 55/45 Federal/local match. So our local communities
	stepped up and did what was asked of them. But I think, when
	you are faced with a bill and somebody is telling you it is all
	on you, go ahead and borrow the money, go ahead and do a P3,
	that is really not the answer.
	Mrs. Lawrence. Thank you. I want to close with this. In
	America we are going to start seeing water affordability being
	an issue in our cities, because we have to fund them, we have
	to provide safe, clean water. And when cities step up to make
	those investments, they have to get the revenue. And water
	affordability is going to be a issue we are going to talk
	about.
	Thank you. I will yield back.
	Mr. Graves of Louisiana. Thank you. Next is the gentleman
	from Pennsylvania, Mr. Smucker. Five minutes.
	Mr. Smucker. Thank you, Mr. Chairman. As a member of the
	Transportation and Infrastructure Committee, but not a member
	of this subcommittee, I appreciate the opportunity to be here
	this morning. Thank you for allowing me to do that.
	I specifically want to highlight an issue that is important
	in the district that I represent in Pennsylvania, the
	Chesapeake Bay watershed.
	Mr. Ellig, this was brought up earlier by Mr. Gibbs. And I
	appreciated, as well, your testimony in regards to the--some of
	the problems with our regulatory process which produces
	undesirable results at times. And specifically for our
	community, the interpretation of the EPA in regards to wOTUS,
	Waters of the U.S., and the extension of what is considered
	waters of the U.S., is a major problem.
	This was also briefly mentioned by Mr. Kernion. I was a
	contractor, as well, and so I understand the impact on
	development projects of interpretation of that law.
	But the Pennsylvania Farm Bureau president, Rick Ebert,
	noted after President Trump's Executive order that virtually
	all of Pennsylvania's land mass can be claimed by EPA officials
	as regulated water, subjecting land owners and communities to
	extreme and needless Federal permitting requirements and land
	use restrictions.
	These farming groups have also claimed that if they were to
	dig a drainage ditch on their property, it would potentially
	become a United States waterway under the WOTUS provisions.
	This is an example that I think--some of what you were
	describing--of an overreach of regulations.
	So, Mr. Ellig, I just--you know, how is it, if we have a
	regulation like that in place, how could groups go about trying
	to find a better balance between the goal that we want to
	achieve and that overreach?
	Mr. Ellig. Well, yes. I understand why this is a difficulty
	for development. Also, for farmers in Lancaster County. I think
	we have to go back to basics and insist that our discussions of
	regulation be based on actual fact, and investigation of
	whether regulations really are likely to create the intended
	benefits, and whether they actually do, after they have been
	implemented, create the intended benefits.
	Because, unfortunately, an awful lot of the debate over
	regulation, particularly environmental regulation, has become
	kind of a holy war, where everybody argues on the basis of
	their intentions, rather than what actually happens as a result
	of the regulation.
	Mr. Smucker. Thank you----
	Mr. Ellig. So I would say, first things first, let's get
	back to factual investigation of what the actual likely results
	and the actual----
	Mr. Smucker. Thank you----
	Mr. Ellig [continuing]. Results of regulation----
	Mr. Smucker [continuing]. Thank you, and completely agree.
	One of the other points you made, which I thought was very
	good, you said regulatory agents often act as if enforcement is
	more important than compliance or achievement of regulatory
	outcomes.
	And just recently, farmers in the Chesapeake Bay watershed
	did a voluntary study and highlighted some of the actions that
	have already been taken, for which they are not recognized. So,
	for instance, 475,800 acres of nutrient manure management;
	97,562 acres of enhanced nutrient management; 2,164 animal
	waste storage units; 2,106 barnyard runoff control systems. You
	can go on and on.
	And the point I want to make is what farmers in my area
	want to see is more collaboration and less enforcement. Why can
	we not see that occurring by some of our agencies?
	Mr. Ellig. Well, you would get that if agencies were
	rewarded--individual agencies were rewarded for actually
	achieving results, rather than for achieving outputs or
	activities that are measurable--that may or may not produce
	results.
	Mr. Smucker. And again, additional point to make is
	farmers, builders, contractors, the municipalities in my area
	want to see clean water. They all enjoy clean waters on their
	farms. They want the Chesapeake to be clean. But again, they
	want to see more of that collaboration, which, I think, is
	sorely missing.
	So I--again, I appreciate your comments. I know we have
	taken the first step in this regard with the President's
	Executive order. And I know that this is of concern to the
	chairman of this subcommittee, as well, and I look forward to
	us continuing to work on this issue. Thank you.
	Mr. Ellig. Thank you.
	Mr. Graves of Louisiana. Thank you. We are going to go to
	the gentleman from California, Mr. Lowenthal, for 5 minutes.
