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PLEASE NOTE: The following transcript is a portion of the official hearing record of the Committee on Transportation and Infrastructure. Additional material pertinent to this transcript may be found on the web site of the Committee at [http://www.house.gov/transportation]. Complete hearing records are available for review at the Committee offices and also may be purchased at the U.S. Government Printing Office.

CLEAN WATER ACT REAUTHORIZATION: STATE AND LOCAL PERSPECTIVES

THURSDAY, FEBRUARY 9, 1995

House of Representatives,

Subcommittee on Water Resources and Environment,

Committee on Transportation and Infrastructure,

Washington, DC.

    The subcommittee met, pursuant to call, at 10:05 a.m., in Room 2167, Rayburn House Office Building, Hon. Sherwood L. Boehlert (chairman of the subcommittee) presiding.

    Mr. BOEHLERT. The committee will come to order.

    Good morning, it is my pleasure to welcome you all here to the first of six hearings this subcommittee will be holding on the reauthorization of the Clean Water Act. This is a time where contracts these days are popular, so let me share with you the contract this subcommittee has.
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    There will be a Clean Water Act reauthorization package this year. Today's witnesses will touch upon the many successes the Clean Water Act has provided since 1972, and explain the new direction that the Act must take to continue to meet our Nation's clean water needs.

    Those responsible for implementing the Clean Water Act, many of whom will testify today, deserve a great deal of credit for the significant improvements in water quality that have been made over the past two decades. However, there is still a great deal to be done to protect our Nation's most valuable natural resource: Water.

    As we will hear repeatedly in testimony today, we must begin to focus our limited resources on the problem of nonpoint source pollution. Today, well over half of the stream and lake impairments that exist in America are the result of nonpoint source pollution.

    Over the last 20 years, the Federal Government has provided over $60 billion to address point sources of pollution, but during this same period, less than $1 billion has been spent on addressing nonpoint source pollution. This equation must change.

    We must begin providing farmers and others in rural America with the resources needed to control nonpoint source pollution. The focus of the Clean Water Act must shift from ratcheting down on point sources, to providing resources for the control of nonpoint source pollution. We can clearly get the greatest bang for our buck by addressing nonpoint source pollution.

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    I am convinced that the past and future successes of our Nation are directly linked to our rich endowment of clean water. The Great Lakes alone contain over 20 percent of the world's freshwater supply. For this reason, I remain committed to the continued funding of the State Revolving Fund and will fight to secure the highest levels of funding that can be defended in these fiscally austere times.

    With clean water infrastructure needs of $136 billion over the next 20 years, the Federal Government must continue to support the State Revolving Fund. The issue of wetlands protection must and will be addressed by this subcommittee.

    My good friends Jimmy Hayes of Louisiana, who also serves with me on the Science Committee, and I have differing views on what is the most effective way to protect wetlands. But we are in lock-step agreement on the need to expedite the wetlands permitting process administered by the Corps of Engineers.

    No citizen of this country should have to wait two or three years for the U.S. Government to issue a permit for wetlands development. And as a matter of fact, I might add, parenthetically, a lot of people would breathe a sigh of relief if they only had to wait two or three years. Unfortunately, in too many instances, they have to wait even longer.

    I look forward to working with my colleagues on both sides of the aisle to craft a Clean Water Act reauthorization package that we can all be proud of. The American people are committed to the protection of clean water, but they want it done in a manner that is responsible and responsive to the actual problems out there.

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    Now, it is my pleasure to welcome the Ranking Member of the full committee, our former Chairman, my good friend and colleague with whom I have enjoyed a very close working relationship over the years, Mr. Mineta.

    Mr. MINETA. Thank you very much, Mr. Chairman.

    I want to thank you for your past leadership and your continued leadership on the whole issue of those items that are in the jurisdiction of the Subcommittee on Water Resources and Environment, and especially as it relates to the Federal Water Pollution Control Act.

    I am pleased that we are now beginning our efforts to reauthorize the Clean Water Act in the 104th Congress. While I believe that the Clean Water Act has truly been one of the success stories of the past 20 years, I also believe that we must not rest upon our laurels. Clearly, the American public expects us to fulfill our promise and assure waters which are fishable and swimmable.

    We have made great strides in controlling the traditional sources of pollution, namely, the point sources, but, unfortunately, the States have reported that only about one-half of the waters of the United States are attaining their water quality standards.

    So we must now address the sources of the remaining pollution, namely, nonpoint storm water and combined sewer overflows, unlike the past 20 years, where we have used technology-based controls on industrial and municipal point sources, addressing wet weather pollution will require new and innovative approaches.
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    Over the past two years, we have been pursuing such approaches in the control of combined sewers. EPA and interested parties successfully negotiated a revised CSO policy to recognize the flexibility needed by communities to address combined sewers. I supported the process which gave rise to the policy, as well as the policy itself.

    In the area of storm water, cities need to have adequate time to develop methods to control pollution without the fear of end-of-pipe treatment requirements. And for nonpoint sources, we must ensure the primacy of States and local governments in addressing nonpoint sources through the use of flexible management measures instead of technology-based requirements.

    I have been working for two years to see these goals accomplished, with my very good friend, Mr. Boehlert, and will continue to do so as this bill moves forward. I will also work to see that we do not undo any of the protections which are necessary for the environment.

    Now, while we should examine how the programs are implemented and avoid unnecessary regulation and burdens, we cannot abandon the natural resources, the resources which are at the heart of the economic success of this great Nation, for short-term economic gains.

    So, Mr. Chairman, as we begin our review of the Clean Water Act, I would like to remind all of my colleagues of an old Native American saying that says: We do not inherit this land from our fathers, we borrow it from our children.

    Thank you very much, Mr. Chairman.
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    Mr. BOEHLERT. Thank you very much, Mr. Mineta.

    And I would like to acknowledge the presence of the Chairman of the full committee, which indicates his deep personal interest in this matter, Mr. Shuster of Pennsylvania.

    Mr. SHUSTER. Thank you, Mr. Chairman.

    No opening statement.

    [Mr. Borski's and Mr. Costello's prepared statements follow:]

    [Insert here.]

    Mr. BOEHLERT. Now, this subcommittee, it is the first time in 40 years that we have been in charge. It is the first time I have been a Chairman. So let me tell you a couple of things we are going to do.

    We are going to try to be witness friendly and Member friendly. In terms of the witnesses and audience, we are going to spare you all the eloquent prose all our staffs are able to assemble, and we will just have opening statements from the Chair and the Ranking Member, and the Chair of the full committee, if he is in attendance and wishes to address the assembly. Then we will have our five-minute rule.

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    All the witnesses should know their statements will appear in the record in their entirety. But we ask that you try to summarize it because there is nothing as frustrating as having someone like Mr. John come from Decatur, Illinois, scheduled to be on at 10 o'clock, and find out he is on at 3 o'clock in the afternoon. So we are going to try to adhere to the schedule and a five-minute summation would be appreciated.

    And for my colleagues, and we have good attendance here, we are going to go on a first come, first serve basis. So if the most senior Member of the committee does not show up on time, the most senior Member of the committee is going to defer to the most junior Member of the committee who does show up on time. So we are going to be witness friendly and Member friendly.

    I would like to present now our colleague, Mr. Poshard, from Illinois, for an introduction of our first witness.

    Mr. POSHARD. Mr. Chairman, thank you, and to Members of the subcommittee. I want to introduce to you Stephen John, a great friend of mine. Steven is a city council member from the largest city in my district, Decatur, Illinois. He is also on the Steering Committee of the National League of Cities Energy Environment and Natural Resources Committee.

    Steven has led an effort around the Decatur area to build a cooperative effort to deal with nonpoint source pollution in the entire watershed area that serves his city. And he has done a wonderful job with that. He is one of the most prolific advocates I know of clean water. And, Stephen, I just wanted to welcome you here to the committee today.

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TESTIMONY OF STEPHEN F. JOHN, CITY COUNCIL MEMBER, DECATUR, IL, ON BEHALF OF THE NATIONAL LEAGUE OF CITIES

    Mr. JOHN. Thank you very much.

    Mr. BOEHLERT. Thank you very much.

    With that introduction, Mr. John, you should be standing at all. We look forward to hearing from you.

    Mr. JOHN. Thank you.

    Mr. Chairman——

    Mr. BOEHLERT. If you would pull the microphone closer to you, because the acoustics certainly are not the best and sometimes we have a difficult time hearing.

    Mr. JOHN. Can I be heard now?

    Mr. BOEHLERT. You can, and we want to hear what you have to say.

    Mr. JOHN. Mr. Chairman and Members of the subcommittee, I am Stephen John, Council Member from Decatur, Illinois, and I am here to testify on behalf of the National League of Cities and the 16,000 cities and towns we represent, on reauthorization of the Clean Water Act.
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    The Clean Water Act has been one of the most successful Federal environmental protection laws. This success is due in large part to the considerable financial investment that Congress, the States and local governments have made to clean up and protect our Nation's waters.

    Local officials understand very well that these improvements are paid for by our constituents through taxes and sewer use charges. Continued improvement is possible only as long as the people who pay the cost believe their money is being spent wisely.

    Unfortunately, the effect of the Act is often to force large expenditures of local tax dollars, to address relatively minor problems, while allowing more significant problems to continue unabated. NLC is not proposing to rescind current laws or cease the activities that have brought us this far but in going forward on costs, benefits, risks and financial capability must all be carefully considered. High-priority concerns should receive high-priority attention. Some other worthy objectives will have to wait.

    NLC recently developed draft statements of principles for reassessment of Federal, State and local government roles. I would like to submit these draft principles for the record to help Congress understand the perspective of local government officials.

    Today, I would like to speak to you about the existing storm water management program and the issue of watershed management and source water protection. My written remarks also address EPA's policy on combined sewer overflows and the future Federal role in financing water pollution control and prevention activities.
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    NLC's highest short-term environmental priority is to secure swift enactment of a rational solution to the current storm water management program. Under the current law, municipalities face a minimum unfunded mandate of $1 billion a year. If the current law requirement to meet numerical effluent limits is not revised, the potential expenditure facing the Nation's cities and towns could exceed $1 trillion.

    On October 1st of last year, all municipalities in the Nation became subject to a Clean Water Act mandate that requires NPDES permits for their separate storm sewers and the elimination of pollutants discharged from these sewers. The Nation's larger cities, those with populations over 100,000, have been subject to these provisions for the past several years and are experiencing unprecedented cost to accomplish a mandate that is essentially undoable.

    The average cost to these cities to obtain a permit for their separate storm sewers is $625,000 per municipality. Yet no research has been funded under the Clean Water Act to determine whether it is even possible to clean up storm water runoff enough to meet water quality standards.

    Furthermore, even if it were technically feasible, such extraordinary treatment may not be necessary to protect designated uses of receiving waters. EPA should be required to deal with the issue of establishing wet weather water quality standards before even considering the imposition of numerical effluent limits or any other enforceable performance standard on storm water discharges.

    Two weeks ago, we were notified that EPA has a plan to fix the storm water program. EPA's proposed fix is not acceptable to the National League of Cities and we believe it is of questionable legal validity. NLC urges this committee to take prompt action on a workable remedy, including at least the following components:
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    First, the elimination of, or a moratorium on, the requirement for storm water discharges in cities over 100,000 population to meet water quality standards or comply with numerical effluent limits; second, a sufficient financial Federal investment in research and demonstration projects to determine the feasibility of the cost and meeting numerical effluent limits.

    The balance of my statement, you have before you, and I would be more than happy to answer questions from the committee.

    Thank you very much.

    Mr. BOEHLERT. Mr. Mineta.

    One more observation in terms of style. We are sort of feeling our way along here. One of the great frustrations I had over the years as I moved up the chairs, was to sit at the far end of the dais and watch the Chairman dominate everything. By the time my turn came, not only did I not know the answers, I did not even know the questions. So what I will try to do is let the Members go first.

    Mr. Mineta.

    Mr. MINETA. Thank you very much, Mr. Chairman.

    On that basis, I wonder if I should yield to my colleague to my left here.
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    Mr. FILNER. I am a little further to your left.

    Mr. MINETA. No, not that far.

    Mr. BOEHLERT. As you wish.

    Mr. MINETA. Mr. John, you advocate that up to $100 million be set aside from the State Revolving Loan Fund as a Federal investment in research and demonstration projects over the next several years. I am wondering if you could give us some better idea how you would expect this program to work?

    Mr. JOHN. Well, part of that money, of course, would go for a variety of best-management practices for systematic and demonstrations and evaluation of the performance of those technologies. There are a number of best-management practices that have been tried. In most cases, they have not been systematically evaluated as to their performance.

    We make reference to some of the kinds of management practices. Certainly, street sweeping. Some of the kinds of things that are used in combined sewer overflow control are potentially applicable to separate storm water systems, and those include things like retention basins and settling basins.

    There are a variety of potential technologies for the control of pollution from separate storm sewer systems, but there has not to date been any sort of a systematic program to evaluate their effectiveness.
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    Mr. MINETA. Now, in terms of your statement, you are also advocating a more comprehensive watershed approach to pollution controls. I assume that concepts such as pollution prevention and source waters protection are consistent with your stated goals?

    Mr. JOHN. Yes, they are.

    Mr. MINETA. Do you think that the Clean Water Act should be amended to include as one of its goals, the acknowledgment that we need to protect our water resources as a suitable source of drinking water, recognizing that some treatment is likely to always be required?

    Mr. JOHN. We would agree with that. We have not taken a position endorsing. We know there are various specific proposals with regard to watershed management floating around.

    We certainly support, in principle, including provisions on watershed management and source water protection. We would like to see specific language before endorsing particular programs.

    Mr. MINETA. Do you think that it is reasonable to expect industrial dischargers to review their operations to determine whether there may be ways to reduce pollution at the source, assuming that there is no specific requirement for results?

    Mr. JOHN. Well, I am not sure I can answer that question generically. I suppose, in a broad context, our feeling is that efforts with regard to nonpoint sources should be driven by water quality objectives rather than across-the-board requirements for control of nonpoint sources—you know, national programs—that those efforts should be driven by particular needs in particular areas; and the accomplishment of water quality objectives where those are necessary and where those are affected by nonpoint source pollution.
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    Mr. MINETA. We have heard a lot of discussion about the costs associated with applying for storm water permits under Section 402. I am wondering if you would be able to explain to us what makes up some of those costs that are associated with the application.

