[Senate Hearing 114-552]
[From the U.S. Government Publishing Office]
S. Hrg. 114-552
AN EXAMINATION OF PROPOSED ENVIRONMENTAL
REGULATION'S IMPACTS ON AMERICA'S SMALL BUSINESSES
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
MAY 19, 2015
__________
Printed for the Committee on Small Business and Entrepreneurship
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED FOURTEENTH CONGRESS
----------
DAVID VITTER, Louisiana, Chairman
JEANNE SHAHEEN, New Hampshire, Ranking Member
JAMES E. RISCH, Idaho MARIA CANTWELL, Washington
MARCO RUBIO, Florida BENJAMIN L. CARDIN, Maryland
RAND PAUL, Kentucky HEIDI HEITKAMP, North Dakota
TIM SCOTT, South Carolina EDWARD J. MARKEY, Massachusetts
DEB FISCHER, Nebraska CORY A. BOOKER, New Jersey
CORY GARDNER, Colorado CHRISTOPHER A. COONS, Delaware
JONI ERNST, Iowa MAZIE K. HIRONO, Hawaii
KELLY AYOTTE, New Hampshire GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming
Zak Baig, Republican Staff Director
Ann Jacobs, Democratic Staff Director
C O N T E N T S
----------
Opening Statements
Page
Vitter, Hon. David, Chairman, and a U.S. Senator from Louisiana.. 1
Shaheen, Hon. Jeanne, a U.S. Senator from New Hampshire.......... 2
Ernst, Hon. Joni, a U.S. Senator from Iowa....................... 20
Witnesses
Panel 1:
Maresca, Charles, Director of Interagency Affairs, Small Business
Administration, Office of Advocacy, Washington, DC............. 4
Panel 2:
Dougherty Maulsby, Darcy, Fifth-Generation Iowa Farmer, Dougherty
Farm, Lake City, IA............................................ 21
Noel, Karl Randall, President, Reve Inc., Laplace, LA............ 27
Milito, Hon. Elizabeth, Senior Executive Counsel, National
Federation of Independent Business, Washington, DC............. 40
Bulis, Benjamin, President, American Fly Fishing Trade
Association, Bozeman, MT....................................... 48
Alphabetical Listing and Appendix Material Submitted
American Sustainable Business Council
Statement.................................................... 81
Bulis, Benjamin
Testimony.................................................... 48
Prepared statement........................................... 50
City of Baltimore Council Bill 14-0185R
Resolution Introduced and Adopted September 8, 2014.......... 83
Dougherty Maulsby, Darcy
Testimony.................................................... 21
Prepared statement........................................... 24
EPA
Summary of the Discretionary Small Entity Outreach for
Planned Proposed Revised Definition of ``Waters of the
United States''............................................ 85
Summary of the Small Entities Outreach Meeting on the
Proposed Rule for Redefining Waters of the United States
under the Clean Water Act, October 15, 2014................ 99
Ernst, Hon. Joni
Testimony.................................................... 20
Latino Business Council
Opinion by Ruben Guerra...................................... 111
Maresca, Charles
Testimony.................................................... 4
Prepared statement........................................... 6
Markey, Hon. Edward J.
Advocacy Waters of the United States Contacts: Small
Businesses and their Representatives....................... 62
Milito, Hon. Elizabeth
Testimony.................................................... 40
Prepared statement........................................... 42
National Farmers Union
Letter Dated September 22, 2014.............................. 113
National Federation of Independent Business
Jurisdictional Comments...................................... 66
RFA Comments................................................. 75
National Wildlife Federation
Letter Dated May 18, 2015.................................... 124
Noel, Karl Randall
Testimony.................................................... 27
Prepared statement........................................... 29
Shaheen, Hon. Jeanne
Testimony.................................................... 2
Small Business Owners Favor Regulations to Protect Clean Water
Phone Poll Dated July 2014................................... 132
Vitter, Hon. David
Opening statement............................................ 1
AN EXAMINATION OF PROPOSED
ENVIRONMENTAL REGULATION'S IMPACTS ON AMERICA'S SMALL BUSINESSES
----------
TUESDAY, MAY 19, 2015
United States Senate,
Committee on Small Business
and Entrepreneurship,
Washington, DC.
The Committee met, pursuant to notice, at 2:02 p.m., in
Room 428A, Russell Senate Office Building, Hon. David Vitter,
Chairman of the Committee, presiding.
Present: Senators Vitter, Fischer, Gardner, Ernst, Ayotte,
Shaheen, Markey, and Booker.
OPENING STATEMENT OF HON. DAVID VITTER, CHAIRMAN, AND A U.S.
SENATOR FROM LOUISIANA
Chairman Vitter. Good afternoon, everyone, and we will call
the committee to order.
Welcome to the Senate Committee on Small Business and
Entrepreneurship's hearing assessing the economic and
regulatory impacts of the EPA and the Army Corps of Engineers'
proposed rule to redefine the term ``waters of the United
States,'' which will be finalized in the near future.
The purpose of this hearing is to examine the impact that
the proposal will have on small businesses as well as the
agencies' egregious circumvention of the very regulatory
process set in place to protect small businesses. Specifically,
the EPA and the Corps have publicly concluded that the proposed
rule will not have any significant impact on a substantial
number of small entities, and they also concluded that the
proposal will have no direct impacts on small entities.
Now, I think this is flat out outrageous, that the
administration would pretend that the proposal would not have a
substantial and a direct impact on small businesses. It is so
outrageous, in fact, that I will soon introduce a Sense of the
Senate Resolution condemning the administration's circumvention
of this important process and will hold a vote on that
resolution in this committee.
Regarding the content of the rule, the sweeping language in
the proposal represents a direct threat to private property
rights. By expanding the types and numbers of water bodies
subject to federal control, these agencies will further expand
their authority enormously to tell home owners, small
businesses, and others what they can do on their own property.
This provides an opening for the federal government to
increase its role yet again, and dramatically, in local land
use planning and decisions. State and local zoning commissions
will see their rules displaced by Washington bureaucrats who do
not truly understand the implications of the policy changes
they will be pushing forward with. This will lead to costly
litigation and expand the ability of radical environmental
groups to sue land owners over how they manage and use their
own property. Additionally, the rule as proposed will have a
significant negative impact on agriculture, and particularly
smaller family farms.
On October 1, 2014, the Office of Advocacy, an independent
office of the SBA, sent a letter to the EPA and the Army Corps
that was highly critical of their finding that the proposal
will not have any significant impact on a substantial number of
small entities. The Office of Advocacy's role is to represent
small entities in the federal rulemaking process. In fiscal
year 2014, it achieved regulatory cost savings to small
businesses of more than $4.8 billion. A substantial part of
these savings--in fact, the great majority, $4.6 billion--arose
from changes to proposed EPA regulations.
In its October letter, Advocacy unequivocally stated, and I
quote, ``Advocacy believes that EPA and the Corps have
improperly certified the proposed rule under the Regulatory
Flexibility Act because it would have direct significant
effects on small businesses. Advocacy recommends that the
agencies withdraw the rule and that the EPA conduct a Small
Business Advocacy Review Panel before proceeding any further
with this rulemaking,'' close quote. As we know, EPA has
completely ignored that input.
Under the Regulatory Flexibility Act, when an agency finds
that a proposed rule will have a significant economic impact on
a substantial number of small entities, it must evaluate the
impact, consider alternatives, and in the case of EPA, convene
a Small Business Advocacy Review Panel to consider the input of
the Office of Advocacy and the small business community. But,
by certifying that the rule will not have that impact, which is
clearly just not the case, the EPA and the Corps effectively
shut down this process mandated by law.
As Chair of the Small Business Committee, I am committed to
ensuring that we do not allow that sort of action to proceed
unchecked. That is why we are having this hearing. That is why
we are going to have this resolution, which I will be
introducing soon and certainly hope can gain bipartisan support
in this committee and in the Senate overall.
Now, I turn to our distinguished Ranking Member, Senator
Shaheen, for her opening comments.
OPENING STATEMENT OF HON. JEANNE SHAHEEN, RANKING MEMBER, A
U.S. SENATOR FROM NEW HAMPSHIRE
Senator Shaheen. Thank you, Mr. Chairman.
Good afternoon, everyone. Welcome to today's hearing. I
want to begin by thanking both panels who are here to testify.
As the Chairman noted, today, we are discussing the impact
of environmental regulations on small business, and
specifically, we are going to focus on the joint efforts by the
Environmental Protection Agency and the Corps of Engineers to
amend their definition of Waters of the United States. This
term is integral to clarifying which bodies of water will be
covered under the Clean Water Act.
I am pleased that on our first panel, we will have Mr.