	Dr. Lowenthal. Thank you, Mr. Chair and Ranking Member
	Napolitano. I am honored to join you as a new member of the
	Transportation and Infrastructure Committee, and the Water
	Resources and Environmental Subcommittee. I look forward to
	working together to improve the work of the Army Corps, to
	protect the Clean Water Act, and to build upon its successes,
	and that we craft a robust and equitable Water Resources
	Development Act. I want to thank you for convening this
	hearing, and for the people on the panel, for highlighting the
	importance of water resources and the relevant Federal agencies
	and the role they play in our Nation's infrastructure.
	First question I have is for Mr. DeGood. Recent reports--
	and certainly not--we are not clear yet, but they seem to
	indicate that President Trump plans to propose devastating cuts
	to the EPA's funding and staff levels. Several of its most
	important programs may face elimination all together. Your
	testimony, and the written testimony, highlighted the
	importance, the enormous importance of the EPA to communities
	across the country, from protecting clean water infrastructure
	to safeguarding public health.
	What do you think that these cuts that we have been at
	least hearing about to EPA would mean for the Federal
	Government's efforts to maintain and improve clean water
	infrastructure?
	Mr. DeGood. So I think I would make three points to that
	question.
	One, we have had a lot of talk already this morning about
	frustrations that people have--I think often legitimate--with
	the length of permitting processes. I think when you are
	talking about potentially a 30-percent or greater cut to EPA's
	budget, you are talking about eliminating many of the
	positions, many of the people whose job it is to try to review
	these applications and to provide timely determinations. So, if
	our goal here is to give people greater certainty and to speed
	those processes up, I don't see how cutting Federal staff and
	Federal budgets are going to do that.
	But I think, more importantly, we really undermine our
	long-term productivity and long-term community health. As just
	one example, the section 106 grants program provides money
	directly to States to allow them to do the very implementation
	work of things like the Clean Water Act, right. This is
	monitoring and assessing water qualities, developing water
	quality standards, determining total maximum daily loads,
	ensuring compliance, taking enforcement actions. This is really
	the core of laws like the Clean Water Act. We hand off to
	States to do that work. And when we take money away through EPA
	budget cuts, we take away their ability to enforce those laws.
	And the last thing I will note is about the brownfields
	program. These are very productive dollars. And it comes down
	to a question of efficiency, and it comes down to linear
	infrastructure. If you allow a parcel that has been polluted
	over time through a prior industrial use to sit idle, and you
	go out and you have to build new infrastructure--that is water,
	that is sewer, that is roads, stop lights, all the things that
	go along with that--to try to attract new housing or new
	commercial development, you are creating additional facilities
	that you are going to have to try to maintain for decades into
	the future.
	When we remediate parcels that have existing pollution,
	what we are really doing is creating a pathway for future
	economic development at that site that will generate tax
	revenue on top of existing infrastructure. It is not something
	we have to go out and build new. So we are really cutting off
	our nose to spite our face when we talk about zeroing out the
	brownfields program.
	Dr. Lowenthal. Thank you. Next question I want to clarify
	something that I am not really clear on.
	Mr. Kernion, you brought up the issue of funding for
	Federal water agencies. And we have heard already of the
	backlog the Army Corps has for authorized but unconstructed
	projects, which--where the valuing is estimated at over $56
	billion.
	Now you talked about--in your written testimony,
	especially--that environmental review processes have played a
	major role in some of the backlog, or holding up the process.
	But we also heard from the opening statement from Ranking
	Member DeFazio that the Corps budget cannot deal with the
	backlog. It is not only--or it is not really the burdensome
	regulations that are leading to the backlog, but the lack of
	funding for the Army Corps.
	Could you kind of deal with this relationship and where you
	see this relationship between the funding and also the
	regulations?
	Mr. Kernion. Personally, I have seen both. And I am just
	speaking offhand. I have worked for--as a contractor for the
	Corps of Engineers now for over 30 years. And I have seen quite
	a bit of the both take place. In waiting on funding, I have
	seen projects shut down because they didn't have funding, where
	they have actually gone to contractors and said, ``Look, in
	order to keep going, you have to finance your project, or stop
	and take the brunt of it until we get more money appropriated
	for the project.''
	I have also seen the environmental things which I alluded
	to when I spoke about before. One of the biggest things that I
	have seen personally it wetlands issues. Now maybe EPA issues
	in other States--of course, where we are, it just seems like it
	is more wetlands.
	Congressman here talked about diverting water. Every time
	you divert water, it is not opening up another waterway, but,
	uh-oh, is that water going to go to an area that is now going
	to become a wetlands, and it is not dry--it is now dry, but you
	run water through it, it might be wet, and then you can't use
	the land again.
	And so, I have seen, actually, both of them. I don't know
	if I am answering your question right, but that is my personal
	experience with it.
	Dr. Lowenthal. Thank you, and I yield back.
	Mr. Graves of Louisiana. Thank you. Next we are going to go
	to a gentleman from Illinois, Mr. Davis.
	Mr. Davis. Thank you, Chairman Graves. Congratulations. I
	had a quick question for you that--you know, I kind of injured
	my finger on the chair, scooting my chair in earlier. Do you
	think the Corps could use some investigations money in their
	account to help me get to the bottom of why you have tried a
	conspiracy in your first hearing to attack my finger? I mean
	this is just outrageous.