    I think you mention something about $625,000 per city, per applicant somewhere in the—$625,000 per municipality to obtain a permit for separate storm sewers.

    I was wondering, what are some of the costs that are associated with the application?

    Mr. JOHN. Mr. Mineta, I would acknowledge that coming from a city of under 100,000, so far we have not faced that. I could submit at a later time some detailed information about what goes into that. My general understanding is that there are a number of studies to characterize the storm water discharges that go into the development of a permit application.

    [The information received follows:]

    [Insert here.]

    Mr. MINETA. That would be fine. I think the legislation that Mr. Boehlert and I had last year would have taken care of those cities under 100,000, as you mentioned earlier in your testimony.

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    Thank you very, very much, council member.

    Mr. BOEHLERT. Thank you, Mr. Mineta.

    Mr. Bateman.

    Mr. BATEMAN. Thank you, Mr. Chairman.

    And thank you Mr. John for your testimony.

    Mr. Chairman, I notice the list of witnesses is long and they are very knowledgeable, and so I am going to put myself in the listening mode, and I will yield back any time I might have.

    Mr. BOEHLERT. How very generous of you. Thank you.

    Mr. Poshard.

    Mr. POSHARD. Thank you, Mr. Chairman.

    Stephen, from your point of view, working as a city council member and in your role with the Decatur Council and your role also getting the nonpoint source pollution program going, what sort of pragmatic steps have you taken? What have you done to work on this watershed management program that we need to learn from?

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    And one other thing, just—I will just let you speak to this and will not ask any more questions. But we have a bill passing through the Congress out here now known as the unfunded mandates bill. How do you see the State Revolving Funds, and so on, relating to that?

    What do cities the size of Decatur feel when—are you getting a good deal from the Federal Government with respect to laws like the Clean Water Act and so on? Do you consider it an unfunded mandate on local governments? Can you just speak to those issues real quickly?

    Mr. JOHN. Certainly, Congressman. Decatur, during the years in which the wastewater construction grants program was in operation, did substantial upgrading of its wastewater treatment facilities and received Federal grants at the then standard rate of 75 percent Federal funding. Those projects went to completion. We considered the user charges that resulted from those to be affordable and reasonable.

    Our concern is primarily with new mandates that go beyond the point source requirements, specifically, of course, I am focusing on the storm water. With the current State Revolving Fund, the dollar amounts that are available are substantially below the needs, so there is no longer any necessary proportionality between the magnitude of the need and the magnitude of the Federal financing. But more significantly than that, the Revolving Loan Fund is a loan fund, and in the view of the National League of Cities, all a loan, which, of course, requires repayment, does not convert an unfunded mandate into a funded mandate.

    Congressman, you also asked about some of the things that we are doing, and I do appreciate the opportunity to speak to that. Decatur is a city with a large agricultural watershed. Our water supply is an impoundment of the Sangamon River. Most of the watershed is planted in row crops. We have some of the most productive farmland in the country and we have problems with sediment and nitrates.
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    The City of Decatur for 10 years, long before there were any sort of Federal requirements dealing with this, for 10 years, the city has partially funded the activity of our local soil and water conservation district. We pay the salary of a conservationist who has worked to introduce and try to spread the use of no-till farming practices within the district. We have established what I consider to be very innovative local programs entirely on our own, including risk-share programs for no-till farming to help defray any loss in yield that farmers might experience in their first season.

    Mr. POSHARD. These have been voluntary, for the most part.

    Mr. JOHN. These are entirely voluntary programs.

    Mr. POSHARD. Have you had a high rate of participation from the farm community, would you say?

    Mr. JOHN. Yes, we have. In fact, my written testimony includes an attachment with a recent news article about a program that the city, the farm community, and Dow–Elanco, a farm chemical manufacturer, have been doing to introduce the use of a product that is believed to have beneficial effects on reducing nitrates, which has been a problem for us within our watershed.

    And perhaps most importantly, we have on our own developed something that I think could be very beneficial on a broader scale, and that is a local stakeholder group that is cochaired by myself, as a city council member and a farmer from the watershed, and we are working very closely to try to improve the level of understanding and cooperation between the city and the farm community.
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    Mr. POSHARD. Thank you, sir.

    Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you.

    Mr. Wamp.

    Mr. WAMP. Thank you, Mr. Chairman.

    I am from Chattanooga, Tennessee, and grew up there and live there now, and we are doing a lot of things right relative to the environment in Chattanooga, Tennessee. But we are a city that has already complied with the Clean Water Act provisions and submitted our plan, and it caused a tremendous amount of confusion in our community when the city submitted its plan to comply with the Clean Water Act and, as I understand it all, then made the decision, the city, to impose a storm water fee, in addition to our property taxes in our city, on the users or anyone who owned property, and that created a lot of anger among the taxpayers that this was a direct a unfunded mandate from the Federal Government.

    Our mayor, took the position, in many ways, responsibly, that this needed to be done and that this was a legitimate concern. We have had an industrial past in Chattanooga, tremendous amount of discharge into our river systems. These things needed to be addressed.

    But my question to you is, as we look at a 100,000-limit in the future and moving beyond where we have been, what better ways can we move this process down to the local level in terms of compliance, in terms of reaching the voters with a message that explains how this all works?
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    The people in my city did not have a clue as to how this all was forced down from the top and they were real angry by the time it got to the bottom, and all they thought was the Federal Government sent this mandate down, totally unjustified, and we are mad and we want action and, boy, those local elected officials, they had a heck of a time explaining to the folks back home.

    Mr. JOHN. Congressman, people want to have clean water and local officials want to have clean water. I think if I can just briefly characterize our view, it is that local elected officials and local taxpayers and ratepayers are willing to pay for real visible benefits. They will fight hard to avoid having to pay for something that they cannot see; that they do not believe benefits them.

    It is certainly my view that I believe is representative of the view of the National League of Cities, that it is in the long-term best interests of environmental quality to make sure that we conform the requirements to what people really believe is the environmental need. I think there is nothing that is more likely to destroy the public's support for environmental improvements than requirements to spend money that people believe to be unnecessary.

    Mr. WAMP. Well, the follow up is that of those cities, the large cities that have already complied, what is the number one complaint that you have heard from the administrators or the elected officials in those cities, of how they actually had to respond to the requirements of the Clean Water Act? Can you be specific in what their complaints were? Did they lodge any complaints?
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    Mr. JOHN. Well, I am not sure if you are speaking generally about the Clean Water Act or specifically about the storm water.

    Mr. WAMP. Storm water, excuse me.

    Mr. JOHN. In the area of storm water, I believe when you say large cities have complied, you are talking about complying with the current requirements to submit permit applications to obtain permits.

    Mr. WAMP. Correct.

    Mr. JOHN. I do not believe you will find large cities that have complied in the sense of actually producing storm water—implementing storm water control programs, where the water that comes out of those pipes meets a numerical effluent limit. So to that extent, the great fear lingers out there that as the Act is currently written, they may have complied with the permit requirement, but they have not complied with actually purifying or treating storm water to a degree that may be required in the future. That is where there is just this vast and frightening potential for future costs that we have described in our testimony as being undoable. Nobody knows how to do that.

    Mr. WAMP. So you think this entire mandate is an qualifies as an unfunded mandate and a real hard look needs to be taken at it in the coming months?

    Mr. JOHN. We certainly do.
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    Mr. WAMP. Thanks.

    Mr. BOEHLERT. Mr. Filner.

    Mr. FILNER. Thank you, Mr. Chairman, and thank you for your new friendly policies that I hope will govern the committee.

    I am pleased to welcome you, council member. As a former city council member myself, I am sure I share a lot of the concerns that you and the members of the League of Cities have towards Federal requirements, flexibility, and changes that are needed certainly in this Act and others.

    I am sure you have heard, as we have heard, although I do not have any more details than what I have read in the paper, that Speaker Gingrich has suggested as a method of dealing with some of these problems, something he has been calling a ''Corrections Day''.

    I, for one, have some concern about that procedure. We are here today talking about necessary changes in the Clean Water Act, and I am sure this committee will recommend significant changes and move toward more flexible requirements. But that is a deliberative procedure that has gone through the committees and testimony. And the other one looks to me as though it may engender a lot of emotion, a lot of quick reactions in looking at some quick fixes that, if further deliberated, would not be the case.

    I was just wondering if the League, and you are spokesman here for the League of Cities, has looked at that situation; has made any comments about that procedure or any recommendations on how we might proceed in dealing with some of the problems that Federal legislation may get us into but should be solved in some deliberative manner.
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    Mr. JOHN. Now, are you referring, Congressman, generally to—

    Mr. FILNER. Using the Clean Water Act as one example, because the first example that the Speaker used is the problem with the Clean Water Act. He happens to be right on that problem, it concerns San Diego, which I represent, but the procedure in which I hear being formulated for changes is a little troublesome to me, and I was wondering if the League of Cities had a position on it or advice for us on that?

    Mr. JOHN. I don't think we have a general position on that. We have some fairly strongly worded views on the subject of unfunded mandates. But actually, I think you will find that if you read through the statement of principles that we have attached to my testimony, I think you will find it is relatively nuanced.

    We do recognize there is a need for national programs to meet national goals, and we understand that. I would certainly share the view that you just expressed that areas like the storm water programming, which is a major program, does require deliberation and carefully crafted legislation, rather than just this kind of a real quick and dirty fix.

    Mr. FILNER. I just hope the League will, not out of frustration with some of the problems and some of the stupidities that we sometimes see, then go the other way and say let us fix everything by the spur-of-the-moment decision, and I hope that you will help us have a more deliberative process towards making sure this Federal-local partnership is done in a rational way and we do not go to extremes in particular areas.
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    Mr. JOHN. I hope so, too, Congressman. If we were asked to provide a list of horror stories, though, we could certainly do it.

    Mr. FILNER. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you, Mr. Filner.

    Mr. LaTourette.

    Mr. LATOURETTE. Thank you, Mr. Chairman.

    Briefly, Mr. John, I just have a couple of questions. In your testimony, both written and also before the committee, you referred to effluent levels that municipalities or cities large and small will not have the ability to meet even though they have made application for the permit levels. Are there specific examples of effluents that are involved in the procedures placed as burdensome upon the cities that you can think of?

    As an example, in my neck of the woods, mercury is something that is of great concern to the municipalities in their wastewater treatment plants. Are there some substances you can pull out of the upcoming regulations that are more burdensome than others to cities?

    Mr. JOHN. Generally, there are certain common constituents in storm water runoff that simply include grit and suspended solids, various petroleum gasoline products, those kinds of things that are almost always present in some amounts in storm water runoff. More specific trace quantities of specific toxic pollutants would vary from place to place as to what causes particular problems.
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    We did make reference to the question of wet weather water quality standards. Because one of the concerns that we have is that the kind of numerical water quality standards that are appropriate generally for dry weather conditions may be unnecessarily stringent when applied to short-term episodic events like storm water runoff. So it may not actually be necessary to remove pollutants to the level required by present water quality standards in order to truly protect the designated uses of receiving waters.

    Mr. LATOURETTE. The last question I have is, one of the options that I believe that the committee has in the reauthorization is to look at delaying implementation of certain mandates and regulations. That, to me, sounds a little like procrastination in some situations.

    From the cities' perspective, would it be better to deal with the issue and say this was a bad idea and we should abandon it; if, in fact, it is a bad idea, to have set certain levels; or would the cities be more encouraged or inclined to adopt a program that delayed implementation with the hopes that someday we could meet these effluent levels?

    Mr. JOHN. Well, we have said in our testimony and it is our position that it is acceptable to us to do a moratorium on the requirements to allow time for research and development. I note that some of the other organizations that are testifying here will be expressing the position, and I think we would conceptually agree, that urban storm water is essentially a nonpoint source.

    It comes from a wide area, even though it is conveyed by a pipe, and it is very much more similar to nonpoint sources than to point sources of pollution. And in many respects, it would make more sense to deal with urban storm water under the 319 program, the nonpoint source program, and whatever future watershed management provisions may be developed.
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    Mr. LATOURETTE. Thank you very much.

    Mr. BOEHLERT. Ms. Norton.

    Ms. NORTON. Thank you very much, Mr. Chairman.

    Mr. John, I was interested in the ambivalence reflected in your testimony about block grants. In your statement, you make dear that the National League of Cities has not taken a position on all aspects of this issue. It is clear, though, that you could not support any block grant that had the effect of converting local assistance to State control.

    In our own debates on unfunded mandates, there was fairly limited discussion of the relationships between States and localities with respect to unfunded mandates. I would like you to describe what your experience has been in that regard. Then I would like you to comment on another statement in your testimony: that Congress must determine if it is willing to trust your judgment in making your own choices, about environmental goals, for example; or if such authority would wreak havoc with the Nation's environmental goals and objectives?

    There you seem to leave open the notion that there really is a national interest that has to be taken into account here and that you are not sure whether these choices, simply sending these choices out to the States and localities, will be consistent with the national environmental interest.

    I would be interested in your views on both of those issues.
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    Mr. JOHN. Thank you.

    First of all, with regard to State versus local control over block grant funds, our general view is that the States, for the most part, are in the position of administering programs, whereas the localities are actually in the position of implementing pollution control and pollution prevention measures.

    We believe that the congressional intent in providing financial assistance is to try to actually control the pollution and we believe that is where the funds should go and not have the funds simply be diverted from actual pollution control to the State level to fund program administration.

    I am afraid I am going to have to ask you to repeat the second part of the question.

    Ms. NORTON. Has it worked? Has the relationship between States and localities worked satisfactorily, as far as you are concerned?

    Mr. JOHN. Much of my experience is prior to the shift from grants to loans, and I believe that things worked quite well during the grants program. But we are not expecting a return to those days.

    The State Revolving Loan Fund, in our community, has worked well, in our State of Illinois, I believe it has been administered effectively. But, as I mention, a loan does not convert an unfunded mandate into a funded mandate, since a loan still has to be repaid.
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    I am not sure I have entirely answered your question that you were trying to ask.

    Ms. NORTON. I think you have. I am really trying to find out whether, with respect to unfunded mandates, the relationship between a locality, such as yours, and the State has been satisfactory with respect to the issues under discussion here this morning?

    Mr. JOHN. To date, it has, I would say. In the State of Illinois.

    Ms. NORTON. Then, finally, your response on what you really mean in this sentence that says Congress must determine if it is willing to trust our judgment in making such decisions or if you believe such authority will wreak havoc with the Nation's environmental goals and objectives, implying that it might.