Maresca, who is the Director of Interagency Affairs with the
Office of Advocacy of the Small Business Administration,
testifying. You will bring an important voice to this
afternoon's hearing, given the role the Office of Advocacy has
representing the interests of small businesses in the federal
rulemaking process.
In addition, I think it is beneficial that our second panel
will provide small business perspectives across a variety of
diverse industries, including agriculture, home building, and
outdoor recreation.
I am disappointed that we do not have officials from the
two relevant federal agencies who are charged with promulgating
this rule joining us today. I believe that in order for there
to be a meaningful and constructive conversation about the
proposed rule's impact on small businesses, we need to have all
parties who are part of this rulemaking process participating
in the discussion.
I hope that today's hearing is not about attacking the
Clean Water Act or obstructing the efforts of the federal
government to make regulatory decisions. This hearing should
focus on whether the agencies responsible for promulgating this
rule, the Environmental Protection Agency and the U.S. Army
Corps of Engineers, complied with their statutory requirements
to ensure that small businesses are considered in the
rulemaking process.
As we all know, the EPA and the Corps of Engineers
determined that the rule would not have a significant impact on
small businesses, and I am disappointed that they are not here
to answer questions and tell us how they arrived at their
conclusions.
It is my sincere hope that moving forward this Committee
can work together in a bipartisan manner to effectively
communicate the interests of small businesses with federal
agencies charged with crafting federal regulations.
So, thank you, Mr. Chairman, and I look forward to hearing
from today's witnesses.
Chairman Vitter. Thank you very much, Senator Shaheen.
And, just for the record, let me point out that we would
have welcomed the EPA and the Corps to be here, and it is my
understanding that the Minority staff reached out to them about
that and were basically told that they were not going to be
coming. So, that underscores, I think, the frustration of many
of us with their decision and with the tone and the attitude
they have taken in making this certification, which I think--I
am just speaking for myself--is just flat out contrary to a
whole, whole lot of evidence.
Okay. At this point, I would like to introduce our first
witness, Charles Maresca, Director of Interagency Affairs at
the Small Business Administration's Office of Advocacy. Mr.
Maresca will be the lone witness on the federal panel because
of what I just said. He leads Advocacy's efforts to monitor
federal agencies' compliance with the Regulatory Flexibility
Act, and, of course, that is what we are talking about with
regard to this proposed waters of the United States rule today.
Welcome, Mr. Maresca.
STATEMENT OF CHARLES MARESCA, DIRECTOR OF INTERAGENCY AFFAIRS,
OFFICE OF ADVOCACY, U.S. SMALL BUSINESS ADMINISTRATION
Mr. Maresca. Thank you, Chairman Vitter, Ranking Member
Shaheen, members of the committee. I am honored to be here this
afternoon to present testimony to you on behalf of the Office
of Advocacy of the U.S. Small Business Administration regarding
the Environmental Protection Agency and the Army Corps of
Engineers' proposed rule on the definition of waters of the
United States under the Clean Water Act.
Advocacy is an independent office within the SBA that
speaks on behalf of the small business community before federal
agencies, Congress, and the White House. The views in my
testimony do not necessarily reflect the views of the
administration or the SBA and this statement has not been
circulated to the Office of Management and Budget for
clearance.
And, I ask that my complete testimony be entered into the
record. It includes a detailed background on Advocacy's work
with this proposed rule, but I will just summarize my thoughts
in these remarks.
Chairman Vitter. Without objection, that will be entered
into the record.
Mr. Maresca. As Director of Interagency Affairs in the SBA
Office of Advocacy, I manage a team of attorneys that works
with the federal government agencies during the rulemaking
process to reduce the regulatory burdens on small businesses
and oversee the requirements of the Regulatory Flexibility Act.
The RFA requires federal agencies to consider the effects of
their proposed rules on small businesses and other small
entities, including small government jurisdictions and small
nonprofits.
The Clean Water Act was enacted in 1972 to restore and
maintain the integrity of the nation's waters. The Act requires
a permit in order to discharge pollutants, dredged, or fill
materials into any body of water deemed to be a water of the
United States. The courts have left much uncertainty regarding
what constitutes a water of the United States. This uncertainty
makes it difficult for small entities to know which waters are
subject to Clean Water Act jurisdiction and permitting.
To address this uncertainty, the EPA and the Corps have
proposed a rule which would revise the regulatory definition of
waters of the United States and would apply to all sections of
the Clean Water Act. Advocacy has been engaged with EPA, the
Corps, and small entities on this issue from its inception,
including holding roundtable discussions in Washington, D.C.,
and Los Angeles, California, in July and August of 2014. In
addition, the Office participated in two small entity meetings
held by EPA and the Corps in 2011 and 2014.
Advocacy has met with and spoken to numerous individuals,
small entities concerned about the effects of this rule over
the last four years. These small entities represent many
different industries, including but not limited to agriculture,
real estate, home builders, cattlemen, farmers, and the mining
industry. Feedback from these small entities has remained
consistent. Small businesses believe that the rule as proposed
by EPA and the Corps is an expansion of jurisdiction and will
increase costs to small businesses.
On October 1, 2014, the Office of Advocacy sent a letter to
EPA and the Corps expressing our concerns with their RFA
compliance. Advocacy believes, first, the rule will impose
direct costs on small businesses. Second, these costs will have
a significant economic impact on those small businesses. And,
third, the agencies incorrectly certified the rule and should
have conducted a SBREFA panel.
In conclusion, Advocacy and small businesses are concerned
about the rule as proposed. The rule will have a direct and
potential costly impact on small businesses. Advocacy has
advised the agencies to withdraw the rule and conduct the
SBREFA panel prior to promulgating any final rule on this
issue.
I would be happy to answer any questions you might have.
Thank you.
[The prepared statement of Mr. Maresca follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Vitter. Thank you very much, and we will start
those questions.
Mr. Maresca, you stated in your testimony that EPA and the
Corps should have certified that the proposal will have that
significant economic impact on a substantial number of small
business entities and, therefore, they should have convened an
SBAR panel. Can you please explain how that panel process helps
protect the interests of small businesses?
Mr. Maresca. Yes, Senator. The requirement of a panel that
is in the RFA for EPA requires that they convene a meeting with
small entity representatives. The panel consists of--would
consist of EPA, Advocacy, and OMB. We would hear--they would
present to those small entities any data that they had
collected in support of the rule that they were proposing and
they would suggest to the small entity representatives a number
of regulatory alternatives, including a preferred option, in
most cases, and the small entity representatives would have
been given an opportunity to comment on all of those
alternatives and to suggest ways that the rule could be--could
mitigate the costs.
Chairman Vitter. So, just to clarify and make sure I
understand, it is significant in at least two senses. Number
one, the agencies would have to present their factual evidence
and basis for this rulemaking, proposed rulemaking. And, number
two, they would have to present alternatives, correct?
Mr. Maresca. That is correct. That is the point of the
SBREFA panels.
Chairman Vitter. Okay. Your testimony also states that the
agencies incorrectly used a standard from 1986, a standard that
has been abrogated by the U.S. Supreme Court, to find that the
rule will not expand the jurisdiction of the Clean Water Act
and, therefore, not affect small businesses. However, in their
economic analysis, the EPA and the Corps used the more recent
and correct standard to show that the rule could expand the
jurisdiction of the Clean Water Act. It seems like they are
trying to have it both ways and use whatever standard is
convenient at the time. Can you provide some additional detail
on how the use of an incorrect baseline obscures what the real
impacts of their proposal might be?
Mr. Maresca. Well, we believe that the impact of the rule
is the change in practices that small businesses would have to
begin. The way that agencies measure the costs of their rules
in any regulatory analysis is governed by--generally governed
by OMB Circular A-4, which tells them to use the world as it
is, and the world as it is right now for waters of the United
States is the EPA guidance from 2008. And, this rule would--the
rule, as proposed, would expand the jurisdiction as compared to
that guidance.
Chairman Vitter. Okay. As we have discussed, the EPA and
the Corps through this fraudulent certification are avoiding
conducting this RFA analysis, including holding the SBAR panel.
In your expert opinion, could the underlying RFA law be
modified or strengthened to prevent this in the future?
Mr. Maresca. Senator, the problem with this rule as
proposed is the misapplication of case law and the choice--the
incorrect choice of a baseline. I am not sure how to--how we
would amend the RFA to approach that, those problems. However,
we do think that the RFA could be improved in the area of
indirect effects and we would be happy to work with you on
that.
Chairman Vitter. Could this improper action under federal
law be the basis for future litigation challenging the rule?
Mr. Maresca. Certain parts of the RFA are judicially
reviewable, and an incorrect certification is one of the--could
be a basis for a complaint in federal court.
Chairman Vitter. Okay. Thank you. I will turn to Senator
Shaheen.