	Mr. Graves of Louisiana. I think the Corps would love to
	investigate that.
	Mr. Davis. First off, it is great to have Chairman Graves
	and the Water Resources and Environment Subcommittee here, and
	I appreciate all of the testimony. We are all in the same boat.
	We all want to see infrastructure built in this country.
	Mr. Stine, you mentioned that the Mississippi River starts
	in Minnesota and ends in Louisiana. Well, you know what? It
	digests through Illinois. And our navigation system and the
	infrastructure that it needs to continue to keep our navigation
	system moving from north to south and south to north is right
	in my district. So it is imperative that we see action.
	And that is what we haven't seen. Twenty years ago I saw
	which plan the Corps was going to use to update the locks and
	dams in the Illinois and Upper Miss systems, and we have seen
	nothing since then, except the plan that they wanted to use. We
	see no investment. And we have seen, from the last
	administration, since 2010, that we have invested nothing in
	NESP to try and upgrade those antiquated systems. So we have
	got to have the progress in the middle of your area and his
	area to ensure that our products get from point A to point B
	and out into the global marketplace.
	That being said, Mr. Kernion, great to see you again. We
	met last night. One of the things that I proposed in the last
	WRDA [Water Resources Development Act] bill was to require a
	GAO study to study alternative models for management of the
	Inland Waterways Trust Fund, including a possible not-for-
	profit corporation or Government-owned corporation that would
	actually put us on a path to have a continuous funding source
	for doing what the Corps of Engineers should do, and has done
	well in the past. That is to build infrastructure and design
	infrastructure. Seems pretty simple to me. Seems like sometimes
	over the last few years they may have lost their mission.
	That being said, you are a builder. What would more
	certainty, faster project delivery of navigation projects for
	someone like you, what would that mean to your employees? And
	what would it mean if we had a continuous funding source that
	industry could utilize to actually do what the Corps should be
	doing, build things?
	Mr. Kernion. Well, I am going to answer it like this. I
	think the Mississippi River, if you look at it, is probably--
	and you compare it to a human body, it is one of the largest
	arteries, or the largest artery in the body. And at that point
	I believe you have to do everything you can to keep that river
	flowing, keep it from overflowing, and keep commerce up and
	down that river, because commerce is as important as anything.
	One of the things talked about is dredging the river deeper
	to get the Panamax ships into the river. If that was done, we
	would actually get--more commerce going up and down the river
	would flow, and it would be a different way to run, you know,
	goods through that artery.
	At the same time, the river is treacherous and is deadly. I
	have seen the river do some devastating things. I didn't
	realize water was as dangerous as it could be until I had a
	levee break years ago--I tried to stop it--after a hurricane,
	and it is brutal, what it can do and the damage it can do to
	people.
	But also, and what you had alluded to last night, was
	getting the projects funded for up there. For us, of course, we
	are 100 percent behind that. We would love to see it happen.
	The more projects up and down the river, we are happy. I was
	last year's president of Mississippi Valley--Mississippi River
	Valley's Associated General Contractors, and a lot of the
	contractors in our district work on that river, and they depend
	on getting the funding to build that infrastructure.
	Mr. Davis. Well, a lot of the contractors in my district
	work on that river. And you are absolutely right, we have got
	to have some movement.
	And I don't have much time left, and I know the chairman,
	he is not going to give me any extra time. So I want to make
	sure you--the witnesses know my opinion. You know, I think a
	body resembling the inland waterway users board and including
	other key stakeholders like many of you at this table,
	including Government representation, like the Corps of
	Engineers, would do a much more efficient job of identifying a
	project schedule and making expenditures to priority projects
	that have already received approval from Congress.
	After all, you guys are the people paying for the projects,
	right? Let's actually make sure they get done.
	And, with that, I have got about 2 seconds left, and I am
	going to yield it back, Mr. Chairman.
	Mr. Graves of Louisiana. That is impressive efficiency.
	Thank you, Mr. Davis.
	With that, we are going to yield to the gentlewoman from
	Connecticut, Ms. Esty.
	Ms. Esty. Thank you, Chairman Graves and Ranking Member
	Napolitano. And thank you to the entire panel. Many of us are
	bouncing between committees. I have got all three of mine going
	simultaneously at this hour.
	A couple of quick comments. To Mr. Stine, greetings from my
	husband, former commissioner of DEEP in Connecticut, and thanks
	for the good work ECOS does, in having grown up, in part, in
	Winona.
	To Mr. Kernion, father and grandfather, both AGC
	contractors, and my grandfather built locks and dams on the
	Mississippi River. So some experience with that.
	To Mr. Inamine, I grew up in northern California, in part.
	Very familiar with the Feather River and challenges there.