    Mr. JOHN. That is right. The movement generally to the concept of watershed management, as I say, is something in principle we support, but, of course, the devil is in the details as to how exactly that gets done.

    If you are truly trying to address things on a watershed basis, which we think is the logical way to go, you will have to rely, I think, on the collective wisdom of local stakeholders to prioritize their problems. That may mean that some things that are Federal requirements, may get pushed off well into the future because other things are deemed to be of a higher priority.
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    So if you go with a watershed managements program that allows local stakeholders to determine how the requirements are to be met, you have to be prepared for local stakeholders to set priorities. That is what we are trying to say.

    Ms. NORTON. And perhaps, for the absence of national coordinated environmental policy or clean water policy.

    Mr. JOHN. I don't believe we have suggested that. We recognize, of course, that there is a place for national goals. One of the problems, if I may, particularly with regard to water pollution control from municipal sources and other sources, is that the problem is likely to be received by downstream communities or downstream water users. So in one sense, you may say that a community does not have a high incentive to invest in water quality improvements that benefits downstream water users. So we recognize an appropriate role for national programs.

    Ms. NORTON. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you.

    Mr. Martini.

    Mr. MARTINI. Thank you, Mr. Chairman.

    Mr. John, I guess I am just trying to clarify something for my own edification and as a former city council as well. With respect to the League of Cities' formal position, in terms of a national standard for clean water, and I understand that the States are delegated the authority to set a standard and then they have to, however, still meet the national standard, which creates problems oftentimes, I think, depending upon the region of the country and meeting those standards.
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    Is there a formal position of the League of Cities with respect to that or are they—have they adopted a position to permit more flexibility with respect to that?

    Mr. JOHN. The general procedure for establishing water quality standards is as you described it, that there are national guidance documents but then local, State—or each State adopts its own water quality standards. The particular problem we were referring to here is the general problem of what people call wet weather water quality standards. Whether the water quality standards that are adopted by the States are appropriate for application during the short-term conditions associated with rainfall events.

    So we are not really presenting particular concerns today, although, I would suspect that there may be some specific areas of concern that I am not really fully conversant with, with regard to the general framework of State-adopted water quality standards. But we are expressing strong concern about the need to develop water quality standards for wet weather conditions, which is an issue not only with separate storm water, but also with the combined sewer overflow program and nonpoint sources generally.

    Mr. MARTINI. Thank you very much.

    I yield back the balance of my time.

    Mr. BOEHLERT. Thank you.

    Mr. Oberstar.
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    Mr. OBERSTAR. Mr. Laughlin was here first, I believe.

    Mr. BOEHLERT. All right, Mr. Laughlin.

    Mr. LAUGHLIN. Thank you, Mr. Chairman.

    It is Mr. John?

    Mr. JOHN. Yes, it is.

    Mr. LAUGHLIN. I could not see your name tag from here.

    What is the population of your city, Decatur?

    Mr. JOHN. 83,885.

    Mr. LAUGHLIN. No one has moved since you left town, then?

    I want to ask you about your statement comment here on page 1, that the Clean Water Act sometimes moves beyond environmental protection to environmental perfection. I want to address my question to what you are talking about there. And, in fairness, you have to know the gentleman to your right, the Honorable Mayor of Dallas, represents one of the few large cities in my State that does not drain its sewer through my district. Because all the rest of the major rivers in Texas drain through this large rural district I represent, so I am giving you a clue where I am coming from.
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    Why is a city entitled to have purer water upstream than it has downstream? And that is where you are coming from in this statement.

    Mr. JOHN. Well, I think where we are coming from in that statement is actually referring specifically, really, to our number one concern at the moment, which is the storm water program and the requirement that the water that flows out of storm sewers meet, in all particulars, numerical effluent limits and water quality standards. That is what we feel is undoable, unnecessary, and certainly unaffordable.

    Mr. LAUGHLIN. Would you support the premise, then, that the water downstream from our cities ought to be at least as clean as it is upstream?

    Mr. JOHN. We would support the premise that where there are water quality problems that impair designated uses, whatever those are, your recreational use, et cetera, and of course, aquatic habitat uses, that those water quality problems must be addressed. Whether the water quality standards in one particular segment of a stream differ from water quality standards in another segment, is usually made on the basis of the uses, both the habitat uses and the water supply uses, recreational uses. So its hard to answer that statement generally, but we believe that water quality should be adequate to protect designated uses of streams.

    Mr. LAUGHLIN. Well, the disturbing thing to me is if you look at all the recreational advertising done by the City Chambers of Commerce, it generally is the boating, the swimming, is the recreational activities upstream from the city. That has been my experience. And then, almost typical of our cities' approaches to these problems, you want to lay all the blame on agriculture. And you have done that in the same paragraph, where you have gone on to say that this environmental perfection often forces large expenditures of local tax dollars to address relatively minor problems while allowing significant pollution problems from rural nonpoint sources.
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    Then, on the next page, you go on to talk about agriculture, silviculture, ranching and mining activities.

    What are the specific contributions to the pollution of the waterway system you are referring to that comes from agriculture?

    Mr. JOHN. In my own community, we have both sediment and nitrate problems. We are in the process of completing a $9 million dredging project funded with 90 percent with local dollars and 10 percent with State of Illinois dollars, to remove sediments that have accumulated in our lake, most of which used to be topsoil on farm fields in our watershed.

    Mr. LAUGHLIN. So that is more of an erosion problem than—

    Mr. JOHN. Yes, in terms of—

    Mr. LAUGHLIN. Than a pollution problem from the operation of an agricultural activities?

    Mr. JOHN. It is a pollution problem in that it certainly causes turbidity problems at our water treatment plant. The other particular problem that we face, and certainly there are a lot of differences around the country in different areas, we face a problem with nitrate runoff from the agricultural land and we are trying to address that.

    I believe I have tried to make an effort to not suggest that we are pitting cities against farms, because that is not our intention. We believe the problems that exist have to be addressed regardless of where they come from, and in my own city, we are trying to work cooperatively and successfully with the farm community to address the problems that we have and looking for win-win solutions.
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    Mr. LAUGHLIN. Well, I certainly hope that is the case, because often we rural areas people take it on the short end, because in your city, and certainly the Honorable Mayor from Dallas has at least five Congressmen in this capital from his city, and I represent an area that is larger than some of our State, so you can see the disparity in representation and why it is offensive to sit here and read a mayor or a city council statement that agriculture is the major contributing cause to these problems. I see the red light is on.

    If the Chairman wants you to respond, I will listen.

    Mr. BOEHLERT. Thank you.

    Mr. Gilchrest.

    Mr. GILCHREST. Thank you, Mr. Chairman.

    I didn't know it was my turn, but I think it is appropriate for me to follow up on this because I live in a district that is very rural and very urban. I have the Eastern Shore of Maryland, which is rural, and I have part of Baltimore City and a lot of suburbs in-between. So we have a lot of these conflicting issues, and I certainly have some sense of the problems with combined storm water runoff with sewage runoff and all of the problems that creates for water quality.

    Mr. John, you made a comment a little bit earlier about—I am not sure if I heard it but I think it was in your testimony—about the Clean Water Act being pretty successful as far as recognizing point source pollution, but we have to be careful about the technology to get rid of the contaminants because the technology to detect the contaminants is better than what would get rid of the contaminants and how costly it is, and we have to set priorities and do what we can afford, but making sure there is clean water.
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    To sort of follow up on the gentleman from Texas, and to make a comment in regard to that, with the idea of watershed management. As soon as you start talking about watershed management, which seems to me to be the logical way to look at water problems, because you have groundwater that travels hundreds if not thousands of miles, if we are going to create legislation that is appropriate to deal with the problems of water, and we must, I think, approach it from a watershed management perspective, then we are going to find problems with interstate cooperation, not to mention cooperation between the rural areas and the urban areas of the same State. But interstate cooperation.

    That also means that in many areas, especially if you happen to be downstream, there is going to have to be some sense of what type of wetland we need to protect and that is going to involve property rights. We need to understand where farming comes from, where mining comes from, where ranching comes from.

    Also, we have to understand and project where we are going to put our landfills, where are we going to put our rubble fills, how will more development impact the water. Everything we do it seems to me on the land has some impact on the water on the land.

    So we have all these problems we have to try to solve in the reauthorization of the Clean Water Act. I guess this is a quasi-philosophical question. If you have any ideas about prioritizing, the idea that we need to preserve the quality of the water and we are going to have to address property rights and we will have to address wetlands, we will have to address farm runoff and nonpoint source pollution and those kinds of things, we need to organize our thoughts on how we are going to do that.
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    It seems to me that on one hand, you have the issue of property rights; on another hand, you have the issue of economic opportunity, because maybe on your wetland you want to build a hotel or a housing development, but downstream in Craig's district, he might have a problem with the quality of the runoff that is hitting the rivers that he taps for drinking water. So we have property rights, we have watershed management, we have economic development, we have where to put landfills and we have something that is not quite taken seriously enough, I don't think, up here, and that is the science of all of this.

    You mentioned the problem of the water in the river with the turbidity of it and what happens in your system to clean that out, and the nutrient content. So each of these areas will have to be addressed in perhaps a unique fashion because now we have more people in this country in the cities, in the rural areas, than we did when we first established the Constitution.

    There were three million people in 1790; 76 million in 1890; 260 million people in 1990. What is it going to be in 2090, which is relatively right around the corner? So all these very complex issues.

    Do we deal with them politically, do we deal with them scientifically? Have we reached the point where we need to manage our growth and have a new ethic about what is private property and how can we provide incentives?

    I didn't mean to talk so long, Mr. Chairman. I really apologize. I just got going there.
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    Anyway, could you respond to that rather ambiguous, philosophical comment?

    Mr. JOHN. Interestingly enough, I would be happy to because you reminded me of something I am glad to have an opportunity to mention.

    Nobody is suggesting it will be easy. I am suggesting it is more likely to be successful if a lot of the decisions are made by local stakeholders, using their best efforts to work together locally. We understand very well that the farm economy and the economy of our city are very closely linked. Farmers in our area get a higher price for their crop because they are in close proximity to one of the major grain processing centers in the country. If our water rates go up, our grain processors can shift production somewhere else.

    So the farmers in our watershed have an interest in our city's water rates and have an interest in not causing us to have to stall nitrate removal systems in our water treatment plants. So we are finding a lot of areas where we have common interests and that we can work together very well.

    I had not spoken about wetlands, and there is really nothing in my testimony about it, but let me just toss this out as kind of an example that I think goes to the kind of philosophical questions you are asking.

    As we look at our watershed system that we are trying to deal with, we are not so much faced with the problem of destroying wetlands, we are looking at restoration of wetlands as one component of an overall watershed plan to deal with nutrients and sediment, and we are looking at areas where we may be able to use existing programs.
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    And this goes to a comment that is in the testimony about hoping that this committee will coordinate with other committees in these areas. We would like to see the Wetlands Reserve Program, that is part of the agriculture bill, be able to be used by us as a tool to restore wetlands that could be part of our overall watershed management plan to improve the water quality in our area.

    So the issues that you raise are difficult issues, they have to be dealt with, and they can be dealt with very effectively at the local level.

    Mr. BOEHLERT. Thank you very much.

    Mr. GILCHREST. Thank you very much.

    Thank you, Mr. Chairman.

    Mr. BOEHLERT. Mr. John, Mr. Gilchrest's number is 553–11—no.

    Mr. Oberstar.

    Mr. OBERSTAR. Thank you very much, Mr. Chairman.

    And let me offer my congratulations on your first outing on a major issue as Chair of this Water Resources Subcommittee. You have been a great contributor in the years past. It has been a delight to serve with you, and if there is anyone deserving to be a Chairman of a committee on your side, and many of you do, you certainly are one of the premier.
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    And Mr. Gilchrest can speak at length any time he wants to. He has been a solid, thoughtful voice on protection of our water resources.

    I am glad you voluntarily raised the question of wetlands, because while it was not in your testimony, it was about to be. I think the new frontier of the clean water program is the nonpoint source arena. We have focused in the 35-plus years of the clean water program on point sources. Industry has spent $130 billion on its role in cleanup, municipalities have spent about $75 billion doing their share of cleanup. Both of them should be furious that pollutants are still running off into the Nation's streams and lakes, and that the residues of past egregious errors and abuse of our water resources are still in the sediments of the lakes and harbors of this country.

    In the Great Lakes, there are 42 areas of concern, or toxic hot spots; 5 of them on the Canadian side, the rest of them on the U.S. side. And we have numerous other bodies of water that have similar problems. And the toxics keep going up into the food chain through the fish and then into the people.

    We have a twofold problem: To stop the discharge of pollutants from open space areas, whether they are farmlands, rangelands, forestry areas, construction zones in cities, or suburban areas in order to maintain the progress that we have made; and, hopefully, roll back some of the pollution that is continuing from nonpoint sources. But that has been one of the most difficult areas to attack.

    I heard with great interest your comment about restoration of wetlands. We have lost more than 50 percent; many places in the country, 60 to 70 percent of the wetlands in this country. The great Dust Bowl Era of the 1930s was not a mistake of nature, but an active result of people abusing the land and not knowing how badly they were abusing it.
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    My district has enormous reserves of wetlands. They are the great aquifers, where water is filtered and water is held in reserve for a time when nature is not so abundant. The wetlands are the great filtering places, and if we dry them up and destroy those wetlands, it is extremely difficult and perhaps prohibitively costly to restore them.

    One of the problems that we confront in this issue is that of takings. You are a city councilman, you vote on a number of ordinances that direct citizens to do or to forbear doing; not to conduct a business in their home in a residential area. That could be a subject of a taking issue. Courts in the past have held that compensation is appropriate and required only if the landowner is denied all economic use.

    There is some leeway in here, and we have spent a lot of time on this committee, last year, debating how much diminution in value should be compensated if you have a 10 percent loss of your lands. What is your view on takings with respect to land use?

    Mr. JOHN. Mr. Oberstar, I am afraid I am really not your best witness on that. As I have stated, in our particular situation, in Central Illinois, most of our wetlands have already long since been drained for agricultural use. So we seldom, if ever, run into the issue of takings, particularly as it applies to wetlands protection.

    We are more often in the situation of looking at the multiple benefits that could come not only for water quality but also for recreation, habitat enhancement, and outdoor recreation that could come from restoring some of our floodplains that have been drained and channelized and everything else, restoring those to wetlands use.
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    Mr. OBERSTAR. Where does your city get its drinking water?