Senator Shaheen. Thank you, Mr. Chairman.
I just wanted to clarify that it is my understanding, as
well, that we asked both the EPA and the Army Corps to be
present at today's hearing and that they were not able to do
so, they said, for scheduling reasons. So I wonder, Mr.
Maresca, if you could talk about why neither of those agencies
seems to feel--or said that there was no need to appoint a
Small Business Advocacy Review Panel. What was the reasoning
for that?
Mr. Maresca. The reasoning, as stated, is that the costs
that are imposed by the rule are indirect and there is case law
on the point that whether an agency needs to consider the
indirect effects of a rule. We believe that the case law was
misapplied. They also based their certification on the choice--
on whether there was an expansion of jurisdiction or not. As
compared with the 1986 rule, there is not. As compared with the
2008 guidance, there is.
Senator Shaheen. Right. I understand that, and I know that
you pointed that out in the letter. What was the response when
you did that? Because it would seem that it might be prudent to
err on the side of, given the discrepancies in the statutes, to
err on the side of making sure that they had responded to any
potential small business concerns.
Mr. Maresca. Senator, we would agree with that. In their
own economic analysis, EPA points out that there are, in fact,
costs to this rule.
Senator Shaheen. As I have talked to representatives from
small business, I have heard from some people who feel like
there will be a significant impact because of this proposed
rule. There are others who feel like they support it. There are
others who feel like it does not really make any difference.
So, I am sure you heard those different perspectives, and can
you explain how Advocacy weighted those diverse perspectives as
you were trying to make recommendations and consider the
position?
Mr. Maresca. Senator, the statute requires us to do
outreach to small businesses, and we have done an extraordinary
amount of outreach on this rule, and we have heard from many,
many small businesses in every industry that we have talked to
that there are costs to this rule. We have examined EPA's
numbers as they are in their own economic analysis and we
conclude, along with EPA, that there are costs. We do not know
at this moment how expensive those costs are. We do know that,
according to EPA's own figures, the cost for a Section 404
permitting, for example, will increase by $50 million, and we
think that is at least $50 million, and there are many, many
other costs that have not been counted.
Senator Shaheen. So, when you were looking at the
determination of impact, it was the cost issue that you were
weighing as opposed to anything else that might be affecting
small businesses?
Mr. Maresca. That is typically what we look at, is the
cost. The RFA does require us to look at ways to mitigate, to
examine with the agencies ways to mitigate the cost of the rule
in order to achieve the same regulatory objective.
Senator Shaheen. And, did you do that? Did you--when you
brought those concerns about cost to the attention of the
agencies, what was their response and did you have any
discussions about potential mitigation to address those?
Mr. Maresca. Senator, in the several meetings that we have
had with EPA, with the small entity representatives, with small
business stakeholders, that has been brought up. I would
suggest the response of EPA is this proposed rule. But, there
has been--there is no--if there had been a SBREFA panel, there
would have been a presentation of alternatives and there could
have been a consideration of whether those alternatives--which
of those alternatives would mitigate the cost to small entities
the best.
Senator Shaheen. So, basically, they said, we do not need
to appoint a panel because we do not think there are any costs
involved.
Mr. Maresca. That is correct.
Senator Shaheen. Okay. Thank you, Mr. Chairman.
Chairman Vitter. As we go to Senator Ernst, I just want to
clarify something. A couple of times, Senator Shaheen asked
about their response. In terms of your written letter strongly
objecting to their certification, has there been any direct
written response?
Mr. Maresca. No, Senator, there has not been a written
response. That is not unusual. The statute requires that EPA
respond in writing to our written comments, so we do expect
there will be a written response, but there is not one at this
point.
Chairman Vitter. There has not been to date?
Mr. Maresca. No.
Chairman Vitter. Is there any assurance that they are going
to do that, even before they come up with this proposed rule?
Mr. Maresca. It would--as I say, it would be unusual for an
agency to respond in writing to our comment letters before they
issue a final rule.
Chairman Vitter. Okay. Senator Ernst.
Senator Ernst. Thank you, Mr. Chair, and thank you, Mr.
Maresca, for being here today.
It is greatly concerning. I wish we would have had the
Corps members and the EPA representatives here. Very early this
year, I sent a letter to the EPA Administrator and asked her to
come to Iowa. I would love to have her in Iowa with some of her
leadership just to show her the impact on small businesses,
manufacturers and members of our agriculture community, when it
comes to waters of the United States. I have yet to hear back
from the EPA, which I thought was--at least they could have
responded to me. So, very disappointed that they are not able
to join us and give their perspective on this particular rule.
I am also concerned--you mentioned that the EPA, because
they are not direct costs, just maybe indirect costs, they did
not feel the need to look at this any further. That is deeply
troubling to me because there are so many times that we talk
through the implications of legislation or rules and
regulations and what are those secondary and tertiary effects
that will hurt our small businesses. So, disappointed to hear
that.
But, in addition to the work here in the Small Business
Committee, I also sit on Homeland Security and Governmental
Affairs, and one of the subcommittees that I sit on also
focuses on regulatory reform. And, through that particular
subcommittee we have done a few hearings on the regulatory
climate that we have right now, and one of the recurring themes
I have heard about and we have discussed seems to be the trend
of these federal agencies going around the necessary and
appropriate economic and cost analysis--cost/benefit analysis.
And, as an independent office within the SBA, can you speak
a little more about these issues as it pertains to the federal
agencies and them trying to circumvent what I see as a
specified process. Can you speak to that?
Mr. Maresca. Certainly, Senator. In general, we find the
agencies are very good at complying with the Regulatory
Flexibility Act. We have worked with the agencies to train them
in how to do that since 2003. And, in fact, EPA is one of our
model agencies. So, when they make these kinds of judgments, it
seems it is unusual. But, when they do, there are costs
involved, and the RFA requires that they, in this case, convene
a SBREFA panel.
Senator Ernst. Very good. Do you think that in this case,
they did take any public comment into judgment? Did they look
at those, do you believe? Have they indicated any of that to
you?
Mr. Maresca. Well, they have--they also convened several
roundtables and participated in stakeholder events. The
outcome, again, is this rule that does have significant
economic impact on small business.
Senator Ernst. Very good. Thank you.
Thank you, Mr. Chair.
Chairman Vitter. Sure. Senator Markey.
Senator Markey. Thank you, Mr. Chairman, very much.
Welcome, sir.
Mr. Maresca. Thank you.
Senator Markey. Thank you for being here. Clean water is
important to everyone. Eighty percent of small business owners,
a clear majority, favor the rules, clarifications in wetlands
protection set forth in the Clean Water rule, and EPA and Army
Corps of Engineers have spent years engaging in a transparent
rulemaking process. The agencies have met with stakeholder
small businesses, received over one million comments, held over
400 outreach meetings, used important time and resources, and
above all, important taxpayer dollars, and are now just weeks
away from producing a final Clean Water rule that will protect
our nation's vulnerable waterways and drinking water for 117
million Americans.
But, what you are saying is the agency should put the
brakes on the implementation of this economically critical and
scientifically rigorous rule before the public has even had a
chance to see the finished product. A decision like that would
disrupt and prolong the rulemaking and forces the agencies to
go back and solicit input from stakeholders they have already
consulted, consider factors they have already considered, and
then propose the rule all over again.
Has your office considered the impact on small businesses
of delaying the rulemaking and prolonging the uncertainty for
small businesses about what will be regulated under the Clean
Water Act?
Mr. Maresca. Yes, Senator. Those are concerns of our
office. The main concern that we have is compliance with the
Regulatory Flexibility Act. Every rule that EPA produces has to
comply with the RFA, and in this instance, it did not--they did
not comply with the RFA. And, so we--and, so, our job at
Advocacy is to speak for small businesses in that instance.
Senator Markey. Well, in the Environment and Public Works
Committee, we heard testimony from the New Belgium Brewery on
behalf of the businesses around the country that rely on clean
water for the success of their business. How does the Office of
Advocacy take the needs of those companies into effect?
Mr. Maresca. Senator, we take the needs of every small
business that we possibly can into account. Again, our
statutory obligation is to get federal agencies to comply with
the Regulatory Flexibility Act, and in this instance, EPA
should have convened a SBREFA panel.
Senator Markey. Well, the EPA has estimated that waste from
mountaintop removal coal mining has buried between 1,200 and
2,000 miles of Appalachian streams. This mining practice has in
some communities been linked to contamination of water
supplies, endangered wildlife, and threatened public health,
all so that much of the coal produced from the Appalachian
region can be exported to other countries in the world to
increase profits for the coal companies.
By opposing the Clean Water rule, coal companies are
continuing their assault on the administration's actions to
protect the public health and the environment from mountaintop
removal mining. Fossil fuel companies have also threatened
legal challenges to the rule before it has even been issued.