	So, to Mr. Ellig, I want you to know that there is support
	on both sides of the aisle for focusing on technology and
	outcomes. And I think it is vitally important, with constrained
	budgets, having been a local town council member, State
	representative, and now in Congress, we have got to figure out
	how to be faster and more efficient. And I appreciate you
	flagging time as a real cost. And that is something we really
	need to focus on, and I think we need to streamline our systems
	and get better outcomes with less time, and free up those
	resources to actually be spent on getting the outcomes.
	I wanted to turn to the issue of brownfields. And I think
	Mr. Katko is going to join me on that. We have legislation we
	are putting back in in this Congress. We need funding and to
	really focus on the vital importance of that, and rebuilding
	communities.
	And it is actually related to some of the issues Ms. Pape
	raised, too. If we don't get the funding in those communities--
	and I represent Connecticut, I have got cities like Waterbury,
	Connecticut, which has major parcels of land right in the
	middle of downtown. If we don't rehab those, we are not going
	to be able to create jobs, we are not--we are going to be
	chewing up farmland elsewhere. So it is bad for the ecology of
	other communities. And, frankly, we are not going to have the
	jobs.
	So I would like, if you could, Mayor, if you can talk a
	little bit about how important brownfields are for
	revitalization of our communities, and which of the grants that
	are most important to you. Because, again, if we are looking at
	a 25-percent or anything like that kind of cut, we are going to
	be really challenged in figuring out how to work through that
	backlog on brownfields.
	Mr. McCarthy. Thank you. Brownfields, as you point out,
	they are underutilized, they are a negative influence on
	communities. And they have, largely, a proud history. There was
	something there at one time that added value. For whatever
	reason, it is no longer there. And so you have to have the
	tenacity and the systematic approach to work through whatever
	the problems may be.
	And a lot of times people will--they think that you can't
	solve the problem. But you can. And it is--requires the
	partnership that State, local, Federal-level, the private
	sector to come up, to do the evaluation, to look at the
	opportunities that are there, to create real value, and so that
	the funding from the Federal level is key in driving that
	overall discussion and the partnerships that can form if the
	funding mechanism is in place.
	Ms. Esty. We would love to cycle back with you on some
	specific proposals we were looking at to include P3s and other
	ways of leveraging those resources, whether it is for parks,
	which are part of creating that quality of life, or repurposed
	industrial sites, or shopping malls, or whatever it may be. We
	are trying to put some urban greenhouses in one of ours to
	bring food back into the city, cap those sites, but then
	actually repurpose them for use.
	Mr. DeGood, you talked a little bit about that. Can you
	speak both about brownfields and the importance of that, and
	also return a little bit to the importance of leveraging that
	Federal funding? Because I saw it at the local level. If
	communities don't have those match for water systems, they
	can't get the goodwill of local residents to raise the property
	tax to pay for those projects.
	Mr. DeGood. I think that is absolutely right. I think one
	of the hardest things, as an elected official, is when somebody
	tells you that it is your responsibility, and your
	responsibility alone. And it is a hard thing to go out into
	your community, even if you passionately believe in the value
	of something like the Clean Water Act or the flood control
	standards that the Army Corps has, even if you want to try to
	engage in redevelopment, if you are saying, ``We are on our own
	here.''
	And so, that is why, when we start hearing stories about
	the kinds of budget cuts that this administration is
	contemplating for the Environmental Protection Agency, it is
	disheartening because we know that, ultimately, for an
	administration that has spent so much time talking about jobs,
	taking these dollars out are actually going to do just the
	opposite. It is going to take the stick out of local elected
	officials' hands and make them unable to deliver for their
	communities.
	Ms. Esty. I see my time is expiring, so I am going to yield
	back my 5 seconds. Thank you.
	Mr. Graves of Louisiana. Thank you, Ms. Esty. With that we
	are going to turn to the gentleman from New York, Mr. Katko,
	for 5 minutes.
	Mr. Katko. Thank you, Mr. Chairman, and congratulations on
	your chairmanship. I look forward to working on this committee.
	Mr. McCarthy, welcome, and I appreciate your testimony thus
	far. As you may or may not know, I am from upstate New York, in
	Syracuse, and spent a lot of time in Schenectady. And in so
	doing, I led--it led me to the conclusion that Schenectady is
	very much in this same boat of all the upstate New York cities.
	We have lost tremendous amounts of manufacturing and tremendous
	amounts of tax base over the last several decades, and that has
	led to profound infrastructure problems, which I am not quite
	certain that this--we have delved into it with enough detail.
	That is what I want to do for the next few minutes.
	As you may or may not know, in Syracuse we still have--we
	have such a profound problem with our water infrastructure that
	some of the pipes we use in the city of Syracuse are still
	wooden from, like, the late 1800s, early 1900s, which is
	unbelievable to me. Last year we had well over 100 water main
	breaks in the city of Syracuse. And some of the really up-and-
	coming areas, like Armory Square were often peppered with back
	hoes digging up lines and fixing them and water problems, and
	it just seems, in this day and age, that is crazy.