    Mr. JOHN. Our drinking water comes from an impoundment of the Sangamon River, which has a 925-square-mile watershed, 87 percent of which is in row crops.

    Mr. OBERSTAR. If you have runoff of pesticides, fungicides, rodenticides, fertilizers into that watershed that goes into that drinking water, then surely your drinking water treatment costs have to go up.

    Mr. JOHN. Absolutely.

    Mr. LAUGHLIN. Would the gentleman yield for just a minute?

    Mr. OBERSTAR. Do you make an assessment against those folks who dump all that stuff into your drinking water?

    Mr. JOHN. At the moment, we do not have the legal tools to do that.

    Mr. OBERSTAR. No, sir, of course not.

    Mr. LAUGHLIN. Would the gentleman yield?

    Mr. OBERSTAR. If I have the time.
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    Mr. BOEHLERT. Well, I have been generous with the gentleman's time because he was very complimentary of me in the beginning.

    Mr. OBERSTAR. It was a quick red light, Mr. Chairman.

    Mr. BOEHLERT. But I would like to point out, on March 7th, we will have a hearing that is devoted exclusively to the subject of wetlands and property rights. It is a subject, I think, that demands our very careful attention and so we will deal with it in detail then.

    Mr. LAUGHLIN. Would the Chairman yield for a quick observation?

    Mr. BOEHLERT. Be glad to.

    Mr. LAUGHLIN. To the representative of a large city. Not all the wetlands have been drained for agricultural purposes. If you will go check some of your subdivisions and some of the industrial grants that brought people into your city to thrive and embellish the pocketbooks of some of your people, you will find some of the wetlands have gone there, too.

    This is the point I was making earlier; people from the cities want to come here and beat up on the rural people and agricultural all the time, and that is a problem we are going to have to continue to address. So I just share that not all has gone to agriculture.
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    Mr. BOEHLERT. Fine.

    And now for our final Member, a good lead-in, for Mr. Hayes. You did hear on March 7th, we will be having a hearing devoted exclusively to wetlands and property rights?

    Mr. HAYES. Well, they are eight years overdo.

    That is an interesting concept.

    Mr. BOEHLERT. Some people would say 40 years overdo.

    Mr. HAYES. That is true. I think I am going to support your statutory suggestion about liability for those who drain into the area, since I represent southwest Louisiana. I look forward to the 22 States who are going to pay the bill for banking the Mississippi River.

    You mentioned earlier it, indeed, was these kind of drainage projects that destroyed wetlands, and they sure did. I imagine from Illinois to Louisiana, there are going to be several million really irritated people about this plan. And the point I am making is generalities will not work, and that is why the Clean Water Act has failed. It attempts to do Federal generalities for Utah and Cameron, Louisiana, for New Jersey groves, and for areas of cranberry, and for San Diego's harbor and for Mr. Bartlett's sewer system, all in one big time.

    I would suggest that what the gentleman from Texas is pointing out is the geography and topography of the regions suggest a regional and localized program and a Federal oversight responsibility for environmental concerns.
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    I really do not have any questions for Mr. Bartlett. He is fun to talk to. He has some experience on the EPA stuff on his own behalf.

    I would imagine that if it is not both residential and farm, as Mr. Laughlin said, then, clearly, those folks around Dallas should not require 404 permits, if that is not wetlands and wetlands laws. But since he tells me day in and day out that the Federal Government views most of his city that way, then they must come under the program and we should do something about it.

    I don't really have any questions. I have been asking questions for a lot of time. This Congress is going to be for some answers.

    Mr. BOEHLERT. Thank you very much.

    One final note from Mr. Horn.

    Mr. HORN. Thank you very much, Mr. Chairman.

    Mr. John, I thought you had an excellent background statement and I noticed with interest in your response to Mr. Filner, you said you had a tale you could give us, a tale of horror stories in some of these areas. I would like you to file that for the record, send the original to the Chair and a copy to me, because like many on this committee, we all hold other hats, and my next request relates to that. [John's horror story:]

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    Mr. HORN. We serve on other committees, in my case, on Government Reform and Oversight, and we will have some hearings having to do with privatization. And one of the problems we face in this very complicated area, so well-described by my colleague Mr. Gilchrest, is that there is not enough money, no matter what treasury we go after, to solve all these problems. So we need some innovative ways of getting the job done and the question then gets down to the degree to which the free market and various attempts at privatization can help us solve these problems in a rational way.

    So I would like the brain trust of the National League of Cities to give this committee and, again, send a copy to me, because we will be following up in the Government Reform and Oversight Committee, of the types of innovative examples that are occurring in the cities in this regard, as to how to get market factors into those decisions and how to get the job done. So if you could do that I would be most grateful.

    Mr. JOHN. Certainly.

    Mr. BOEHLERT. Thank you very much.

    Thank you very much, Mr. John.

    And before I introduce our next witness, I want to give you a little bonus. Those of you who are so attentive in showing up for these hearings, from time to time, we will give you some news flashes. It has just come over the wire that former Vice President Dan Quayle will not run for President in 1996. So, Mr. Bartlett and others, you can make your plans accordingly.
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    Mr. HAYES. Did Dan say that?

    Mr. BOEHLERT. Now, it is my distinct pleasure to present to you the Honorable Steve Bartlett, Mayor of Dallas, Texas. Steve and I are very close friends. He was first elected to Congress in 1982 and served with distinction here and is now back home and running the city of Dallas.

    Mr. Bartlett, welcome

TESTIMONY OF HON. STEVE BARTLETT, MAYOR, DALLAS, TX, ON BEHALF OF THE U.S. CONFERENCE OF MAYORS

    Mr. BARTLETT. Thank you.

    It is good to be here with friends and see each one of you, Mr. Bateman and Sherry, who I served with, and Bud, and many of you that I served with, and Greg, from Texas. I always especially appreciate the brilliant questions and conclusions of my colleague from Louisiana, who puts it so well.

    Mr. Chairman, I apologize for being late to the hearing. When I got the word of your request to appear here, I was already signed up to a hearing down the hall in the education area. I submitted my testimony for the record, and I will summarize my conclusions.

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    Number one, as I sat here and listened to a couple of the questions that were grant-type questions, should we make it block grants or categorical grants and such. I do admit, as Mayor of the 7th largest city and Chairman of the U.S. Conference of Mayors Committee on Energy and Environment, I had to do a double-take and check to see about those grants, because we mayors do not think of the Clean Water Act as grants or of any financial benefit at all.

    The Clean Water Act, in most of these areas, is a series of mandates and costs, and I am now vaguely aware there are some grants that go to someone, but whoever it goes to, it does not go to any cities that I know about. The fact is that the whole area is a series of rather costly mandates.

    I will put that in perspective. The mayors' estimate in 1993, that of the 10 largest mandates by the Federal Government, including these two areas, these mandates cost the cities 12 percent of all of our local revenue in 1993, that in 1998 it will be up to 22 percent or approximately $1 out of every $4 will be mandated by the Federal Government in these areas.

    Let me be more specific. In the areas of spending for sewer, water and sanitation, cities and local governments spend $53 billion of our taxpayers' money, as we should. The Federal Government and State governments, combined, spend $8 billion. But all of the requirements for how to spend it come from people that do not have to pay for it, from other levels of governments, all the requirements. We spend most of our time complying with Federal and State law.

    Now, I speak to you as a city that is known in national circles as having gotten our act together years ago and so we literally and figuratively come to this committee with clean hands, having met all of the requirements early and often.
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    Number two, I am here to ask for on behalf of the U.S. Conference of Mayors, in which our mayors just met about a few weeks ago, the Committee on Energy and Environment, and we have some new approaches for you, and I want to suggest some very specific legislation to this committee for the short-term while you begin to sort out the long-term.

    Number one is to place a more—this is contained in my testimony, Mr. Chairman, pages 5 and 6—number one, is to place an immediate moratorium on Phase II permits for those 19,000 cities in the country, where there is an administrative overload. EPA cannot process the Phase I permits of 700 cities, and to continue down the train wreck to seem to require Phase II permits just makes no sense at all.

    Number two, on Phase I permits, stop Phase I permits, being those permits that a deal with the nonpoint source pollution. We do not know what we are doing. We cannot comply with zero discharge policies. You cannot measure pollutants on heavy rain days that are coming from 20 to 100 square miles from all kinds of sources, and measure it the same way as if it were coming out of a pipe of a treatment plant you have just treated. Untreated water and treated water do not have the same characteristics or standards, and if we continue on this idea of having to treat them the same, then the whole system bogs down.

    Number three, immediately stop the enforcement of the sanitary sewer overflows. It is bad science, bad environment, bad regulation, and no one can think about affording it. It is estimated that if—well, first of all, it is not in the law, but there are some—because the law is silent on the subject of sanitary sewer overflows, there are some at EPA who have contended that that means there is a zero tolerance for any discharge of the sanitary sewer overflow, which means of the water that comes in on a heavy rain day, and zero tolerance would require a $160 billion, $160 billion of cost to comply, if it could be achieved. To the City of Dallas alone, that would be a $3 billion cost.
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    Mr. Chairman, we are the seventh largest city in the country. We are about to propose to our voters a bond issue for a three-year capital improvements of $146 million, and yet EPA, without a hearing, without a regulation, without law and without anybody to appeal to, is on the verge of imposing $3 billion of additional costs for a problem that does not exist in the first place.

    Having done that, Mr. Chairman, with this committee, then the committee would have the opportunity to look at the whole act for major overhaul, retain the clean water successes, apply some common sense and achievable standards and impose a rule of law, instead of a rule of man, or a rule of arbitrary rulings, by people that we cannot even find, much less have someone to appeal to.

    So, Mr. Chairman, with that, I appreciate the chance to be here and I look forward to the revolution that this committee is helping to bring about in American government.

    Mr. BOEHLERT. Thank you very much, Mayor, and we brought out the big guns. We have the Chairman of the full committee, Mr. Shuster.

    Mr. SHUSTER. Thank you very much.

    Steve, it is great to see you here again. And I want to tell you, I want to guarantee you that the points that you are making on behalf of yourself and the mayors, are going to be given very serious consideration. And, perhaps, it is a little oversimplified, but I want to say that my instinct is somebody is going to have to persuade me why we should not do what you are saying we should do. Because, otherwise, my instincts are with you 100 percent.
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    Thank you.

    Mr. BARTLETT. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Mr. Mineta.

    Mr. MINETA. Thank you very much, Mr. Chairman.

    I want to welcome Steve back to the Congress and especially to testify before this committee. You were a very fine Member of Congress and now a very fine mayor of a great city. In fact, I had the privilege when I was Mayor of San Jose of keynoting the National League of Cities convention in 1974 with Wes Wise, who was then the Mayor of Dallas. So I just want to commend you for your service as a Member of Congress and now as mayor.

    I have always maintained that today, frankly, there are three places a person didn't want to be in politics, one was mayor and the other was governor and the other the President of the United States.

    Let me go to your testimony and ask about some of these things. First of all, on page 6, you refer to personnel access covers. I take it, this is the politically correct term for manholes, personnel access covers.

    Mr. BARTLETT. It is at least gender neutral.

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    Mr. MINETA. It is gender neutral. It is a different kind of PAC.

    Steve, you speak about unfunded mandates, and having come from local government and recognizing that at local government you have to deal with what comes out at the end of the legislative pipeline. But when I think about the work of this committee, there is not only unfunded mandates, but there is also unmandated funding, and we do a lot of unmandated funding in this committee.

    In fact, as we eyeballed the situation, what we mandate costs maybe about $50 billion, but what we do in terms of unmandated funding is something like $200 billion. And the biggest is the highway program nationally. So I think we have to sort of take this into balance as we talk about unfunded mandate.

    And I appreciate the points that you raise and others raise about unfunded mandates. But I think there is also the other side of the equation called unmandated funding. And the biggest one that we have is the highway program.

    Now, you talk about the cost of what these Federal mandates, in terms of federally imposed directives, what they do. And the study that you refer to from the U.S. Conference of Mayors is very impressive.

    I am wondering if you could explain to us what went into those cost figures that the conference refers to. For example, do the numbers include all capital and operating costs associated with wastewater treatment plants; or with safe drinking water—the drinking water treatment requirements?
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    Mr. BARTLETT. Two studies; one is the study that we had in 1993 that took 10 mandates, or laws, including the Clean Water Act and the Safe Drinking Water Act and applied those to cities of above 30,000. Took all the costs that those cities expended only as a result of the mandates. These were not the costs to provide drinking water but the cost to comply with the safe drinking water requirement, whether or not it made it more safe.

    Mr. MINETA. For instance, in the Clean Water Act, it says that all communities have to have secondary treatment plants. That would be then considered a mandate, I assume?

    Mr. BARTLETT. Yes, it would, if it was done as a compliance with Federal law.

    Mr. MINETA. So, therefore, the costs that are associated, then, would be capital as well as operating costs?

    Mr. BARTLETT. Yes. Yes.

    Mr. MINETA. In the absence, then, of a Federal mandate, as that has now been defined, would the city of Dallas not have done any of those things as they relate to clean water or safe drinking water treatment?

    Mr. BARTLETT. We would have done much of it and, in fact, the City of Dallas comes, as I said earlier, with clean water, both in terms of the sewer system as well as the drinking water. But much—many of the requirements we would not have done because it did not provide any safer or better or cleaner water.
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    This includes both, but these were the ones that were mandated to us. And I will be happy to submit either now or for the record those specific items in which we did only out of compliance with the mandate and not for any scientific or environmental purpose.

    Mr. BOEHLERT. If I may Mr. Mineta.

    Mr. MINETA. Absolutely.

    Mr. BOEHLERT. Would you please submit that for the record. That would be very helpful to Utah's, mayor.

    Mr. BARTLETT. Be happy to.

    Mr. MINETA. It would be helpful, if you could do that, Steve. Because I agree with your statement that Congress ought not to just automatically pass costs on to State and local governments. So that would be helpful, if you would submit those for the record.

    And again, Steve, I do appreciate very much your taking time to come and testifying before us.

    Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you.

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    Another Member of the 98th class, Mr. Bateman of

    Virginia.

    Mr. BATEMAN. Thank you, Mr. Chairman.

    And welcome, Steve, it is especially good to have you before the committee.

    Let me make the observation that being Mayor of Dallas must be more kind and gentle than being a Member of Congress, because you do not look any older since you left here. I can assure you, I do.