Will you please tell the committee the groups and
associations that your office met with or which groups
encouraged the Office of Advocacy to submit your comments about
the Clean Water rule.
Mr. Maresca. Senator, we met with small businesses in every
industry that we could find. They all said that there were
going to be costs to this rule.
Senator Markey. Will you submit to the committee the
companies that you met with, just so that we can have an
understanding of who it was that was seeking to lobby you on
this issue?
Mr. Maresca. We would be happy to do that.
Senator Markey. Okay. That would be very helpful.
A delay in the Clean Water rule would provide confusion,
not clarity, for small businesses and add to the delay of
important infrastructure projects and will create jobs--that
will create jobs and grow our economy. What would you say to an
unemployed iron worker, laborer, or American driver that just
crossed a near-crumbling bridge or pothole about the delay in
the final Clean Water rule?
Mr. Maresca. Senator, the point of the Regulatory
Flexibility Act is to create an environment for small
businesses to thrive and grow and provide more jobs,
ultimately, and our job is to ensure that the federal agencies
comply with the requirements of the statute.
Senator Markey. How many public meetings should an agency
have to hold on a proposed rule, in your opinion?
Mr. Maresca. Senator, I would say that probably varies with
the impact of the rule. But, in this instance, EPA should have
convened a SBREFA panel.
Senator Markey. Is 400 outreach meetings insufficient to
solicit input on a proposed rule?
Mr. Maresca. Senator, in none of those outreach meetings,
to my knowledge, did EPA present regulatory alternatives or
preferred options. In none of them did they present the data on
which they were basing the rule.
Senator Markey. And, finally, are you aware that OMB
reviewed the proposed rule and made the determination that the
proposed rule would not have significant impact on small
businesses? Are you aware of that?
Mr. Maresca. Senator, it is our statutory obligation to
speak on behalf of small businesses when it comes to issues
under the Regulatory Flexibility Act. In our opinion, EPA
should have convened a SBREFA panel because this rule will have
impacts.
Senator Markey. I think that we should let the EPA do its
job. I think delaying the Clean Water rules makes no sense.
Small business owners need clarity, not confusion. That is what
your recommendations are going to create and we are just going
to repeat the same process and, I think, come to the same
conclusions.
Thank you, Mr. Chairman.
Chairman Vitter. Thank you.
Senator Shaheen. Mr. Chairman, can I just ask that when we
receive the list from the Office of Advocacy about the
businesses you met with, that that be shared with all of the
members of the committee?
Chairman Vitter. Certainly. Of course. Without objection.
Senator Shaheen. Thank you.
Chairman Vitter. And, now we will go to Senator Gardner.
Senator Gardner. Thank you, Mr. Chairman. Thank you for
holding this hearing, and to Ranking Member Shaheen, thank you,
as well, and to Mr. Maresca, thank you for being here.
I, unfortunately, came in later to the discussion on waters
of the United States, but I do want to stress one of the
challenges that we have in Colorado. Of course, we are unique
among the states. We are the only state in the country that
distributes our water rights the way we do, through a court
system. We are entirely unique in that in the lower 48 states,
all of the water flows out of Colorado. No water flows into
Colorado.
In conversations with the EPA Administrator, Gina McCarthy,
at a hearing last year in the Energy and Commerce Committee, I
asked point blank if she was familiar with Colorado water law
and her response back was she is not familiar with Colorado
water law. And, I think the challenges--just one of the many
challenges that we face, that this rule would apply to rivers
that are intermittent flow. Two-thirds of Colorado waterways
are intermittent flow, and yet waters of the United States
would still affect and impact every single one of them, even
though they do not have water in them year-round.
In meetings with Colorado water districts, whether it is
Northern Colorado Water Conservancy Districts, whether it is
Denver Water, Colorado Springs Utilities, or the Colorado Farm
Bureau, every one of them is concerned about the federalization
of every molecule of water in the State of Colorado, and so I
think you are right to make sure and demand that these hearings
proceed in terms of understanding all that the waters of the
United States rule would do to small businesses, particularly
in light of the way a state like Colorado manages its water
rights.
I wanted to shift focus a little bit to the Endangered
Species Act. A few years ago, the Small Business
Administration's Office of Advocacy submitted comments to the
Fish and Wildlife Service on a proposed rule on designation of
critical habitat for the New Mexico jumping mouse. The Office
of Advocacy expressed several concerns about listing the mouse
under the Endangered Species Act and stated that the
designation would impose direct costs on the nation's small
businesses.
As we have seen in Colorado, we have got the Gunnison and
greater sage grouse. The Gunnison was just listed. I believe
there is litigation coming forward from Governor Hickenlooper
in the state. We have challenges with the lesser prairie
chicken and, of course, the Preble jumping mouse.
Just yesterday, the administration announced proposed
updates to the implementation of the Endangered Species Act,
which, it is my understanding, are intended to give states a
greater voice in the listing determinations. How can the Office
of Advocacy further insert themselves into this type of policy
making, since small businesses are our nation's job creators?
Mr. Maresca. Well, with regard--thank you, Senator. With
regard to the Endangered Species Act, we believe that Fish and
Wildlife Service could do a better job in considering the
impacts, not of the listing, necessarily, but of the critical
habitat designations, and we have been working with that agency
over many, many different CHDs.
Senator Gardner. So, how would you improve the critical
habitat designation? Does that mean taking into account, for
instance, in the greater sage grouse, the 11 states, would that
suggestion say, take a look at the large land area that would
be involved and then doing an economic analysis of the impact
that land area would have for critical habitat?
Mr. Maresca. We believe that Fish and Wildlife could take
better account of the economic analysis. They have broad
authority to exclude certain parts of an initial CHD, and we
have been working with the agency on that.
Senator Gardner. And, your concern about critical habitat,
of course, is because that land then is taken out of either
production value or recreational interest activities. Is that
why, primarily?
Mr. Maresca. That would be the impact. That would be the
impact. The point of the Regulatory Flexibility Act is not to
avoid the outcomes that another statute might require, but that
whatever regulatory option an agency considers, it considered
that with the least impact on small businesses.
Senator Gardner. Okay. Under the Regulatory Flexibility
Act, do you believe that we are right now properly evaluating
listings prior--excuse me, that we are taking actions and
considering them properly under the RFA prior to ESD listing?
Mr. Maresca. Prior to the listing?
Senator Gardner. Yes.
Mr. Maresca. Uh----
Senator Gardner. And how could we improve that process so
that Fish and Wildlife Service does this----
Mr. Maresca. We believe that post-listing, prior to the
critical habitat designation, improvements could be made.
Senator Gardner. What kind of improvements?
Mr. Maresca. Improvements in how Fish and Wildlife
considers the economic impact and takes that into account.
Senator Gardner. What would that improvement--what would
that consideration look like in how they take it into account?
Mr. Maresca. It would probably--it would--Senator, I
believe it would take a combined effort by our office and Fish
and Wildlife to come up with a system that would actually
accomplish that.
Senator Gardner. Thank you.
Thanks, Mr. Chairman.
Chairman Vitter. Thank you.
And, before we go on to our second panel, I just wanted to
follow up on Senator Markey's thoughts. Mr. Maresca, in the
Regulatory Flexibility Act, is there sort of an ``ends
justifies the means'' section that says, you know, if the rule
is really, really good, we do not have to worry about following
the law, or if we consult stakeholders in a different way, we
do not have to worry about convening this sort of panel?
Mr. Maresca. Senator, there is no exception to the
requirement of convening a panel, at least not without
consulting with the Chief Counsel for Advocacy. Under a section
of the RFA, it could be waived, but that is only under
extraordinary circumstances.
Chairman Vitter. Okay. Thank you.
Senator Shaheen, anything else?
Senator Shaheen. No further questions.
Chairman Vitter. Great. Thank you very much, Mr. Maresca.
We will move on to our second panel, and as the second
panel gets seated, I will invite Senator Ernst to recognize and
introduce Mrs. Maulsby on the second panel.
OPENING STATEMENT OF HON. JONI ERNST, A U.S. SENATOR FROM IOWA
Senator Ernst. Yes. Thank you, Mr. Chairman, very much.
As the second panel is getting settled, I will go ahead and
start off by thanking all of you for joining us here today. It
is good to have you with us.
I do appreciate your testimony and attention to this
important widespread economic and regulatory issue. The EPA's
proposed expanded definition of waters of the United States, or
as we fondly call it, WOTUS, will add unnecessary bureaucratic
red tape for our producers in the agriculture and small
business communities.
The EPA has stated that the rule has been crafted with the
intentions of creating clarity and increasing efficiency for
key stakeholders. However, in reality, the proposed rule has
only expanded confusion and uncertainty as to how far the
jurisdiction of the Clean Water Act reaches.