	So, with that as a backdrop, if you could describe for me,
	you know, the state of your water infrastructure, and then I
	have some followup questions from there.
	Mr. McCarthy. Schenectady is fortunate for its water
	supply. We get that from the Great Flats aquifer, the
	recharge--it is the Mohawk River. And so we have a high
	quality, really, low-cost source of water.
	Mr. Katko. Same in Syracuse, yes.
	Mr. McCarthy. Again, it is one of the great things about
	upstate New York. And at the same time, as you point out, we
	have infrastructure that was put in 100 years ago, 125 years
	ago, sometimes longer. And it just has a realistic life span.
	And so, you have to be able to manage those resources. And
	without--you know, you hope that those pipes are going to last
	another 50 years. The reality is they are not going to. And the
	ability to predict when something happens is unfortunate--it is
	just that element of randomness, so that you are dealing with a
	major break in a water line or sewer line, and it is always
	occurring at 2 o'clock in the morning on a weekend, and you are
	having to mobilize crews that would be normally doing other
	things.
	But if we can get ahead of that problem, those cities in
	upstate New York--and mirrored across the country--have long,
	distinguished histories of significant economic outputs,
	centers of innovation, technology, and you want to have that
	water and sewer system in place so that we can position the
	communities for, really, that next generation of innovation and
	evolution of urban life.
	Mr. Katko. Right. And I totally agree with you. And from an
	industry standpoint, I can only note that we really have a
	limitless supply of water between Lake Ontario, the Finger
	Lakes--it is just amazing, in upstate New York, that the
	quality of water that we have is consistently some of the best
	in the country, and we don't have systems to deliver it.
	So how do you, in your mind, assess the adequacy of the
	funding to replace these--to fix these projects? And what would
	you suggest we try to do, from a legislative standpoint?
	Mr. McCarthy. In Schenectady, we have largely dealt with it
	ourselves, even though we have had some assistance from the
	State, some assistance from--some Federal money in the funding
	streams. But Schenectady gets referenced continually as having
	one of the highest tax rates, not only in New York State, but
	in the country. And it is because we are paying for those
	things. And it is not only water and sewer, but it is other--
	roads, school district--other community assets.
	And you get to the point where, even though you are trying
	to keep up and keep ahead of the curve, it creates a negative
	influence where it, in fact, deters our ability to attract
	residents, to attract business, to plan the assets of the water
	and other natural resources that exist not only within
	Schenectady, but in upstate New York.
	Mr. Katko. All right, so how would you--I understand the
	problem, but how would you fix it? What would you think we need
	to do?
	Mr. McCarthy. I would like a funding formula that has
	participation at all levels, so that you have Federal money,
	there is State money, there is local money. Some of the highway
	and bridge money, it is a good formula, it is 80 percent
	Federal, 15 percent State, and then 5 percent local.
	Mr. Katko. Well, how about the Clean Water State Revolving
	Fund? Is that a fund you can access? And, if you can, is that
	adequate for the job?
	Mr. McCarthy. We have found it adequate, because, again, we
	have had low cost for our water source. I am not sure that is
	shared by other communities across the country, and I don't
	have some of that information directly available, but we will
	have it forwarded to you at the conclusion of today's hearing.
	Mr. Katko. I appreciate it. Thank you. I yield back my
	time. Thank you, Mr. Chairman.
	Mr. Graves of Louisiana. Thank you, Mr. Katko. And, with
	that, we are going to recognize the gentleman from California,
	Mr. Garamendi, for 5 minutes.
	Mr. Garamendi. Chairman Graves, thank you--
	congratulations--Ranking Member Napolitano, and what is left of
	the committee.
	Just a couple of comments before I ask a question. Mike
	Inamine is here. He faced a most difficult situation over the
	last month, when the floods occurred in California when the
	Oroville Dam spillway failed and--releasing an extraordinary
	amount of water down the Feather River through his responsible
	area on the west side of the Feather River and the community of
	Yuba City, causing--the failure of the spillway caused a
	massive evacuation of over--almost 200,000 people, of which
	about 100,000 of those were in the community that he was trying
	to protect by flood-fighting.
	An extraordinary piece of work, fighting a flood while
	everybody was leaving town. And I know you and your crews did
	not leave town, you stayed there and fought the flood, even
	though you might have been under 20 feet of water had that
	spillway actually failed. That is the emergency spillway
	actually failed. Within 7 hours you would be under 20 feet of
	water. Courageous, necessary.
	One of the major--as I understand it, Mr. Inamine, is that
	the--one of the significant flood fight areas--that is a levee
	that was failing--was to become a part of a Corps of Engineers
	project, but had not yet been designated in the New Start
	programs that we receive occasionally from the Corps of
	Engineers.
	My point here is that if that particular 1-mile stretch of
	the levee--I think there was two, two stretches, actually--had
	been designated in the 2017 work plan, would you have been
	fighting floods?