    Let me, in light of enlivening the proceedings somewhat, by commenting on the unmandated funding. This is a term that is new to me, but if that term is supposed to include monies that this committee authorizes for building highways out of the Highway Trust Fund, it would seem to be inappropriate to call it an unmandated funding, because I think there is a mandate that we use the trust funds for the purposes for which the people paid the user fees into the fund.

    Let me then comment that I am glad that you have included in your comments references to the overreaching of regulatory agencies. Your references to EPA in the one setting, has definite resonance with me.

    And as I look back at the history of the Clean Water Act and what it says and how it was extended by regulatory interpretation, which a Federal District Court in the District of Columbia chose to accept, we went an awful long way from the phrase ''waters of the United States'' in its normal statutory historical tradition, to include things such as the backyard of my constituent Delma Mierz, that I stood in on a cold rainy February evening in 1983, while a Colonel of the Corps of Engineers told me that I was standing in waters of the United States because there was a low boggy area in his backyard; that he wanted to fill in to avoid standing water for the safety of his children not being eaten by the mosquitoes.
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    It has been a long, long stretch. And my editorial comment is simply going to be, we in the Congress need to write better law. We need better oversight over Federal agencies so that they do not carry them to excesses beyond what Congress ever intended or if it intended, certainly, in many instances, was mistaken and needs to rein it in or clarify congressional intent.

    Steve, welcome, glad to have you.

    Mr. BARTLETT. Thank you, Congressman.

    Mr. Chairman, I might say as a mayor, I have not found much unmandated funding as a mayor who tries to make good transportation use of ISTEA money. For example, the extra 30 percent that the Davis–Bacon mandate costs the State, through the Federal authority, telling us where to spend the money, and on which streets in my city. It does not feel like it is unmandated.

    Mr. BOEHLERT. Thank you.

    Mr. Laughlin.

    Mr. LAUGHLIN. Thank you, Mr. Chairman.

    Welcome, Steve. I certainly understand what you are talking about in your sedentary sewer overflows. Because fortunately, you are one of the mayors in major cities that does not drain your problems through the 14th District, and I am most appreciative of that. You said, send it on east to Houston, and you can just keep doing it.
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    But certainly your point is well taken, because the massive floods that map this, the eastern part of our State, always start up in the Dallas area with the heavy rainfalls you get from time to time.

    I just want you to know I agree with what you say, but what are the suggestions you are making? Should we have some standard in the bill that when we have rainfalls in excess of a certain amount? Where are you coming from on relief to the city? Because when you have the kind of rains that cause the entire Trinity River watershed to flood for miles away from its channelings, it is certainly not a discharge problem created by the City of Dallas.

    Mr. BARTLETT. Congressman Laughlin, what I am suggesting is as follows: Number one, to recognize that a big flood is a big flood, and it has all kinds of characteristics of flooding. But nonpoint source pollution is not one of them in ordinary standards. If your farm, or your house, or your subdivision is flooded out, the last thing you are worrying about is whether a nonmeasurable portion of that water came from a manhole cover in Dallas, 200 miles upstream.

    What I am suggesting, on behalf of the U.S. Conference of Mayors is, number one, a moratorium required by October 1st of the 19,000 new permits for nonpoint source pollution that EPA is not equipped to, nor should they try to become equipped to handle the first 700.

    Number two, is a moratorium, in effect, of the Phase I permits. We cannot, and no one believes we can endorse the standards that are set on nonpoint source pollution and the runoff standards. So stop, particularly with regard to heavy rain, and then let this committee take this session of Congress to review those standards and to decide in law what the standards should be.
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    And number three, to immediately say that the sanitary sewer overflow does not count in law as requiring a zero discharge. A number of EPA administrators throughout the country are contending that sanitary sewer overflow at a period of high rain, violates the act—it constitutes a discharge. And scientifically, it does not environmentally, it does not, but if an EPA administrator says it does, there is no appeal. So this committee should decide whether it does or does not. Obviously, decide it does not, and say so in Federal law.

    Mr. LAUGHLIN. Let me move out of the Trinity River and use the Colorado River watershed as an example, but I want you to use your city for your recommendations.

    I represent all the Colorado River, from about 60 miles west of Austin, all the way to the Gulf of Mexico, with the sole exception of that which runs through the city of Austin, east. And as you well know, upstream are some of the most pristine waters in our State. South of Austin, there is no fishing signs, no boating signs, the water quality changes drastically for several counties.

    And to, Mr. John, I will tell you that the testing of the water after it has gone through the rural agricultural fields, it is cleaner than it was before it went in.

    Now, Steve, what are your recommendations as to what the cities' responsibilities are and how can we improve the water quality below the cities to what it is above the cities?

    Mr. BARTLETT. The cities' responsibilities is to treat its effluent in its sewer treatment plant, number one. Number two, to avoid or prohibit nonpoint source that is identifiable, that is dumped into the streets, which then goes through the separate sewer system into the rivers. Such as used motor oil.
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    We have in Dallas, as many cities do, a requirement that you take your used motor oil in to be treated, and we have collection points for it, and treatment points for it, and we have all kinds of ordinances and prohibitions against doing anything else with it. Household waste—the city's responsibility is to establish a system where citizens can bring their aerosol cans or paints cans for proper disposal. But a city does not and should not have a requirement for a what is called a ''zero discharge'' that a drop of oil cannot make its way through your city into a river at the south end or at the downstream end of your city; most rivers flowing north to south.

    Mr. LAUGHLIN. Would the Chairman bear with me for one more question?

    Mr. BOEHLERT. Make it a short question.

    Mr. LAUGHLIN. I will. You know, in agricultural areas, we fertilize, but it is also true that in the cities the city dwellers fertilize their lawns. Do you have any idea what the pounds of nitrates put into a lawn, what the equivalency would be in comparison to what is put in a cotton fields or rice fields or a grain fields?

    Mr. BARTLETT. I do not.

    Mr. LAUGHLIN. If we require the rural people and agriculture to have accountability, do you agree that we should require the city dwellers to have accountability.
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    Mr. BARTLETT. We should use common-sense judgment and measure the amount. And if an amount of fertilizer in a particular area is a problem for the river, we will then measure it. And if it is a problem, we will then deal with the problem. But what we have now in our system, we have a zero discharge rule that says whether it is a problem or not you still cannot do it.

    Mr. LAUGHLIN. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you very much, Mr. Laughlin.

    Mr. Gilchrest.

    Mr. GILCHREST. Thank you, Mr. Chairman.

    Mr. Bartlett, if I understand you correctly, would you suggest to this committee, and it is an interesting suggestion, that this aspect of the Clean Water Act be put aside as we reauthorize the Clean Water Act so that we will have more time to assess the impact that you have described here and make it a separate statute?

    Mr. BARTLETT. Whether it is a separate statute or not, it needs to be put aside. There needs to be an immediate moratorium on Phase II, which is the 19,000 cities that have not applied for their permits yet. And on Phase I, we need to have, in effect, a moratorium, so we stop telling ourselves we are going to enforce what is not enforceable and then that gives this committee a chance to look at the nonpoint source under Phase II cities—Phase I cities, I am sorry.
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    Mr. GILCHREST. Is the main problem the rain event?

    Mr. BARTLETT. The main problem is the rain event and the so-called zero discharge rule. There are other problems, however, in Phase I cities, that just need a whole new look.

    Mr. GILCHREST. So this whole area of combined sewer overflows, you are suggesting, would be that we put that aside?

    Mr. BARTLETT. The whole area of combined sewer overflow should be put aside and let the Congress pass a law to say to the country and to EPA what it is Congress intends as the elected representatives of the country.

    Mr. GILCHREST. Do you have a recommendation on how we could accumulate the information necessary to make maybe something more than a common-sense judgment? Common-sense judgments mean different things to different people.

    Do you have any suggestions on—and the words ''have another study'', do not ring very well up here—but a task force, someone that would travel to cities; someone that would take a look at the nonpoint source pollution from someone putting too much fertilizer on their lawn or the problem of oil on city streets or things like that?

    Mr. BARTLETT. I don't have a recommendation for how to redo the law in this area of the Clean Water Act, other than to stop trying to enforce what is not enforceable for this year. I do recommend intuitively that this committee look at it and make the recommendations, as opposed to an outside task force.
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    I will say that the revolution was only heralded where these things became possible on November the 8th. It took most mayors a full two months to sort of believe and realize that it really is possible to change the laws in a way that meets the needs of the citizens.

    The U.S. Conference of Mayors has met on the subject once. We came up with these specific recommendations, but then we also want to work, over the course of the next six to eight months, to come up with additional specific recommendations for you and work with this committee.

    So I do not have the add-on for you, other than to say stop making the problem worse for the next six to twelve months while we work on it together. Now that we have, with the November 8th elections, now that we have an opportunity to change some of the underlying legislation, let us take some time and change it.

    Mr. GILCHREST. Well, thank you.

    Mr. BOEHLERT. Thank you.

    Mr. Gilchrest, thank you very much.

    Mr. Hayes.

    Mr. HAYES. Since they are having another hearing on wetlands, I figured I would talk about something else. I think that is a neat idea, about the unmandated funds.
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    I have a nonpoint source question for you, mayor. Those funds that the government gives you out of its largess, I don't suppose every April 15th, you have any folks in Dallas that send a check to Washington, or you have some corporations there that do that on their annual returns.

    It seems to me the nonpoint source of that money is about 250 million people, give or take, including their families, who probably resent the fact the government somehow thinks it became its money; that it was benevolent enough to hand back to them now and then. I still cannot figure out why my team lost on November 8th. I am sure it is not the message.

    The point I am making is that what we are really once again trying to do, whether we are looking at the complexities of nonpoint source or whether we are looking at specifics, is simply allowing metropolitan areas to deal with the metropolitan statutory schemes that work. And what we really should mandate is outcome and let you figure out how to get there.

    We would have a much better Clean Water Act if we said, here is the environmental standard, now you get there. And if you cannot, let us see why you cannot. Instead of saying, here are the rules to get there and if you break one of the rules, then in our complete bureaucratic minds, you somehow are a violator or a criminal.

    I have a firm in my district that meets clean air standards on emissions in Lake Charles, Louisiana, at 25 percent of the cost of the Federal mandate, but cannot implement it because the form by which it accomplishes that is prohibited. The outcome is as good or better, the cost is lower, but you cannot do it because it breaks the rules. That is not environmental sanity, that is the kind of stuff that made so many people mad on November 8th, that we have a whole new team up there. And I suggest to the new team, if they do not respond to the same kind of concerns, they are going to be a former old team. That should be the mission of this Congress.
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    Other than that, I would appreciate one other related thing, if you would call me in the office later, I have an issue that involves Dallas, that I will not take up your time here with it, I would appreciate it.

    Mr. BARTLETT. Surely.

    Mr. BOEHLERT. Thank you, Mr. Hayes.

    Mr. WAMP. I just want to share a couple things with you. Yesterday, Chairman Boehlert and myself, were a part of a markup in the Science Committee of risk assessment, which went well, all day. Commerce was doing the same thing simultaneously. So I want to encourage you and tell you that some help is on the way.

    Many of the amendments offered and passed yesterday were a result of input from cities and counties and private sector entities out there across America, and I really think it is going to be productive into the future.

    The second thing I want to share with you, since you are a former Member of Congress, is we have a new rule up here, where there is no proxy voting, and I wanted you to know we had about 95 percent participation yesterday at our markup and it went from 10 o'clock in the morning till nearly midnight. So it is a little different, I think, than it used to be, with an attendance of 95 percent, it is active participation, but it is also a real hectic time here, and it is good to have you back.

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    Mr. BARTLETT. Thank you.

    Mr. BOEHLERT. Thank you very much.

    Mr. Horn, do you have anything?

    Mr. HORN. Well, let me just ask that the governors and the mayors—the mayors in this case—give us a statement on the horror stories, if any, under this act. You have mentioned some. But similar to Mr. John, I would like also to know the innovative ways your organization has seen in privatization of these facilities.

    Mr. BARTLETT. I would be happy to, Mr. Horn, and I will submit it for the record. The horror stories are rather rampant. Nevertheless, most cities complied, and I want to be sure to say for the record, on behalf of the U.S. Conference of Mayors and all mayors, and that is no mayor wants to roll back the clock to pre–1972 when the lakes and the rivers burned.

    The mayors consistently like many of the results that we have gotten as a result of the Clean Water Act and the Clean Air Act. In many cases, though, as we moved into the 1990s, the details and the prescriptions and the overregulation and the mandates that were not good science, much less good mandates, much less a part of law, have just become way overly burdensome.

    Mr. Chairman, one other comment, and that is as the committee considers these items, I think it is important to remember that there are two different measures of standards in terms of water and air that the Congress can enact. One, are those standards that apply simply within a city, the safe drinking water standard, for example. In which case, while I think the current Congress will reauthorize and substantially reform the Safe Drinking Water Act, the underlying assumption that cities need to be protected from themselves, for their own safe drinking water, is simply not an accurate one. In looking at environmental considerations that only apply to the residents of that city, Congress should give wide latitude to that city to make the determination.
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    Clean water is a different type of animal, because, in fact, the water does go downstream, and the Congress, both in–State and interstate does have a role in that and we are not suggesting Congress does not have a role. We just want the role to be based on good science and affordability.

    Mr. BOEHLERT. It is not quite as simple as we oftentimes make it. I can show you 104 obituaries from people from Milwaukee, Wisconsin, who died from drinking water, from the public water system in one of our premier cities, and it has been identified that the source of the problem is something called Cryptosporidium. It is a complex issue.

    And, Steve, you know, and we have been colleagues and partners in this venture called ''good government'' for a long time. I would love nothing more than to have no more unfunded mandates. I would love nothing more than to dismantle all the rulemaking apparatus in the Federal Government and say we are all going to be responsible, we do not need you guys. But the fact of the matter is, we do, and we have to act in a responsible matter. We have to be responsive to the problems, and we have to hear from people like you, who have an lot to offer people like Mr. John, and there are other witnesses, and work it out together.

    So I want to thank you very much for sharing your thoughts and your time.

    And, Mr. John, thank you, too.

    Next panel, panel 2, and we will have you all joined together.