It is incredibly important that before this rule is
finalized, we stop it from having any negative consequences on
our producers and businesses. And, if the EPA still fails to
listen to the many voices raising concerns, including those of
many of you in this room today, then we should all come
together and oppose this rule.
Today, it is my great pleasure to introduce one of those
voices. Darcy Maulsby is a fifth-generation corn and soybean
farmer and small business owner from Lake City, Iowa. Her work,
both on the farm and in owning a communications and marketing
business, has given her a unique opportunity to engage local,
national, and world leaders to promote the benefits of
agriculture to our economy. Mrs. Maulsby has used her skills in
journalism and mass communications to reach untold audiences,
promoting the importance of improving production and
conservation practices and life in rural America.
Mrs. Maulsby, Darcy, it is always good to have a fellow
Iowan in Washington, and thank you very much for testifying
today. Your words are going to be very important for this
panel. I will not be able to stay for questions, but I will
submit those for the record.
And, just so everybody knows, they did have quite an
episode a few weeks ago with a tornado that came through Lake
City, and so, Darcy, we appreciate the extra effort that it
took for you to come and be with us today, so thank you very
much, and thanks to everybody on the panel, as well.
Thank you.
Chairman Vitter. Thank you, Senator, and let me just round
out the introductions.
Randy Noel is President of Reve Incorporated, a custom home
building company based in La Place, Louisiana.
Elizabeth Milito is Senior Executive Counsel with the
National Federation of Independent Business' Small Business
Legal Center in Washington, D.C.
And, Benjamin Bulis is President of the American Fly
Fishing Trade Association on Bozeman, Montana.
Welcome to all of you. We look forward to your testimony in
the order in which you have been introduced. Ms. Maulsby.
STATEMENT OF DARCY DOUGHERTY MAULSBY, FIFTH-GENERATION FARMER,
DOUGHERTY FARM, LAKE CITY, IA
Mrs. Maulsby. Well, good afternoon. I am Darcy Maulsby, a
fifth-generation farmer and small business owner from Lake
City. Let me begin by thanking you, Chairman Vitter, Ranking
Member Shaheen, and members of the committee for allowing me
the opportunity to share my story with you today. I especially
want to thank my home state Senator for inviting me to testify.
Thank you, Senator Ernst--even though she has left the room--
for this opportunity and the warm introduction.
Our farm is located in west central Iowa. This is a
beautiful area where the fields are mainly flat or gently
rolling and are filled with rich black soil. While this soil is
extremely productive, it also needs proper management and
drainage to protect the health of our corn and our soybean
crops.
My family and farmers all across Iowa are investing in
conservation practices that prevent nutrient runoff and
safeguard water quality. Ever since my ancestors settled in
Calhoun County in the 1880s, my family has adopted a variety of
conservation practices to protect our precious natural
resources. We have installed grass waterways to slow the flow
of water and keep soil in place. We also use conservation
tillage to leave cornstalks and soybean stubble in the fields
over the winter to protect soil from water and wind erosion and
to control surface runoff.
We have taken some big steps to implement conservation
efforts, but one thing we cannot control is Mother Nature. Just
over a week ago, on Mother's Day, an EF-1 tornado ripped
through our area. Less than an hour later, a second storm
blasted our farm with hail and dumped more than an inch-and-a-
half of rain in a matter of minutes. This created some fairly
large ponds in some of our fields, since the heavy clay soils
just could not drain that water fast enough. The ponds are
temporary, though, and they disappeared in a few days.
Across my area and much of Iowa, it is not uncommon for
puddles and ponds to appear after a heavy rain in areas that
are otherwise dry most of the year. Expanding EPA's regulatory
authority under the Clean Water Act to include these and
similar areas will have many negative consequences for my farm
business. Not only will this rule affect my operation
personally, but it will have dramatic and far-reaching
potential and costly economic implications on farmers and
ranchers all across the United States.
One of the biggest problems with this rule is the
uncertainty that it creates. I look around my family farm and I
wonder what areas would be under EPA's jurisdiction. There are
many features on farmland that contain or carry water only when
it rains. Farmers and ranchers consider these areas to be land,
not water that could be regulated by the EPA. If this agency
can regulate every body of water on my farm, including those
that are dry most of the time, then there are effectively no
limits to the agency's regulatory reach.
The regulation of these areas means that any activity,
including everyday farming activities, could be a violation of
the Clean Water Act, triggering heavy penalties, criminal
fines, and possibly resulting in jail time. Not only would we
be subject to enforcement from the EPA and the Corps, but also
civil lawsuits from those who do not understand agriculture and
belong to organizations who are opposed to our way of life.
I am also concerned about how the rule will hinder the
ability to keep our farm competitive, profitable, and
sustainable. Tens of thousands of dollars to obtain permits
along with fees for both lawyers and technical consultants is
beyond the means of most farmers and ranchers and creates an
undue burden for most farms, which are largely family owned
operations. These permits may take months to more than two
years to obtain. Having to wait to obtain a permit would hinder
our ability to operate and do what we know is best for our
land. As a result, the proposed rule puts EPA into the business
of regulating whether, when, and how a farmer's crops may be
grown and protected.
Perhaps the largest cost of this rule is not being allowed
to apply crop nutrients and crop protection products in and
around these EPA-controlled areas. We have always worked to be
good stewards of our land and want to prepare now for a
sustainable future for our farm. If we cannot do the right
things for our land and our crops when the job needs to be
done, farming and ranching will be much more costly and more
difficult.
I am also concerned about how permitting delays would hold
up conservation efforts on our farm and farms nationwide. We
have already experienced this on my farm when we applied for a
permit for a drainage improvement. In this case, the permitting
process was not completed in a timely manner due to delays from
an agency. This cost us valuable time and hindered our ability
to enhance our land, and it complicated the process of
completing routine field work.
We are continually implementing voluntary conservation
efforts using our own time, energy, and money. The only thing
that is clear and certain is that this rule will make it more
difficult for farm families like mine to make changes in the
land that will benefit the environment. Working with farmers
collaboratively is a productive way to improve water quality,
not more regulations.
Ultimately, this rule will have a negative impact on the
productivity and profitability of small farming businesses all
across the country, those one percent of Americans who grow the
food, fuel, and fiber for this country and the world.
As a fifth-generation farmer, I truly care about the legacy
my family will leave behind. I urge you to think about the
legacy that will be left behind if this harmful rule is
implemented. This rule should be repealed in full to protect
the livelihood and way of life for my family and farm families
all across this great land. Thank you.
[The prepared statement of Mrs. Maulsby follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Vitter. Thank you very much, Mrs. Maulsby.
And now, we will hear from Mr. Randy Noel. Welcome.
STATEMENT OF KARL RANDALL ``RANDY'' NOEL, PRESIDENT, REVE
INCORPORATED, LA PLACE, LOUISIANA, AND THIRD VICE CHAIRMAN,
NATIONAL ASSOCIATION OF HOME BUILDERS
Mr. Noel. Thank you, Chairman Vitter and Ranking Member
Shaheen, for the opportunity to address you today. I am a home
builder in La Place, Louisiana, which is just west of New
Orleans, and I am also the NAHB, the National Association of
Home Builders, 2015 Third Vice Chairman, and I represent about
140,000 people.
Home building is one of the most regulated activities in
the country, and as a small business owner, I can tell you from
30 years of home building experience what it will take to make
a good rule. It needs to be consistent for all the citizens. It
needs to be predictable to assure compliance. And, it needs to
be timely to serve our citizens efficiently. Most important, it
needs to focus on protecting true wetlands and streams.
The proposed rule does none of that. For decades,
landowners and regulators alike have been frustrated by
confusion over the definition of waters of the United States.
When EPA and the Army Corps of Engineers proposed this rule, we
were actually optimistic that it would finally provide clarity
and certainty. Unfortunately, the proposed rule falls far short
of that. In a word, it is a mess.
Instead of clarity, it provides broader definitions of
existing regulatory categories, such as tributaries, and it
seeks to regulate new areas that are not currently federally
regulated, such as adjacent non-wetlands, riparian areas, flood
plains, and other waters. It appears that the agencies have
intentionally created overly broad terms so that they would
have the authority to interpret them any way they would like.
This rule is so extreme that the federal government would
actually regulate roadside ditches, or water features that may
flow only after a heavy rainfall. This rule would leave me
playing a guessing game of whether my land requires a permit or
not. That does not work.
I am a small business owner. I need to know the rules, not
have to guess at them. And, because of the vague definitions,
builders would face new, costly delays just waiting for the
agencies to determine if a roadside ditch is a water of the
United States.