	Mr. Inamine. There are really two parts to respond to that
	question. And it gets back to my earlier comments about how
	flood control projects are repaired or improved. And it is that
	we collaborate with Corps of Engineers to get New Start
	designations, new projects constructed by the Corps. And, in
	fact, that reach of critically deficient levee has been a
	source of a couple of failures, protects 20,000 people, just by
	itself, was part of the Federal project authorized by Congress
	in 2014.
	But through the State of California, we--for these
	critically damaged sites, we can't wait. And so we applied,
	while we were working with the Corps on the civil works
	process, we worked through the Corps of Engineers under the 408
	process, and used our own money, and just do it ahead of time.
	Well, under that circumstance, in fact, we had applied to
	repair that reach of levee, or a portion of that critically
	damaged reach of levee, last year. We were lined up to do it
	last year. And because of some cultural resource issues, we had
	to go through another--a second 45-day review period through
	the 408 process. Rather extraordinary. As a result, killed our
	construction season.
	Fast forward to last month. We are flood-fighting that
	reach that would have normally have been repaired under a
	normal construction season. That is money out of our pockets.
	We are hopeful that the State will reimburse us at the end of
	the day. And that was work that could have been done in a
	normal construction season.
	Mr. Garamendi. I think the point I want to make here is
	that there are all kinds of projects. There are the nice-to-do
	projects, there are the necessary projects, and then there are
	those projects upon which human life depends. And in this case,
	these levee improvements, they are known levee weaknesses. It
	is not just in my district, although I have 1,100 miles of
	levees, but around the Nation.
	There are known weaknesses in levees upon which human life
	is at risk. And we ought to be prioritizing, you know, nice to,
	necessary, economic development or whatever, and then life
	threatening. And we should urge the Corps of Engineers, in the
	process that we have now established, where they come to us
	with their proposed projects, that we keep in mind the life-
	threatening projects.
	And so, we have more than enough in my district, but I
	suspect that the Members of Congress, some of whom are still at
	this committee hearing, have similar necessary-to-preserve-
	human-life projects.
	I am going to be out of time in 6 seconds, but I want to
	really congratulate, Mike, you and the work you have done. You
	have taken more than 40 miles of levee, you have upgraded those
	40 miles of levee in a very rapid process. Had you not done
	that, surely, even without the failure of the emergency
	spillway, there would have been lives lost, had you not been on
	top of these projects over the last several years.
	Congratulations to you and thank you for that effort.
	Mr. Graves of Louisiana. Thank you, Mr. Garamendi. Next we
	are going to go to the vice chair of the subcommittee, Mr. Mast
	from Florida. You are recognized for 5 minutes.
	Mr. Mast. Thank you, Chairman, and each of you for your
	testimony today. I really appreciate it. I enjoyed reading
	them.
	You know, number one, you know, I live in one of those
	areas. Very similar issues as so many here, issues with the
	Corps of Engineers, issues with the infrastructure that is
	going on in my community. Personally, it is regularly plagued
	by massively harmful discharges coming out of Lake Okeechobee,
	and going out towards the east coast and west coast of Florida.
	They are implemented by the Corps of Engineers. Sometimes these
	discharges are--freshwater into our saltwater estuaries are as
	high as 7 million gallons a minute at their peak flows. It is
	very devastating. We get just absolutely devastating algae
	blooms.
	And again, probably the most disconcerting part to me is
	that these are imposed by the Federal Government on us. But
	they are not cleaned up by the Federal Government, and that is
	one of the worst things that I can say about them.
	Now, one of the other things that we could say about this
	is this is just freshwater that is simply lost out to sea. And,
	as we look at each of our areas across the country, where we
	see people--some people that don't have enough water--and, as
	was said before, some of us that have way too much water--it
	can become very troublesome and very frustrating to all of us.
	And that is just as an aside here.
	Now, from my vantage point, one of the best ways to ensure
	that water is utilized in a beneficial way, instead of being
	wastefully discharged, is for the Corps of Engineers, in many
	of these cases, to marry their flood control efforts and that
	mission with their ecological restoration mission that they
	have in so many places.
	For my area it is mirroring the flood control of the dikes
	surrounding Lake Okeechobee with the ecological restoration
	that is south of Lake Okeechobee that feeds into the Florida
	Bay and the Florida Everglades. And that means, in order for
	them to get this done in a timely way--which hasn't happened in
	my area--tackling what we are talking about today, these
	burdensome regulatory problems, construction issues, funding
	delays that are just slowing the Corps of Engineers from
	completing projects. In my area the Herbert Hoover dike
	rehabilitation, 60-plus projects. When they don't get done, it
	really adds up.
	So what I really want to ask you all, this kind of, to me,
	is Exhibit A of how there can be otherwise well-intentioned
	rules and regulations that exist out there, but they actually
	end up hurting our communities and impeding environmental
	protection and impeding the progress of infrastructure.