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    Mr. BARTLETT. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Mr. Christophe Tulou, from the National Governors' Association; and from the Association of State and Interstate Water Pollution Control Administrators; Bruce Baker, Director of Water Resources Management Bureau, Department of Natural Resources, from Madison, Wisconsin; Robert J. Zimmerman, Administrator, Division of Water Resources, Dover, Delaware; Robert L. Larson, Chief of the Program Management and Planning Section of the Bureau of Environmental Loans, Madison, Wisconsin, and Mike Llewelyn, Program Manager, Water Quality Program, Washington Department of Ecology, Olympia, Washington.

    Thank you very much gentlemen for sharing with us your time and we look toward to hearing your testimony. Your statements will be made a part of the permanent record in their entirety. I would ask that you would summarize.

    And if we may go first with you, Mr. Tulou.

TESTIMONY OF CHRISTOPHE TULOU, SECRETARY, DELAWARE DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENTAL CONTROL, DOVER, DE, ON BEHALF OF THE NATIONAL GOVERNORS' ASSOCIATION; BRUCE J. BAKER, ASIWPCA PRESIDENT AND DIRECTOR, WATER RESOURCES MANAGEMENT BUREAU, DEPARTMENT OF NATURAL RESOURCES, MADISON, WI; ACCOMPANIED BY: ROGER J. ZIMMERMAN, ASIWPCA VICE–PRESIDENT AND ADMINISTRATOR, DIVISION OF WATER RESOURCES, DOVER, DE; ROGER L. LARSON, MEMBER OF THE ASIWPCA MUNICIPAL ASSISTANCE TASK FORCE AND CHIEF, THE PROGRAM MANAGEMENT AND PLANNING SECTION, BUREAU OF ENVIRONMENTAL LOANS, MADISON, WI; MICHAEL T. LLEWELYN, ASIWPCA CHAIR, COMPLIANCE AND ENFORCEMENT TASK FORCE AND MANAGER, WATER QUALITY PROGRAM, WASHINGTON, DEPARTMENT OF ECOLOGY, OLYMPIA, WA, ALL ON BEHALF OF THE ASSOCIATION OF STATE AND INTERSTATE WATER POLLUTION CONTROL ADMINISTRATORS (ASIWPCA)
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    Mr. TULOU. Thank you, Mr. Chairman, my name is Christophe Tulou, Secretary of the Delaware Department of Natural Resources and Environmental Control, and I am here representing the National Governors' Association.

    I appreciate your offer, Mr. Chairman, to include my full statement in the record. We will use that as a backstop in case in my rambling I get something a little incorrect.

    I would like to say right up front, that the goal of the National Governors' Association and of the governors who are members of the Association, is a clean environment. Not just a clean environment, but one that is effective and cost efficient, and that the mechanisms for getting to a clean environment are effective and cost-efficient.

    A little history: Many of the members of this subcommittee are fairly familiar with this, but just to put the governors in context on the Clean Water Act reauthorization situation. Last year, the NGA developed a proposal that had garnered broad bipartisan support, and we hope in this session we will be able to work with Congress and local governments to craft a joint proposal that meets the goal that I mentioned before, clean environment and effective and cost-efficient programs.

    Many of the elements of the NGA proposal last year were incorporated into a bipartisan alternative discussion draft that was developed by several Members of this committee. The NGA feels that bipartisan alternative is certainly a good place to start and the governors hope that they will be able to maintain many of the broad principles that were contained in that alternative last year.
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    The primary objectives of the governors are fairly straightforward: First, to improve the effectiveness of the Clean Water Act and its implementation. Second, to increase funding and flexibility for State-based nonpoint source pollution programs. Third, to establish reasonable methods for addressing municipal storm water runoff and realistic time frames in which to get that job done. Fourth, to encourage urban and rural watershed planning with the necessary States flexibility to make that work. And finally, to extend the Federal commitment to provide capitalization grants for wastewater State Revolving Funds, we have proposed $5 billion, certainly would hope that at least $2 billion could be provided through the year 2000.

    To sum up the goals, basically what we are looking for is common sense, effective partnership, and the requisite amount of flexibility that recognizes the need for Federal oversight of State activities, but will provide States and localities the necessary flexibility to get these goals met.

    Specific programs that could advance these goals are listed in my testimony, and I will briefly summarize them.

    We have heard quite a bit about storm water runoff management. In Delaware, for example, and this is an issue that varies from municipality to municipality, from State to State. In Delaware, we depended about 40 percent on surface water for our water needs. So, therefore, anything that goes into our surface waters is a major concern and we feel very strongly as a State of Delaware that we need to address this runoff problem.

    Other States may have varying amounts of dependence on surface as opposed to groundwater for those needs and they may need to approach the storm water runoff problem in a slightly different way.
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    We feel that States must be able to prioritize effort based on public health and environmental risk, water quality needs, and cost effectiveness. We also believe that the law should recognize than storm water discharges are not the same as the discharge pipes that we have coming out of our industrial facilities.

    There is different stuff coming out, the flow rates are not as predictable as they are coming out of industrial facilities. In essence, we need a different management approach just, as we do with nonpoint source pollution in general.

    Finally, the governors hope you will provide relief to certain municipalities to allow the development of site-specific BMP's and nonpermit approaches for controlling storm water. And that picks up certainly on the points that Mr. Bartlett was raising in the prior panel.

    A second major area that we would like to see focused upon is the nonpoint source pollution management effort. This is a complex challenge, reducing pollution flowing from agriculture, commercial and residential sites as well as streets, bridges and other surfaces, by definition, very difficult.

    The keys to success we feel are education, adequate funding and time. Ecological studies in Delaware, for example, suggest that even with the best approaches that we could apply, our inland bay area will not reach acceptable levels of nitrogen perhaps for several decades, simply because the groundwater flowing into that system will be contaminated for some time to come.
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    We believe the State and local governments can succeed under the current Federal and State framework given enough time. And we feel that we have made great strides already, in terms of watershed management.

    Again, critically important, and it is another area where flexibility is critical, we feel that it is a simple concept that is complicated by bureaucracy that is aimed at discreet problems. We need to knockdown administrative regulatory barriers that prevent the integration of existing programs into effective tools that States and localities can use to meet their needs.

    Another key issue and of great interest to the States, of course, is the State Revolving Fund. We believe that the Act should maintain the broadest eligibilities for use of those funds that are currently contained in the Act and in the regulations.

    We feel that funds have been used quite adequately to improve water quality, both in traditional ways, for example, assisting municipalities with their wastewater treatment facilities, and also some innovative new ways. In Delaware, for example, we use the SRF to help farmers build manure sheds, construct composters for dead poultry, and aid poorer citizens to upgrade their septic systems, as well as a system of removal and cleanup associated with underground storage tanks. These are all crucial and very successful nonregulatory methods for controlling nonpoint source pollution.

    We must also have the capacity to assist hard-pressed communities meet their wastewater needs. The governors support giving States authority to identify such hardship communities, using State-based criteria in a manner that allows flexibility without arbitrarily setting designated populations cutoffs.
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    Wetlands protection. Very important issue. The governors strongly believe wetlands management must be streamlined and the States' role enhanced. We would suggest it would be easier for States to assume wetlands management authority if, for example, the U.S. Corps of Engineers were authorized to grant States programmatic general permit authority.

    Once States assume these responsibilities, they should be free to negotiate an appropriate method of Federal oversight. For example, States should have the option of an annual program audit without facing the specter of EPA vetoes of individuals State permits.

    On the issue of sound science and risk-based priority-setting, which has also been discussed today, and I understand the Science Committee did a lot of work on that subject yesterday, the governors agree the Federal Government should incorporates cost-effective risk, reduction principles into the development of laws and regulations, and that would include the appropriate use of cost/benefit analysis that incorporates quantitative and qualitative consideration that would help States ensure they are getting the biggest bang for everybody's buck.

    In the Clean Water Act, the science used by EPA in developing the Federal criteria for water quality standards should be reevaluated and improved. Better Federal science and data will result in better State standards.

    We cannot discretely talk about just the Clean Water Act in the hopes of achieving a priority use of the funds that are provided to us from whatever source. We have to take into account clean air, Superfund and a variety of other programs. EPA and the States should have the capacity to consider risks and benefits across that full spectrum in advancing our environmental goals.
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    Mr. Chairman, that completes my statement. I will be happy to answer questions at the appropriate time.

    Mr. GILCHREST. I think we will go now to Mr. Baker. We will follow the order on the agenda.

    Mr. BAKER. Thank you, Mr. Chairman. It is a delight to be here today to talk to you about the Clean Water Act reauthorization.

    We have a group of people here who represent the Association of State and Interstate Water Pollution Control Administrators.

    Somewhere between the, quote, Federal mandates and the local realities are the water pollution control programs that are administered at the State level, and we represent the people that are the managers and the operators of those programs, and today we would like to give you our ideas on how we can improve and refine the Clean Water Act.

    With me is Mr. Llewelyn, who is going to speak to regulatory reform; and Mr. Zimmerman, who is going to talk about nonpoint sources; and Mr. Larson is going to talk about the SRF program.

    I would like to take a minute to do two things. One, I would like to outline what we consider the key elements of the Clean Water Act and why I think it has been successful. We think these elements are important for any future Clean Water Act reauthorizations or actions. And, secondly, I would like to identify five management improvements that we think can be made in the act that would, I think, move it into the modern era in terms are where we are with Clean Water Act implementation.
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    And, first of all, the program elements that we think are important begin with water quality standards. The key element that drives the entire system is the State-adopted water quality standards that all 50 States across the country puts in place and drives the entire program.

    The next element that derives from that is the monitoring and plan programs that are used to determine where and what needs to be done in order to meet those water quality standards.

    Then, in order to implement those findings, there is the permit program. The permit program is a key major element that allows us to move directly from the identification of problems to identifying what needs to be done, what the solutions are to meet those problems.

    Next, a key element—and you heard about this—is funding. We would like to identify two important parts of that funding mechanism: one, the elements that fund the State programs that allow its operation and the implementation of the act. The second is the implementation dollars to go to the cities and the localities in order to meet the clean water requirements that come out of the permittings.

    There are two other elements that we believe are key.

    First of all, enforcement in some cases—even though we believe strongly in a cooperative effort, we still need to back up enforcement authority in order to meet water quality standards. The final component and the one that we think needs the most attention in the act is the nonpoint source demonstration program.
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    So the collection of those elements—and there are, obviously, a lot of other pieces of the act, but those two are the main building blocks that have made the Clean Water Act successful.

    In summary—

    Mr. GILCHREST. Mr. Baker could I interrupt? I missed number four.

    Mr. BAKER. Number four is funding.

    Mr. GILCHREST. That is all right.

    Mr. BAKER. An issue I am sure you have never heard of.

    Let me go through the five management improvements that we would suggest for the Clean Water Act, and some of these are kind of fundamental changes to the way the act needs to work.

    First of all, there are a variety of components of the act like 305(b), the basin planning, 303 listings, and on and on that have their different time frames and schedules and are not synchronized. And what we would propose is look at the act, take all of those operating components, synchronize them on a five-year cycle.

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    One of the things that has become obvious to me and—having been here before and testified before the committee—is every time we get into reauthorization we don't have the kind of information we should have before us in terms of what the programs are doing, what is the water quality across the United States. And by synchronizing those components one of the benefits would not only be better environmental decision-making at the local level but more information on what the act is doing in order to have better input into the reauthorization process.

    Second, we would recommend redefining the role of EPA. We think there is a serious need to eliminate some of the duplication and the unnecessary administrative activities that exist. This is in contrast to where we were in 1972 when the EPA had a much larger role in implementing the act.

    Most of the things now have been delegated to the State level, and we think there would be great savings in not only streamlining but also implementation by giving that delegation authority to the States with the proper role identification.

    Three other things, very quickly. Adequate program funding is critical to operate the programs, but one of the problems we have with the Clean Water Act is the many different pieces of funding that are there. We would recommend consolidating that funding, streamlining the administrative processes which can save a lot of dollars in terms of making the Clean Water Act.

    The fourth issue is the act should be streamlined to allow the States to take a greater role in watershed management. And I will not go into detail. Other speakers have spoken to it.
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    But we need to refine the act to encourage and reinforce the watershed initiatives that States and localities are take. I would agree with the speakers from the localities that this is an important area for the States and local governments to work together.

    The final recommendation, Mr. Chairman, I would have is that we need greater State involvement in the EPA rules and decision-making.

    You have heard some stories about stormwater initiatives and other things that are taken out. We think one of the reasons that we run into problems with implementation is that we don't have enough State involvement. We would like to be viewed as coregulators in the process. And one of the problems that we run into constantly, even when EPA has been sympathetic with it, has been the Federal advisory committee act. And we think we need some reforms that will allow the States to be at the table and to have more input into the design of the programs.

    With that, I will conclude my statement.

    Mr. GILCHREST. Thank you, Mr. Baker.

    If you would bear an indulgence for a second. I understand that Mr. Tulou has to leave. I would like to open up the committee for questions to Mr. Tulou, and then we will move on back with your members.

    Mr. Bateman, do you have questions?

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    Mr. BATEMAN. No questions, Mr. Chairman.

    Thank you, Mr. Tulou, for being with us.

    Mr. GILCHREST. Mr. Mineta.

    Mr. MINETA. Thank you very much, Mr. Chairman.

    Let me ask whether or not NGA has a position on takings legislation, which has been a major focus of our wetlands debate. And I was just wondering if NGA has—

    Mr. TULOU. At this point, we have a policy with regards to takings that is under review; and so we anticipate a little bit more discussion amongst the governors, since there are a fair number of new ones, to perhaps refine the existing policy.

    I could say that the existing policy, basically, is very deferential to the court's role in defining what the appropriate amendment to the Constitution has to say and what the framers meant with regards to takings under the Fifth Amendment. And the existing policy, which is under review, does say that the governors would defer to the courts as opposed to suggesting that there be a Federal legislative answer to the question of takings.

    Mr. MINETA. In our bill last year that we had introduced, Mr. Gilchrest and I had worked on it principally in the area of nonpoint source. We really had delegated that through watershed management planning to States. We were trying to stay away from mandates. We didn't really say—we said the States ought to be doing this. There is no cookie-cutter approach in, let's say, Delaware as compared to California as compared to Nebraska that ought to be applied, but that each of the States ought to be able to do this.
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    One of the bones of contention was enforcement. I was wondering, does NGA take the position or is there a position of NGA relative to enforcement of their own then-devised watershed management plans?

    Mr. TULOU. To be honest, I am not sure whether we have a specific policy statement with regards to enforcement. Our position is very supportive of the basic concepts that you have mentioned of providing basic flexibility to the States and I would emphasize localities in terms of watershed management.