My business has already been a victim of a costly
permitting system. I have been forced to walk away from
building projects due to excessive permitting and mitigation
costs. The only winners with the proposed rule would be
lawyers, because this rule would certainly lead to increased
litigation.
I think it is important to note that this proposed rule
also destroys a key component of the Clean Water Act. The Act
intended to create a partnership between the federal agencies
and state governments to protect our nation's water resources.
Congress correctly recognized that there is a point where
federal authority ends and state authority begins. The
agencies' solution is to federalize nearly every water feature.
States have effectively regulated their own waters and
wetlands for years. My home State of Louisiana is a perfect
example of a state that has gone to great lengths in order to
protect its waters. Louisiana already has multiple laws on the
books designed to protect our state water resources.
The agencies also failed to consider the rule's impact on
small businesses by ignoring, as you pointed out earlier, the
Regulatory Flexibility Act. Since the agencies failed to
convene a small business panel, it is clear that they are not
interested in hearing from small businesses like mine.
Unfortunately, the EPA completely ignores RFA requirements
all the time. This is not something unique to this particular
rule. In the 19 years since the small business panel
requirement has existed, the EPA has convened approximately 47
panels. Just last year, the EPA reviewed 51 significant rules.
It defies belief that in one year, EPA reviewed more
regulations than the total number of SBREFA panels held over 19
years. This illustrates how reluctant some agencies are to
comply with the law.
And, the agencies' economic analysis of the proposed rule
is so full of errors that one noted economist said the study
was virtually meaningless. That should give us all pause.
I called this a mess, and it is, but we can start to fix
the mess. The EPA should withdraw the economic analysis and
prepare a more thorough and accurate analysis. The RFA's legal
requirements should be followed. And, any final rule should
provide easily understood definitions and preserve the
partnership between all levels of government.
Let us get the agencies to withdraw the rule. Fix this
mess. Provide the clarity we all need on what constitutes a
water of the United States.
Thank you again for the opportunity to testify.
[The prepared statement of Mr. Noel follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Vitter. Thank you very much, Mr. Noel.
Now, we will hear from Elizabeth Milito with NFIB. Welcome.
STATEMENT OF ELIZABETH MILITO, SENIOR EXECUTIVE COUNSEL,
NATIONAL FEDERATION OF INDEPENDENT BUSINESS
Ms. Milito. Thank you very much, Chairman Vitter and
Ranking Member Shaheen, for inviting me to participate in the
hearing today.
The National Federation of Independent Business is very
appreciative of the committee's interest in this rule and your
examination of what we believe was a failure by two federal
agencies to comply with the Regulatory Flexibility Act. I would
like to commend the work that SBA's Office of Advocacy has done
on this rule and I would also like to especially thank Mrs.
Maulsby and Mr. Noel for coming here and making the trip here
to Washington to testify today.
The agencies have proposed to change the Clean Water Act's
definition for waters of the United States. Though
traditionally limited to navigable waters and adjacent waters,
this new proposal would classify land as waters of the United
States if, at any point during the year, they have any water
overflow. The new rule would bring seasonal streams, ponds,
ditches, depressions in fields, and large puddles into the
Clean Water Act's jurisdiction.
What does this mean for a small business owner? Well, if
EPA and the Army Corps assert jurisdiction over your land, it
will be essentially impossible, or at least tremendously
expensive, to do anything with your land. This means you will
not be allowed to alter land formations, which prevents land
owners from digging or excavating on their properties or even
laying gravel.
While it is possible to obtain a special permit to begin
using portions of land covered by the Clean Water Act, these
permits are extremely expensive. Clean Water Act permits can
cost tens of thousands of dollars, if not more. A major U.S.
Supreme Court decision from 2006 cited the average cost at
$270,000. And, there are inevitably long waits for permit
processing with no guarantee that your permit will be approved.
But, proceeding without a permit could be ruinous. The
penalties for violations of the Clean Water Act can be up to
$37,500 per day.
NFIB and other small business stakeholders firmly believe
that the agencies did not adequately consider the impact of
this proposed rule on small businesses and, therefore, failed
to meet their legal obligations under the RFA.
EPA and the Corps is alleging that since there is a simple
definition change, there are no major costs directly imposed on
small businesses. But, as I have already noted, there are
certainly costs directly imposed on small businesses through
the permit process and other compliance requirements. In
addition, the proposed rule makes it clear that many waters
will need to be determined on a case-by-case basis, therefore
providing little, if any, additional certainty. While
multinational corporations with tremendous capital resources
can obviously afford the permitting costs, most small
businesses cannot. Usually, their only option is to swallow
their losses and forego any development plans.
In addition to the direct economic consequences on small
businesses, the proposed rule will also have indirect adverse
impacts on firms. Even in the absence of an affirmative
assertion of Clean Water Act jurisdiction, landowners are going
to be more hesitant to engage in development projects or make
other economically beneficial uses of their property if the
proposed rule is allowed.
Landowners are aware that federal agencies have taken an
aggressive posture in making jurisdictional assertions in
recent years. NFIB already receives questions and concerns from
small business owners who are worried about whether or not the
agencies have jurisdiction over their land, and we expect to
hear from many more concerned individuals if the rule is
finalized. Indeed, under the proposed rule, a landowner may
have legitimate cause for concern if at any point during the
year, as Mrs. Maulsby indicated, any amount of water rests or
flows over a property.
And, contrary to the agency's assertions, the proposed rule
will do little or nothing to make Clean Water Act jurisdiction
clearer or more certain for property owners. The reality is
that landowners will have to seek out experts and legal
counsel, which gets costly very quickly, before developing on
any segment of land that occasionally has water overflow. And,
the only way to have real clarity is to seek a formal
jurisdictional determination from the agencies, which is going
to cost even more money and lead to even more delays, delays
which might cause a bank to pull financing on a project.
In short, this proposed rule will be a boon for
environmental consultants, and potentially lawyers, too, but it
is going to be a bust for small businesses.
In closing, I would like to underscore NFIB's frustration
with the agencies' disregard for their statutory obligation
under the RFA. We believe the agencies should acknowledge that
the proposed rule will have a significant economic impact on a
substantial number of small businesses. Withdraw the proposed
rule and propose a new rule only after they have performed an
initial Regulatory Flexibility Act analysis and convened a
Small Business Advocacy Review Panel.
Thank you again for the opportunity today. We remain eager
to work with members of the committee on this issue. Thank you.
[The prepared statement of Ms. Milito follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Vitter. Thank you, Ms. Milito.
And now, we will hear from Benjamin Bulis with the American
Fly Fishing Trade Association. Welcome.
STATEMENT OF BENJAMIN BULIS, PRESIDENT, AMERICAN FLY FISHING
TRADE ASSOCIATION
Mr. Bulis. Thank you. Good afternoon, Mr. Chairman and
members of the subcommittee. I appreciate the opportunity to
provide testimony in support of the Clean Water Act today.
I had the good fortune to be born and raised in the
beautiful State of New Hampshire. I personally have fished in
the United States and around the world, but the rivers and
streams of New Hampshire will always stay close to my heart.
Now, I have the great fortune to live in Bozeman, Montana,
which one could argue is the epicenter of the fly fishing
industry.
AFFTA represents the business of fly fishing, which
includes manufacturers, retailers, outfitters, and guides
across the nation who all share the same bottom line,
furthering the sport and industry of fly fishing. This cannot
be accomplished without clean water and vibrant fisheries
habitat. The formula that drives AFFTA is very simple. Access
to healthy habitat creates recreational opportunity that drives
economic activities and jobs.
Our industry provides the waders, rods, guides, and boats
that 47 million sportsmen and women utilize every time they
step foot in their favorite piece of water. Their quality of
experience, and, thus, our return sales to enhance those days,
is dependent on access to clean water.
I am here to express our support for the Army Corps of
Engineers and the Environmental Protection Agency's efforts to
restore protections for our nation's headwaters, streams, and
wetlands under the Clean Water Act. Simply put, the draft clean
water rule is well crafted and appropriate. It should be
allowed to move through the federal rulemaking process with the
support of Congress, and here is why.
The small waters to which this important draft rule applies
are the lifeblood for many of our country's prized fisheries.
The health of these headwaters sets the tone and benefits for
all waters downstream, supporting and creating even the
backbone of our nation's marine resources. They flow into
rivers, streams, and lakes that provide the foundation of our
industry, thus eventually concluding the voyage in our oceans.
Our industry's viability depends on intact watersheds, cold,
clean rivers and streams, and healthy, fishable habitat.
Given that fishing in America supports approximately
828,000 jobs, results in nearly $50 billion annually in retail
sales, and has an economic impact of about $115 billion every
year, it stands to reason that the health of our nation's
waters is vital to the continued success of our industry and to
the health of America's economy.