	So, with that in mind, I was particularly struck by your
	testimony, Mr. Kernion, when you said a couple of things. One,
	in order to build a 21st-century infrastructure, we have to
	build it some time this century. And I think that is a very
	important thing to say. But more specifically, when you talked
	about the Port of Savannah going through a 14-year
	environmental review process--14 years--and a 30-year-to-
	completion process.
	So, in that being your testimony, I wanted to ask you two
	specific things. One, can you pinpoint one specific thing, the
	biggest bang for your buck, ``This is what we do to enable this
	infrastructure to be completed to''--you know, which piece of
	it do we get out of the way? What is your number-one piece to
	enabling this to get things done?
	Mr. Graves of Louisiana. Make sure your microphone is on,
	please.
	Mr. Kernion. I said this earlier. The biggest thing that I
	have seen is the--lack of a better way to say it, red tape with
	the environmental procedures and approvals to get projects
	moving forward.
	Mr. Mast. Now, you listed in your testimony a number of--
	you know, you listed wildlife, EPA, NOAA, and a number of
	others. Can you point to one specifically?
	Mr. Kernion. Yes. Well, there is a lot of things. And I
	will give you an example. If we are building a levee, and there
	is a tree in the way and it has got an eagle in the top of the
	tree, that levee is going to be moved to buy houses, something
	is going to happen. Don't have anything against eagles, I think
	they are great. But it costs a lot of dollars to move it, you
	know, rather to go ask the guy if he could find another tree.
	But--and I am not trying to be funny about it, but I will
	see some things that are--really get to be, like, major impacts
	to what we do, that is all. And it is the environmental things,
	more so than anything. Indecisiveness? Yes, big issue there.
	But a lot of the environmental red tape on some things that are
	really--you know, they shouldn't happen, that is all.
	Mr. Mast. OK. I have another question for you--I got a
	couple more seconds here--and that is this. I get an answer
	often from the Corps of Engineers when I talk about timelines
	for getting things done that there is simply not enough
	manpower, not enough qualified crews to go out there and get
	some of the projects done, specifically in my area, around Lake
	Okeechobee, that the Corps of Engineers is conducting.
	Can you speak to whether you think that is an accurate
	assessment? Is there enough crews out there to go out there and
	complete things in a faster way? Do you guys have the manpower,
	as general contractors, construction contractors?
	Mr. Kernion. Do the contractors, or does the Corps?
	Mr. Mast. The contractors.
	Mr. Kernion. The Corps of Engineers--General Van Antwerp,
	years ago, asked us after Katrina if the contractors had the
	manpower to put it in place, all of the restoration efforts.
	And contractors stepped up to the plate and got it done. Corps
	of Engineers stepped up to the plate and got it done, also.
	One of the things that I do not know is--I have never
	worked personally with that district around Lake Okeechobee. I
	have heard some rumors about guys that have worked with them,
	and I will refrain from comment on that, what I have heard, but
	it is a different district. And when you work for the Corps of
	Engineers in different districts, they operate totally
	different.
	You know, we did FEMA trailers on a Corps contract after
	this most recent flood up in--around Baton Rouge, Louisiana.
	And dealing--they had one of the district--I think it was the
	northern Alabama--came down. Totally different ballgame than
	working with the New Orleans district. I mean totally
	different. Some of it was shocking, what we have to go through,
	be quite honest with you.
	But I don't--I have never worked with the people in your
	area to be able to comment on that that much, as far as the
	Corps, then. But the contractors, I think contractors are--can
	come up to the plate and make it happen.
	Mr. Mast. OK. My time has expired, so I thank you for your
	comments.
	Mr. Graves of Louisiana. Thank you, Mr. Mast. I am going to
	go to the ranking member, Mrs. Napolitano, for 5 minutes.
	Mrs. Napolitano. Just last one before we let you go. Mr.
	DeGood, if the President were to put forward a proposal that
	privatized leverage private equity capital as the primary
	Federal role in addressing water infrastructure projects, what
	would be the likely impact to communities like mine, or anybody
	else's, where local ratepayers already having a difficult time
	making ends meet in addressing the water quality in their area?
	And the second question--and I will make it--I want to get
	over it--you described a recent trend for local communities to
	take on more debt to address local water challenges. Yet often
	the communities have insufficient tax and user fee revenues to
	cover these debts. I strongly believe they want clean water,
	just like anybody else, but often have competing needs for
	municipal service, fire, and police that need to be addressed.
	And the solutions for this change would be what? How can the
	Federal Government play in this?
	Mr. DeGood. Right. I think it is important to understand
	that private equity, even with the presence of the tax credits
	that President Trump and some of his team have talked about,
	would have very little value for many communities. If you are
	already struggling to find the financial resources to repay
	municipal bonds at 3 percent or 3.5 percent, it is unlikely
	that you are going to magically have the resources to be able
	to cover the return on private equity that can be anywhere from
	10 to 18 percent, depending on the project.