    Speaking for myself, I think the critical players there, frankly, are the localities and the types of decision they make, particularly with regards to land use, that in cumulative fashion really do dictate the quality of the water shed and the health of the fish and the health of the wetlands and the rest of the issues that we are concerned with.

    On the issue of enforcement I don't know whether we have formulated a formal policy on that.

    Actually, I am informed that the NGA policy is that voluntary measures should be emphasized in advance of any formal enforcement mechanism that might apply.

    Again, the overall problem is that you do have upstream, downstream jurisdictions, particularly where they do involve a couple of different States. We may find in practice there may be some difficulties.

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    The key, though, in putting together effective watershed management programs is getting people to the table and defining their problems and working together in the first instance; and I think that is going to be crucial, regardless. Trying to enforce is somewhat, by definition, a more expensive proposition. And if we can agree on the problems and working together in solving them, that might be the most efficient way of going about it.

    Mr. MINETA. In addressing nonpoint source pollution, in your testimony you talked about a reasonable time frame being roughly—being 15 years. I believe it was yours—

    Mr. TULOU. I don't believe that was my statement. Mr. Mineta, I don't believe that was in my statement.

    Mr. MINETA. I guess that was in some of the things that we were hearing last year, I should say. Fifteen years was often talked about as a reasonable time frame of achieving desired water quality goals.

    Do you have any ideas, thoughts, about whether 15 years is a reasonable time period?

    Mr. TULOU. It is a tough question. And I think that it might be a very reasonable time frame for some States. It might be a more difficult proposition in others.

    Again, when we talk about watershed approaches and nonpoint source pollution management in general we are talking about a very complex situation. We are talking not about discrete discharging but, essentially, human behavior and practices and how people manage their personal property.
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    And, for that reason, the complexity, and because we are dealing with people's practices, it is appropriate to think in terms of longer terms for success. Clearly, the nonpoint source pollution problem is our outstanding challenge in terms of clean water.

    I think that, to the extent we are able to get the parties to buy into the solution, that we are looking at a success that will range for decades, centuries. So if it takes a little bit more time up front—and particularly working with the localities, the businesspeople, the farmers, the urban areas—that perhaps that investment up front will yield some results that will be very gratifying over the longer term.

    Mr. MINETA. I have got the feeling that people didn't want us to do it so we said, okay, let the States do it. And the governors said, hold it, I don't want to be put in the position to tell the farmers not to farm within 100 feet of the river because of pesticides, fertilizers or whatever that might go into the river.

    And so, you know, we are really torn as to how do we move ahead when governors say, hey, we want flexibility. We don't want mandates. So I said, okay. Wayne and I came up with this approach. We will turn it over to the States on a watershed basin basis. And the governors said, oh, no, no, no. We don't want to be put in that position.

    It seems that we really do have to come to terms on this issue.

    Mr. TULOU. I would agree with that statement, and we would be more than happy to work with the committee and subcommittee in developing the appropriate way to address the watershed management issues.
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    Mr. MINETA. Thank you.

    Mr. GILCHREST. Thank you, Mr. Mineta.

    Mr. Tulou, you made a comment—and to a large extent I think this is a workable idea—of voluntary compliance in the area of nonpoint source pollution. Would you agree and do have you any suggestions about incentives for those voluntary compliance—incentives to encourage people to do those things?

    Mr. TULOU. Well, I think the first thing we have to do in this partnership that I have been talking about is making sure that we clearly define what the problem is in the first instance to the satisfaction of farmers, to the satisfaction of farmers who might otherwise want to put more fertilizer on their lawns than is necessary and in terms of the other members of the watershed community.

    I think that is the key first issue, is rather than go forward and prescribe the solutions let's make sure that the problem is identified correctly in the first instance.

    Mr. GILCHREST. Would you say that many of the problems have been identified as far as, let's say, agriculture is concerned, buffer zones and no-till farming, a whole range of issues that can be implemented in the agricultural community to significantly reduce the problems of runoff?

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    But there are other areas besides—and you mentioned the other areas. And I apologize for interrupting, but I just wanted—

    You talked about voluntary compliance to a full range of nonpoint source pollution. But nonpoint source pollution is not only ag runoff or runoff from somebody's backyard. It is also—I guess we could say it is air pollution.

    And you also mentioned the fact that we need to change people's behavior. And maybe if everybody didn't drive for a couple of days a week we could clean the air up a little bit.

    And then you mentioned the idea of really wanting to meet these standards by watershed management cooperation with State and local and interstate and Federal Government and all those things. But I sort of picked these things up as a schoolteacher.

    You said that watershed management is really simple, and it is not complicated. However, I would like to think that as well. But if you look at cumulative impact of development, which does in essence add to point source, nonpoint source, we see increased traffic which adds to more particulates in the atmosphere. We see a range of problems with nonpoint source pollution from backyard agriculture, more roads and streets and more people.

    If we are going to approach these things it would seem to me we have a simple watershed management approach, and we really have to deal in a very comprehensive way, a very broad-minded way, to see all of the things that bring the pollution to the water. And to a large extent a lot of that does come from the air.
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    Mr. TULOU. Well, the point I would make there is that, certainly in dealing with the watershed approach and the way we are approaching it in Delaware, to say there is no discrete way to deal with this issue.

    The problem that we have with the existing Federal mandates is that we looked at various media—the air, the water, the land—and we said this is how we are going to fix that problem, often overdoing that in the history of environmental legislation we have kicked the problem over to another media, and then we have to come back and address that and buck it somewhere else.

    What we are quickly finding out is that, organizationally, you can't take a Department of Natural Resources and deal with environmental problems completely within that jurisdiction. You cannot take care of watershed problems by just picking out the Superfund sites along that waterway and say by investing $40 million or $50 million in each of those we are dealing with the environmental problem. We are not.

    We have to look at all the contributors, whether the industrial sites or the farmer community or people putting fertilizer on their properties—whatever it is—and get those people working together without a lot of the administrative and bureaucratic barriers that logically are there but now are impediments to getting the job done. Absolutely recognizing that these problems cut across all of those boundaries of Superfund, clean air, clean water and everything else.

    Mr. GILCHREST. And you also made a comment about sound science. And I think that is a dimension that needs to be added to the equation because these multi-sources of pollution creates multidimensional problems when you deal with people's behavior.
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    And I guess the fundamental at—I am interested to hear what Mr. Baker's team is going to bring to us today. But the fundamental key, I would think, the solution to the problem is I think people getting down and talking about it and agreeing up front that we are going to have to be flexible and we are going to have to prioritize because this rigid control—command control system is not going to work for too much longer, and the resources are very limited.
    Mr. TULOU. And the sound science comes in right at the beginning. It is what will provide us with the compelling statement of the problem. And working with the various communities that are involved in getting a buy-in into the problem.
    One of the problems that we have had is that somebody—and it has generally been a State or Federal agency—has defined the problem and defined the solution before going forward for public comment, and that is already a losing proposition.
    But if you state the problem as a technical agency has identified it with these group of people, based on sound science, as sound as we can make it—and one point I would make there is that sound science is an expensive proposition—but as best we can identify the problem and identify why that particular stakeholder ought to have an interest in solving that problem, the solutions flow relatively easily.
    Mr. GILCHREST. We appreciate you coming from Delaware. And tell the Governor we all said hi.
    Mr. TULOU. I told him I would be meeting with you today, and he sends his best.
    Mr. GILCHREST. Mr. Horn.
    Mr. HORN. Let me just ask you to furnish the material I have asked the mayors and the cities to furnish and that is the horror stories that relate specifically to the act. I would like to get as many of those—so if it is something that is in the act where we made a mistake, we ought to have the guts to correct it, or if a bureaucracy has carried out the act and misinterpreted what Congress meant.
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    Not that Congress is always clear, because they are not. Little euphemisms paste over differences. And I don't doubt that a civil servant with great integrity has difficulty figuring out what we meant. And we ought to get that clarified.
    I am also interested in the Governors' suggestions based on actual projects of privatization that can be applied in this area which might provide some incentives to getting something done. The facts of life are there is simply not enough money at any level of government to solve all these problems the way we are going.
    And we all agree we want clean water. So how do you get it? Well, we are going to have to have some innovative ways to get it, not just begging each level of government on upward. And that includes local citizens taking it seriously and putting up the funds one way or the other.
    What I would also like to know at the Governors' level is the difficulty that the States have had with the permitting process of all Federal agencies involved.
    We talk a lot about the Corps of Engineers, about EPA and so forth and the problem of getting a consensus sometimes between them in terms of how the bureaucracy works. We need to know—and if we have to set a time limit so that if they have not acted, the permit is automatically granted.
    And we have just got to do something to end this delay, which means millions of dollars to people if they are private investors when they cannot get a permit to act and it takes a year when there is really no excuse for it to take a year.
    And we had one case at one agency where the regional head they had—six years it took them to grant this permit. And there had been three different regional heads, and every time a new one came in they looked at the whole case again. This is nonsense. And the Federal Government—that is a Federal case—the Federal Government will just have to do a lot better.
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    So what I would like laid on the record and on the privatization thing—since I am going to be holding hearings on this in Government Reform and Oversight, I would like you to send me a copy of what you furnish the Chair so we can follow up and use those examples.
    Mr. GILCHREST. Thank you, Mr. Horn.
    And thank you, Mr. Tulou, for your testimony.
    Mr. TULOU. Thank you.
    Mr. GILCHREST. We will now continue, and I apologize to Mr. Baker and your members. We will continue with Mr. Zimmerman. No? Mr. Llewelyn? Whoever you would like to give the testimony.

    Mr. LLEWELYN. Thank you, Mr. Chairman and Members of the committee, for the opportunity to speak to you.
    I would like to summarize our positions related to regulatory reform and focus on two very specific concerns in the NPDES or the National Pollution Discharge Elimination System permitting process that the States manage.
    The NPDES permit process and program has been one of the most successful elements of the Clean Water Act. Since the act's inception, States have addressed the most egregious and visible point source problem through the management of municipal and industrial permits.
    Going back to 1972, we began with focusing on the most obvious problems: raw or inadequately treated sewage, large industrial facility waste. We then moved into dealing with smaller industries and smaller municipalities by focusing on secondary treatment which also addressed nutrient problems in terms of fertilization of our rivers and lakes. We dealt with multiple point source discharge situations in rivers and further treatment needs that were necessary to meet water quality standards.
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    Then in the late 1980s and 1990s we have begun the complex and difficult task of addressing toxic pollutants through the NPDES permit program. At the State level, the number of permits that we have managed has grown over the years. In my State of Washington we have gone from roughly 1,000 permits five years ago to managing almost 4,000 today, and the staffing levels have been relatively stable.
    The technical complexity of the issues we are dealing with has also evolved over the time; and the administrative processes, both at a State and Federal level, have caused a delay in the efficiency of getting permits out the door. The result of this for many States is a backlog of permits.
    Many of the current permits that we are dealing with are third or fourth generation permits since the Clean Water Act's inception; and a vast majority of these are actually meeting their effluent limitation, the water quality standard downstream of their discharge is being attained, and they have sufficient capacity to meet their needs and future projection of growth.
    Therefore, the States would request that the Clean Water Act be amended to allow, in appropriate situations, ten-year permits rather than the existing five-year permits when they only need to actually take a permit action is in a simple administrative reissuance of that permit. We believe that this action would allow us to free up resources to address more higher environmental risk permits that we are not able to get at now and also to allow us to shift some resources into nonpoint source pollution control as you have heard today, which is, for many States, a very important and most pressing water pollution control issue.
    The second issue I would like to quickly summarize, as we have talked about today, is the stormwater program. State pollution control administrators are calling for a six-year moratorium on phase two of the stormwater provisions. Phase one of the stormwater program addresses large municipalities over 100,000 in population and targeted industries. Phase two, as currently envisioned in the act, would require statements to address the cities under 100,000 in population and a very large universe of small businesses and commercial establishments.
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    We believe that through an inclusionary process managed by EPA with the regulated community, States and other interested parties, it is time for us to reevaluate and redefine the stormwater provisions of the act. We would like the opportunity to take time to think about the lessons learned as we have dealt and struggled with phase one of the stormwater program to evaluate the necessary tools that are needed to address the phase two sources and to also realistically look at the fact that there are probably a number of phase two discharges that could be better managed through nonpoint source programs or watershed programs rather than the NPDES permit as a tool.
    Other issues that we would like to have addressed include the ability for States to delegate permitting to willing local units of government to allow local units of government to permit the construction phase of stormwater, since many local governments do have a permitting program in place and we can avoid that duplication.
    And, finally, we would like the act and the administrative procedures inherent in the act to be more flexible with the funding sources to manage our stormwater programs so that the funding is not tied to whether we are managing stormwater through a permit or we are managing it through a watershed program. We believe that stormwater should be managed holistically, and the funding sources should be flexible.
    I would quickly like to state that we believe that monitoring programs are essential for successful water quality programs managed by the States. We believe that monitoring is the foundation of the science behind the act. It allows us to establish trends and the status of water quality and also to measure the effectiveness of not only the act and the programs inherent in the act but the technologies used.
    Therefore, as you will see in our testimony, we are supporting the recommendations of the Interagency Task Force on Monitoring, which has recently completed its report and was cochaired by USGS and the EPA. And we are also very concerned that if the USGS budget is cut or eliminated that a substantial portion of State water quality monitoring programs would be impacted, and we would need to find supplemental funding to provide that foundation.
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    Thank you very much.
    Mr. GILCHREST. Thank you, Mr. Llewelyn.
    Mr. Larson.