We urge you to allow the rulemaking process to continue
unimpeded. Carefully review the final rule when it comes out
and then determine what, if any, legislative action is
warranted.
We owe it to the more than one million Americans who took
the time to comment on the proposal to allow the process to
reach a conclusion. More than 80 percent of those who commented
on the proposal were in favor of it. Such strong support for
clean water and healthy watersheds is what our members
experience every day as we interact with our customers across
the nation.
If we fail to protect our headwaters, streams, and
wetlands, we may destroy the $200 billion annual economy of the
hunting and fishing industry, as well as put 1.5 million people
out of work. Of those 1.5 million jobs, many are located in
rural areas with limited economic opportunity and few other
employment options.
In recent years, participation in fly fishing has grown. We
are seeing robust interest in our sport and it is translating
to our sales, to the numbers of employees we hire right here in
America, and to the health of brick-and-mortar retailers all
over the country.
The fly fishing industry is the epitome of small business.
The sustainable domestic industry is dependent on clean,
fishable water.
And, again, on behalf of my Association and our members, I
appreciate the opportunity to testify today, and I would also
like to thank the committee and staff for their dedication to
our nation. Thank you.
[The prepared statement of Mr. Bulis follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Vitter. Thank you all very much. We will now go to
questions.
Let me start by asking each of you to respond, but as
concisely as you can, and the question is this, not whether you
are in favor of clean water, not whether you think the proposed
rule is a good one, but whether you think the proposed rule
would have a significant impact on a substantial number of
small businesses, which is the small business issue we are
talking about in terms of following the law. Could each of you
respond, what you think about that.
Mrs. Maulsby. Yes. From the farmers' standpoint, it would
have a huge impact on not just my farm and farms across Iowa,
but farms and ranches across the whole country. It is a very
serious issue that we are all very concerned about.
Chairman Vitter. Okay. Mr. Noel.
Mr. Noel. Absolutely. We drain our neighborhood sometimes
with roadside ditches and we have to put driveways over them.
If we are forced to go get permits to put driveways in, it will
obviously slow down the production of homes and houses for
people.
Chairman Vitter. All right. Ms. Milito.
Ms. Milito. And, yes, I would agree that it will have a
substantial impact, and I think the agencies' own
administrative record also shows that it will, too. I mean, it
is going to increase jurisdiction of the Clean Water Act by
about three percent.
Chairman Vitter. Okay. Mr. Bulis.
Mr. Bulis. Yes. I think without this rule, it will have a
significant impact on our industry. As I said, the 1.5 million
jobs that are associated with the hunting and fishing industry,
those could be at jeopardy.
Chairman Vitter. Okay. I appreciate your answer to a
different question, but let me restate my question. Do you
think this proposed rule will have a significant impact on a
substantial number of small businesses?
Mr. Bulis. You know, I cannot speak for these other
businesses. I can only speak for the fly fishing industry, and
I am not sure how they would affect their businesses.
Chairman Vitter. Okay. Ms. Maulsby, in general, how do you
think the agricultural community has been engaged and their
concerns have been incorporated into the substance of the
proposed rule?
Mrs. Maulsby. One thing that we were disappointed about was
that there were no hearings held in Iowa, and we would--just
like Senator Ernst said, we would love to have EPA come out,
and lawmakers, too. Our farms are open for tours. We would love
to have people come out and see what we are doing on our land
for conservation, the steps we are taking to keep the land more
sustainable, and it is not just me. I have got lots of friends
and neighbors that feel the same way. So, we would love to have
people come out and actually see what is going on with
conservation on the ground.
Chairman Vitter. Okay. Mrs. Maulsby and Mr. Noel, let me
ask you this. You all have brought up situations like temporary
standing water ponds and roadside ditches and small amounts of
water that driveways may go over, drainage ditches. Now, I know
in a lot of these meetings and conversations, EPA and the Corps
say, oh, no, no, no. We are not talking about that. Is there
anything we can point to and read in the proposed rule that
makes that very clear?
Mrs. Maulsby. No. That is the confusion. That is the
uncertainty. There are no clear-cut answers to that type of
information, and it is just that uncertainty that is so
detrimental to the farm community and one of the things we are
very concerned about with this proposed rule.
Chairman Vitter. Mr. Noel.
Mr. Noel. Yes, Senator Vitter. It is disconcerting when you
ask the Army Corps of Engineers to come out and give you a
determination, and they are on a sugarcane farm where they have
rows, and they are low between, right, and that tells me that
that is wetlands, jurisdictional. And, then another Army Corps
of Engineers comes out to make a determination and does not say
it is. So, there is--you cannot plan to do developments and
homes, et cetera, based on how this rule is written. You will
have to hire a consultant. You will have to have the Corps come
out and make a determination, and it delays everything----
Chairman Vitter. And, that determination----
Mr. Noel [continuing]. Years.
Chairman Vitter [continuing]. Could be different every
time.
Mr. Noel. Absolutely, and it just--there is no way to run a
small business not knowing what the rules are.
Chairman Vitter. Right.
Mrs. Maulsby. Senator, I would add, too, that timing is
everything in agriculture, and if you do not have the answers
you need, your pests can get out of control quickly, your crop
can be torn out right from under you if things cannot happen in
a timely manner.
Chairman Vitter. Sure.
Mrs. Maulsby. So, it is a very big issue.
Chairman Vitter. Okay. And, Ms. Milito, let me ask you. If
an RFA process had been used, what could that have done
positively in terms of avoiding some of these concerns?
Ms. Milito. I think the consideration of less costly
alternatives is the most important thing that the RFA process
does and can do, as Mr. Maresca hit on. Thank you.
Chairman Vitter. Okay. Thank you very much.
I will turn to Senator Shaheen.
Senator Shaheen. Thank you, Mr. Chairman, and thank you all
very much for being here. Your testimony was very helpful.
And, Mr. Bulis, I did not know until we got your biography
that you are a New Hampshire native, and I appreciate your
talking about fly fishing in New Hampshire. We think we have
some great spots to do that. And, obviously, the outdoor
industry is a very big economic contributor, not just to New
Hampshire and Montana, but to the entire country. And, so,
making sure that we have clean water that benefits everyone is
very important.
And, I am sure that all of you would agree with that. So,
just to be clear, I do not assume that anybody here is
suggesting that we should repeal the Clean Water Act. That is
not what the concern is.
So, let me go back. I thought, Mr. Noel, you were very
helpful in terms of talking about the kinds of rules that would
be helpful in providing some certainty for small businesses. As
we all know, this is a proposed rule. It has not been finalized
yet. And, so, in thinking about not just the process that was
followed--I appreciate the concerns that have been raised about
that, and I share some of those--but also in terms of trying to
do a final rule that would provide more certainty for
businesses, more understanding and clarity for businesses,
would you talk a little bit more about that, Mr. Noel, and what
you would like to see?
Mr. Noel. Certainly. You know, there was not very much
clarity before.
Senator Shaheen. Right, which is part of the problem.
Mr. Noel. Which is part of the problem. And, in the effort
to clarify, they have grossly expanded it to cover areas that
were, in our estimation, not determined to be waters of the
United States, certainly like roadside ditches or ponds,
temporary ponds.
You know, with the work toward trying to come up with some
very clear definitions, I mean, there was plant life, there was
water on the soil, et cetera, that kind of led us in a
direction to help do that. We thought they would be a little
more specific for that as opposed to the rule that came out
that said, basically, call us if you own a piece of land and we
will tell you whether it is wetlands or not, based on whoever
shows up that day.
They need to define it in a way that any citizen that reads
the rule can walk out there and say, yes, this is definitely
wetlands. Where I live, it is clear what wetlands look like
because we are surrounded by them in New Orleans and the South
Louisiana area. But, the roadside ditches, flood plains, which
we are also dealing with an Executive Order that expands the
flood plains. And, so, it makes it very difficult to decide to
buy a piece of land and develop when you have no idea what it
is going to cost you to mitigate it, and the mitigation costs
are not in the economic analysis, are significant.
Senator Shaheen. And, Ms. Milito, can you share your
thoughts about what would be helpful to small businesses in
looking at any final rule and how, short of repealing what is
being proposed, what would be helpful to small businesses in
providing clarity?
Ms. Milito. I think--Senator, thank you for the question,
too, and going back to your point, too, about the Clean Water
Act itself, yes, I am not here to say that members of NFIB do
not like clean water. What they do not like, and what we do not
like about this rule in particular, is the agencies', what I
would say is kind of flagrant disregard for another law,
another federal law, the Regulatory Flexibility Act, and what
that law encompasses, and particularly the Small Business
Advocacy Review Panel and the opportunity for the two agencies
to hear from business owners, like Mr. Noel and like Mrs.