	And again, even with the presence of tax credits bringing
	down the cost of that equity somewhat, it is still going to be
	a stretch for communities. And I think one of the things that I
	have found that is troubling about some of the public-private
	partnerships that have happened in recent years is the extent
	to which local communities are paying the premium price that
	goes along with a P3, but not receiving some of the benefits
	that we normally associate with this form of procurement.
	Specifically, if we compare this to the transportation side, we
	see that there is more of an opportunity for true risk
	transference, especially for projects that may exceed $1
	billion or $1.5 billion.
	But when we are talking about smaller systems, where the
	only infrastructure upgrades that are contemplated as part of
	these capital improvement programs are basic repairs and
	rehabilitation--replacing pump stations, we can't really
	honestly say that that private-sector contractor is taking on
	this risk payment because of the complexity of the work.
	Again, some of these contracts have the public maintaining
	complete liability for any environmental discharges that
	violate Federal or State laws. They have the public on the hook
	for any rate increases for the water deliveries they may take
	for regional drinking water providers. They have the public on
	the hook for any cost overruns in the infrastructure projects
	that they have in their capital plan.
	So, to my mind, it is troubling for us to say to local
	communities, ``Don't worry, you can always go out, take equity
	capital, take these tax credits from the Trump administration,
	and that is going to solve your problem.'' It just really
	isn't.
	Mrs. Napolitano. Anybody else?
	[No response.]
	Mrs. Napolitano. Thank you, Mr. Chair.
	Mr. Graves of Louisiana. Ms. Pape, I am curious if you
	would care to respond to Mr. DeGood's comments.
	Ms. Pape. I would. I can't speak to a leased form of
	private equity investment, but I can speak to acquisition of
	assets by private entity. And in that case, in many instances,
	we can spread those costs, because we have a larger base. It is
	a very capital-intensive industry.
	We also take on all risk. We don't leave risk with the
	community. We take it on, not only for the assets that we are
	buying, but for upgrading. And asset renewal is an ongoing
	effort. It is not a once and done, it is every day, every year,
	you are continually looking at what needs to be replaced, what
	condition do you have.
	So, in terms of the private companies that buy assets, we
	do assume the risk, and we are able to spread out the cost, as
	well. So the impact on the customers is not as great.
	Mr. Graves of Louisiana. Great, thank you. I will tell you
	I have a number of other questions for all of you. You have
	been patiently sitting there for 2 hours, and we are most
	appreciative. We are going to have, I think, a number of
	questions for the record for each of you.
	I just want to say, in closing, I am going to go back to
	home, and Mr. Kernion is from Louisiana. He made mention in his
	testimony about a situation at home where we have an eroding
	coast. We have lost approximately 2,000 square miles of our
	coast, wetlands. And we are all familiar with how important
	wetlands are, and we are familiar with the Clean Water Act, and
	404 permits, and things along those lines.
	Well, the primary cause of this wetlands loss in the State
	of Louisiana is actually the U.S. Army Corps of Engineers. And
	it is interesting to see this--kind of the irony in the
	regulatory program, in that they are making everyone else
	protect wetlands and restore wetlands and mitigate wetlands,
	yet in the case when their own actions cause loss, they
	literally are doing nothing. And, not only doing nothing, but
	in fact, impeding efforts, as was noted, by the State and
	others, in some cases, to actually restore wetlands.
	And so, look, this isn't a partisan issue, this isn't--this
	is something that all of us need to be working very closely
	together on. Make note. The administration, again, announced
	that they intend to pursue a $1 trillion infrastructure
	package.
	We have a project in south Louisiana called the Gulf
	Hurricane Protection Project that has been in the study phase
	since 1992. The Federal Government has not stuck a shovel in
	the ground. We have a hurricane protection project in Louisiana
	called the West Shore project. The project just came out of the
	study phase, and, thankfully, the committee authorized the
	project in the WRDA bill, but it was in the study phase for
	approximately 42 years before--I want to be clear--before a
	project recommendation was made, right? So not a single thing
	has been done, just a project recommendation.
	We heard Mr. Inamine note that in his case, when he carried
	out the project on his own, that he was able to do it for
	approximately half the cost.
	So this isn't anything to beat up on anyone, this isn't a
	partisan issue. This is all about the fact that we have limited
	resources. And many of you, in your testimony, talked about the
	need for greater investment. Well, one of the ways you get
	greater investment is by stretching your dollar, by ensuring
	that you are most efficiently using the resources that you
	have. If you can carry out a project for half the cost, you can
	do two of them.
	It is a simple concept, and something that I think we need
	to be paying careful attention to, the amount of money that we
	are spending on administrative, on regulatory compliance, and
	on project implementation to ensure that we can sit here and
	tell taxpayers that we are maximizing the limited resources
	that are available.
	So, with that, I again want to thank all the witnesses. You
	can expect questions for the record that we will be submitting,
	and ask for your response to those. And thanks again. It has
	been very helpful. And if no other Members have anything to
	add, the subcommittee stands adjourned.
	[Whereupon, at 12:17 p.m., the subcommittee was adjourned.]


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