Maulsby, in a very thoughtful and methodical way. So, not a big
open forum where you have 100 business owners, but to hear
specific, industry-specific things. So, to hear from the home
builders with specific proposals.
Senator Shaheen. And, I am not debating the process----
Ms. Milito. Yes.
Senator Shaheen [continuing]. And how that worked. I am
trying to get a better sense from you of what you would like to
see in terms of a final rule that would provide more clarity
for businesses.
Ms. Milito. And the jurisdictional issue, which NFIB
addressed in a letter to the agency, too, which I would be very
happy to provide the committee in addition to a separate letter
we did on the RFA, I would be happy to do that, too. But, I
will just----
Senator Shaheen. That would be very----
Ms. Milito. Yes, absolutely. That might be----
Senator Shaheen [continuing]. Very appreciated, if you
would----
Ms. Milito. Yes.
Senator Shaheen [continuing]. Share that, and I am sure the
Chairman will share that with the members.
Ms. Milito. Yes. Yes. Absolutely.
Chairman Vitter. Sure. Absolutely. Without objection.
[The information of Ms. Milito appears in the Appendix on
page 66.]
Ms. Milito. And, just going back, too, that we do feel,
overall, there was an over-reach and going beyond what Congress
intended with the Clean Water Act as far as what the agency's
authority is.
Senator Shaheen. So, your objection is really the proposed
rule. It is not that it does not provide clarity, it is more
that you think it expands what is under existing law and that--
--
Ms. Milito. That is part of----
Senator Shaheen [continuing]. NFIB does not like that.
Ms. Milito. Our objection is partly with regards to the
jurisdictional issue, but also with regards to the RFA
analysis, or lack thereof, that was done by the agencies.
Senator Shaheen. Okay. Thank you.
Ms. Milito. Thank you.
Senator Shaheen. That is helpful.
And, Mr. Bulis, I am actually out of time, but I just
wanted to give you the opportunity to comment. I assume--you
talked very eloquently about the importance of our streams and
rivers and to the outdoor industry. I assume that there are--we
can continue to protect those waters and still come up with
some rule that would do that, that could provide some clarity.
Have you discussed that within your association and does that
seem like something that is reasonable to expect?
Mr. Bulis. Yes. I mean, we have discussed it, and I think
the biggest thing we need to come up with is a balance, is a
fair balance, where the--you know, we do not put our
environment at risk, but we also do not put small business at
risk. I think that is the most important thing.
Senator Shaheen. That is a very good way to say it. Thank
you. Thank you all.
Chairman Vitter. Thank you. Absolutely.
Senator Fischer.
Senator Fischer. Thank you, Mr. Chairman, and welcome to
all of you. It is such a pleasure to have you here today.
Earlier this year, I was able to chair a field hearing in
the State of Nebraska, in Lincoln, Nebraska, on waters of the
U.S. and the impact on every Nebraskan that those proposed
rules will have. We were very fortunate on one of the panels to
have a home builder from the State of Nebraska, and he made a
comment, Mr. Noel, that really brought this home to me, and,
again, the impact that it has.
In Nebraska, we have a broad, broad coalition of
organizations, of people who are very, very concerned about the
impact of these regulations, and I always smile and say, as a
rancher, it is the usual suspects, people in agriculture who
have deep concerns, but it is also home builders. It is cities,
it is counties, the cost to taxpayers that these proposed rules
are going to have. It is our natural resources districts, all
of these folks have come together in opposition--in opposition
to this overreach, I believe, by the federal government.
But, the home builders said that, right now, 25 percent of
the current cost of a new home is due to current regulations.
That puts an American dream out of reach for most Americans.
You know, it is an American dream to purchase a home, and we
already are looking at 25 percent of the cost being due to
regulations. What is going to be the impact of these proposed
rules and more and more and more coming down from the federal
government?
Mr. Noel. Well, great question. We struggle now to get an
entry home built for a first-time homebuyer because of the
regulations that we deal with, and, you know, they come from a
multitude of areas--local government, state government, and
certainly federal government.
If any--if this rule was to go into effect and we had to
spend additional money to get jurisdictional issues taken care
of, it surely would put the first-time buyer out of reach of a
single-family home because of the----
Senator Fischer. Yes. We are seeing more apartments built
than homes.
Mr. Noel. Right.
Senator Fischer. You know, so we see the effect, I think,
of regulations right now. But, that, to me, was very telling.
Mr. Noel. Well, and home ownership has so many benefits to
the community----
Senator Fischer. Yes.
Mr. Noel [continuing]. And to the American society, that to
become a renter nation would not be what I think is in the best
interest of the folks here.
Senator Fischer. I agree.
And, Mr. Bulis, when you talk about fly fishing, my brother
was an avid fly fisherman. I am the Vice Chair of the
Sportsman's Caucus here in the Senate. I happen to live in an
area with pristine fly fishing, so it is not all in Montana or
in New Hampshire. We have that in Nebraska, as well.
But, I believe that current regulations that we have in
place seem to be doing the job. That is why we have these
pristine areas. It has been said earlier, no-one wants to
change the strides that we have made under the Clean Water Act.
I think what many of us are concerned about is just the
overreach that we see here.
And, when you mentioned the comments that had been received
by the EPA, about a million comments, 58 percent of those
comments, the substantive comments that were made, were opposed
to the rule, and that comes from the EPA's own numbers. So, as
people really drilled down on these proposed rules, they did
have deep concerns with it.
But, I guess, I would ask you, do you believe it is
necessary that we continue to have those partnerships between
the states and the federal government when we look at water
quality and our water resources? You know, the Nebraska
Department of Environmental Quality implements EPA rules now.
That is a responsibility we have. And, I would also note that
the water in Nebraska belongs to the people of Nebraska. It is
a state resource. It is not a federal resource. It is a state
resource. And, I think we manage it well. We manage it
responsibly. I have a concern about that partnership and what
would happen in the future and I just would like your views on
that.
Mr. Bulis. You have the concern with the federal government
and the state partnership?
Senator Fischer. Yes. Yes. In the future, if the rules with
waters of the U.S. go forward.
Mr. Bulis. I guess it is hard for me to comment on your
particular state, but there are places across our country where
we have some really bad water quality issues, Florida being one
of them, from Lake Okeechobee discharges that are coming out of
the Caloosahatchee and the Indian River lagoon, where we have
members in those areas that, when the effluent water comes out
of Lake Okeechobee, they have these huge blooms of algae that
form, and there are signs that go up, do not touch the fish, do
not go in the water.
I mean, we have places in Chesapeake Bay where a large, or
one of the contributing factors to the decline of striped bass
is because of the forage fish that are not living in those
areas anymore because of the water quality.
You know, in the Gulf Coast, there are places that are
coming from the Mississippi River with the effluence that is
coming off and creating dead zones.
So, I think that there is a real good--there has got to be
a way that the states and the federal government work together
to make sure that the water is the cleanest it possibly can be
for our people and our environment and the businesses.
Senator Fischer. And I appreciated your comments about
striking a balance. Obviously, I believe in a more limited
federal government, and I believe that a balance is necessary,
and especially for our small businesses and our taxpayers and
the burdens that we are going to see on taxpayers with these
regulations. So, thank you. Thank you----
Mr. Bulis. I agree with you, and I believe in the limited
government reach, as well. I mean, in the State of Montana we
had a reasonable and prudent speed limit, and now that is gone
because of government.
Senator Fischer. Thank you.
Chairman Vitter. Thank you all very much. We really
appreciate your being here. We really appreciate your
testimony.
As I mentioned, I will be following up on this issue with a
resolution about the EPA and the Corps, in my opinion,
flagrantly ignoring the Regulatory Flexibility Act. That Act is
really important for small business. It is one of the core
protections in the regulatory process for small business. It
should be one of the things this committee is all about. So,
following that law is really important. So, we will follow up
on that.
And, with regard to the substance of this rule, I just have
a big concern, as many of you do, that there was lack of
clarity. So, the agencies clarified all of that completely from
their point of view, because if the question is, in the future,
do the agencies have jurisdiction, the answer is going to be
yes. You do not have to finish the sentence. You do not have to
go on. You do not have to provide any details. The answer is
yes. And, then, they will decide when and how to exercise it.
Obviously, that is not clarity for you all, and I share that
concern.
Senator Shaheen, any closing thoughts?
Senator Shaheen. Just thank you all very much for being
here, and hopefully we will see a final rule that is proposed
that strikes the balance that you suggested, Mr. Bulis, between
protecting our water resources and making sure that small
businesses are not adversely--too adversely affected. Thank
you.
Chairman Vitter. Thank you very much.
With that, the hearing is adjourned.
[Whereupon, at 3:26 p.m., the committee was adjourned.]
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