    Mr. LARSON. Yes. I am here today to report to you on the SRF program.
    On a national level, this program is a resounding success; and this program should be reauthorized. The Federal Government has awarded capitalization grants for $11 billion to all 50 States. This money has been, in turn, matched by States and leveraged by States and then lent out at low interest rates for projects to improve the Nation's waters.
    In turn, as loans are repaid the money is revolved and lent back out to fund additional projects. This program provides a permanent State funding source, is more efficient and innovative than construction grants and rewards initiative and compliance rather than rewarding delay.
    This successful program deserves continuation and improvement in three particular ways: First of all, there is not sufficient capitalization to address future clean water needs. There is difficulty that the towns and the cities are having in receiving funding currently, and also the SRF does not currently address fully the needs of small communities.
    As far as funding is concerned, ASIWPCA estimates that $200 billion is needed to address requirements in the present Clean Water Act. SRF has only been partly capitalized to this date to meet these needs. To continue to capitalize a fund that addresses all requirements, including point source and nonpoint source needs, will require $2.4 billion annually through the reauthorization period.
    A special need that has been difficult to address for current SRF is small community needs. Over the next 10 years communities will less than 10,000 in population will need $10 billion.
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    In Wisconsin in the last four years, we have funded 70 projects for communities less than 3,000 in population. While many communities are financially capable, we estimate that about half nationally cannot afford the debt service associated with an SRF loan, even a subsidized SRF loan.
    We need changes to the program to improve small community access, including a supplemental authorization for the SRF for small communities, extended loan terms of up to 40 years for small communities to repay their loans, blended principal subsidies based on State-established affordability criteria, federally funded State technical assistance programs in the SRF structure and, finally, program reforms including Title II exemptions for small communities.
    But program reforms should not be restricted only to projects for small communities. Other reforms need to be enacted to improve the operation of the SRF program.
    They include such items as elimination of construction grants programs which increases the cost and construction time of important projects; providing States a funding mechanism within the fund itself for administration after capitalization grants end; improving the need survey methodology so it can be produced; instead of a two-year cycle, a four-to-five-year cycle; and allowing loan eligibility for land and easement acquisition.
    In summary, the SRF has been a very successful program, and the Clean Water Act should be revised to increase State fund capitalization, allow greater access to small communities and streamline and remove requirements that were originally designed for construction grants.
    Thank you.
    Mr. GILCHREST. Very efficient. The green light is still on.
    Mr. Zimmerman.

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    Mr. ZIMMERMAN. Thank you, Mr. Chairman.
    Let me begin—I would like to begin my remarks today by briefly outlining the framework for nonpoint source management in the current act.
    Basically, the 1987 amendments set about to require that States conduct an assessment of their waters and identify the significant sources and causing impairments and identifying potential contributors. The second part of that was that the State would then formulate a management program that would go about to abate or remove those impairments.
    There are some fundamental problems with that structure.
    First of all, the structure that occurred under 1987 was largely based on a demonstration program. It was a four-year demonstration program that did not fully recognize that long-term need for implementation and the long-term requirements for abatement of nonpoint source pollution.
    Second, it also—the funding commensurate with the objective for clean water did not follow, and it caused delays in development. States have since that time institutionalized nonpoint source management and programs within their States, and it is important that we continue with this effort.
    As you know, a majority of our existing water quality problems stem from nonpoint source pollution. Reducing nonpoint source pollution demands careful attention be paid to managing land uses to protect water quality. Land use decisions affect large segments of society in many ways. Because nonpoint source control must take into account local economic and geographic conditions, States should retain primary responsibility for nonpoint source pollution programs.
    We urge Congress to recognize that long-term commitments of resources are required to successfully manage nonpoint source pollution. Short-term water quality benefits are difficult to attain, and the initial program's success needs to be more fundamentally based or judged on the capacity and the framework that is established at local and State level for the long-term commitment.
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    Achieving all these objectives for nonpoint source will require that we work with various levels of government, and it will require coordination and cooperation. That also will require that the funding sources not just within the Clean Water Act be brought to bear, and it will require that the importance of meeting water quality goals will need to be recognized, both within EPA but also in the States and also in other agencies.
    I would like to begin also on my suggestions for formulating the reauthorization of the act by suggesting that the State management programs need to be built on the foundation that nonregulatory initiatives represent the approach most likely to succeed in achieving the objectives of the act. Changes in the act are needed to assure that resources are used efficiently and effectively to achieve environmental results.
    Changes should address the following: U.S. EPA should be required to establish the program's basic building blocks in cooperation with the States and other Federal agencies. Components of that would be improved water quality criteria information on best available management practices, monitoring techniques and proven State mechanisms for implementation.
    The second component would be that we need a strong Federal consistency with State management plans. Many States across this country—particularly in the west, the Federal Government is a large landholder, land manager. And it would be difficult, if not impossible, for States to meet water quality objectives without full Federal partnership.
    Third, there needs to be adequate funding. As I mentioned earlier, the program has suffered from inadequate appropriations. We need to recognition the task ahead of us.
    I guess now most fundamentally I would like to suggest that the structure of the program needs to be based on a phased iterative management strategy where States provide progressively stringent approaches, beginning possibly with implementation of BMPs to address impaired uses within a reasonable time and then going beyond that as we assess the effectiveness of those BMPs we move beyond that to meeting our water quality goals.
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    I would like to also emphasize the earlier remarks where we underscored the need for monitoring programs, the efficacy of programs to identify the relationships between the actions that we prescribe or that are taken at the local level and the resultant water quality improvements.
    I would like to defer my remarks to the written testimony. We have laid out a program in the written testimony which speaks to the Federal role which would be focused on improving public awareness of nonpoint source, developing good science and developing economic incentive options that could be used by States.
    States then are responsible for using information available to them to select the goals, identify watersheds and identify an appropriate mix of regulatory and nonregulatory mechanisms and, hence, establishing schedules from that point.
    Beginning with that, we then would allow an appropriate period of time for the implementation and success to be demonstrated and then reevaluate that mix, as I have suggested earlier, in a phased or iterative approach.
    Thank you.
    Mr. GILCHREST. Thank you very much Mr. Zimmerman.

    I will yield the Chair now to the Chairman. I guess we will start the questioning.
    Mr. BOEHLERT [presiding.] Thank you, very much, Mr. Gilchrest. I will have questions in a moment, but I will go with Mr. Borski. Then I will have questions.
    Mr. BORSKI. Thank you very much, Mr. Chairman.
    Many of your recommendations center around the needs of the State program people, the people who implement the programs. As you know, Congress is preparing to submit to the States a Balanced Budget Amendment. If the Balanced Budget Amendment is adopted, it is likely that all domestic program accounts face up to a 30 percent cut.
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    Obviously, not knowing exactly how each individual program is going to fare, we cannot tell for certain, but a 30 percent cut across the board in all domestic spending programs is reasonable to assume if we are faced with such a Balanced Budget Amendment. Where would that leave the Federal and State clean water programs?
    Mr. BAKER. I think one of the points we are trying to make is that there is one particular pot of money that historically has been underfunded—and it is actually a relatively small amount of money—and that has been the Section 106 program which really funds the State operations. That, in total, has been $81 million at max and has been basically at that level for a number of years.
    And so what we are looking for is we need to have a balance between the implementation money and the money that it takes to operate those programs. And we are now in a situation where—for example, the 1987 act had a number of requirements and because we didn't get any increase in the operation costs we have not been able to fully implement the 1987 amendments, even though we strongly support the goals associated with that.
    So I don't think what we are talking about in terms of State staffing or program money is large amounts of money. However, we recognize the issues that are going to be there for balancing the national budget. So the monies are relatively small but also critical.
    The other point is that there are a number of pots of money. In my State right now we have about 45 different Clean Water Act grants to operate the programs. We get a separate grant for storm water and municipal. That is chewing up resources at the State level.
    A number of things that we are talking about in streamlining will provide us with more State resources to do the job. We spend too much time in phone calls with the EPA as opposed to phone calls with the people that we need to work with to solve the problems. And so we are hoping that we can get a balance of some additional costs and some relief from what we call the burdens associated with the current structure of the act.
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    Mr. BORSKI. Anyone else?
    In addressing nonpoint source pollution you advocate a reasonable time frame. None will argue with that. Of the proposals we had last year, 15 years was often talked about as a reasonable time period. Is that a reasonable time period?
    Mr. ZIMMERMAN. I would like to preface my remarks by saying that in my State, in studies that we have done, there are some problems which certainly can be addressed within a 15-year period. There are also those which we know through geological studies will take decades to remove and to be abated.
    So I think we need to keep it in context that we need some sort of time frame to kind of help estimate costs, planning and move forward. But in terms of—and maybe it ought to be couched in terms of a goal. But we ought to be realistic, that we know that there are problems out there that are nonpoint source problems that are going to be there for decades, and we cannot just—regardless of the amount of money—so we can't just wish those away.
    Mr. BORSKI. What is your assessment of the likelihood that EPA and the States will reach an agreement on the major issues relating to the control of nonpoint source pollution?
    Mr. ZIMMERMAN. The States—ASIWPCA and the coastal States are currently working to look at administrative resolution and implementation of 6217 and the coastal zone amendments and that program. We are very hopeful. We are going to have to wait and see in terms of the resolution of administrative resolutions under that context, but we have had recently a good amount of effort in terms of trying to meet the States's needs by the agency under nonpoint source.
    Mr. BORSKI. No further questions at this point.
    Mr. BOEHLERT. Thank you.
    EPA is telling us that the construction needs for treatment works over the next 20 years will be $136 billion. Can you guesstimate what it would cost for us to do in that time frame on nonpoint source pollution?
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    Mr. ZIMMERMAN. That is almost an impossible task to try to estimate those costs. In some cases we need to further—as was suggested earlier, we need to further characterize and understand the problem before we prescribe the solution. And in some cases we think there is a problem. We don't understand necessarily the relationship between that problem and the land uses or other activities within a watershed. So it is very difficult to estimate at this point.
    This becomes another basis for looking at this problem on a longer term and over several reauthorizations of the act, hopefully.
    Mr. BOEHLERT. Is there any dispute at all that there is a compelling need to address nonpoint source pollution? I mean—and probably the biggest bang for the buck is going to come from there, wouldn't you agree?
    Who would like to share with me some thinking about watershed management?
    I would have a particular situation that I am kind of concerned with because I happen to represent the watershed area for New York City, and I think the whole Nation has to be concerned with what happens there. They are faced with a situation where the city is building a $6 billion to $8 billion treatment work. And they don't want to do that.
    I understand—of course, they don't have $6 billion to $8 billion sort of hanging around. And the people in the city will say the solution to the problem is not to build the water filtration plant. The solution to the problem is to take the watershed area and tell them no more agriculture and no more development. The people in the watershed area don't think that is a very good idea.
    How do we deal with it? I think the best way to deal with it is on a watershed management concept, but I would like to have the thinking.
    President Baker. You don't mind me calling you—I tell my friends, I know the President.
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    Mr. BAKER. It is not the greeting I get when I return to Wisconsin.
    Let me start out by saying that—a couple of things, Mr. Chairman, that we need to do.
    First of all, we need to change the act so we can do more watershed management programs. There are too many things in the act that require us to focus on individual categories and don't allow us to take that broader look. So a number of States have tried to move in that direction, but we are continually pulled back to the sort of hard categories that exist in the act.
    And so we would like to, first of all, get the opportunity to move in that direction. And we know from experience that we are not going to solve the nonpoint source problems in this country unless we do more watershed work. There is just no question. You can't approach that problem on a site-by-site basis. You have to look at a geographic area in some cases in order to come up with solutions.
    And, also, if we are going to have limited resources, which you clearly tell us we are going to have limited resources, a watershed program is going to tell us where we are going to get the most benefits for the dollars. We want to be able to target those dollars to the recommendations that come out of those watershed reports.
    If a watershed report says let's go over the phosphorus issue in the rural area, we want the ability to be able to do that. We are not suggesting that we do it without some review of EPA or consultation with EPA. We are not suggesting that there is not any accountability with that. Right now, there seems to be so much accountability and so many bureaucratic things with the act that we cannot use common sense.
    Mr. BOEHLERT. Is there a watershed that is a model of how it could be done? Do you know of any in America where they are doing it the right way?
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    Mr. BAKER. I think we could probably give you in each of our States an example of a watershed project that we are
    doing.
    Mr. BOEHLERT. That is working?
    Mr. BAKER. That is working. They are different from State to State. They are different sizes.
    Mr. BOEHLERT. As they should be. You don't dispute that, do you? We cannot have a one-size-fits-all dictated from Washington. That is about the last thing you would want.
    If you would share some information on that. I am determined to do what I can to make the New York City watershed a model. But every one is going to be different, and we understand that.
    Mr. LLEWELYN. In the State of Washington we have—for several years have had various types of watershed programs. And for a while we did, at a State level through the Puget Sound water quality process—tried to impose a cookie-cutter process where every watershed program was designed the same. And we found that every watershed had a different issue. And by trying to have a very static planning process, I think a lot of people were excluded or chose not to participate because they felt that the issue that they were concerned about really was not the agenda.
    On the eastern part of the State, we are dealing with areas of seven to nine inches of rain a year. The primary problems relate to water quantity, where are we going to get the water and the relationship to agriculture.
    In the western part of the State we have areas with 17 inches of rain a year, and the issues are salmon. And those watershed processes have a different agenda and suite of stakeholders that want to be at the table.
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    The bottom line is that we have learned that the States need to be a facilitator of the process to provide technical information, not to come in and impose a type of a mandate in terms of how to actually run the system.
    And the beauty of all the watershed programs I have been involved in in the long run, in my opinion, is that it is the education of the people who sit down and finally try to tackle the problem that creates the successes. The more people talk to each other and understand what their problems are, the more they relate to the local water quality problems. There is more investment there in thinking that they are participating. We try to show that this is your watershed process; and we are here to help, not to run the show.
    Mr. BOEHLERT. Is it easier to deal with your State agency or the Federal agency? Give me an honest answer and tell me why.
    Mr. HORN. Whisper it in our ears.
    Mr. BOEHLERT. We will give that to the President.
    Mr. BAKER. I would vote first for the State agency. But I think that when we talk in our testimony we are really trying to redefine EPA's role. And we think that where people have problem with EPA is when you talk about local problems that need local solutions. And we need to invest in them with the watershed program and empower them to solve those problems. EPA needs to be out of that process. They need to be out of the how and should only be focusing on the solution and the goals of what we need to accomplish under the Clean Water Act. I think EPA is respected in terms of an agency at the local level, but they lose that respect when they get in, and they become too prescriptive on process.
    Mr. BOEHLERT. Micromanage.
    Mr. BAKER. That is where we think we can be better facilitators, and we understand the local realities that are going on in a particular case.
    And, generally, I think we have strong relationships with municipalities and rural areas to make those things happen, and we do not want to repeat the lessons or the problems that we have had with the Federal agency at the local level. We want to provide them with that opportunity to do it.
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    And the example I would give in Wisconsin on a project—and I will not go into details—Black Earth Creek, basically we got out of their way. The way we helped them is provide a framework. We provided some funding. We have given them some goals and some technical assistance. They come to us when they need help, and they come to us on a regular basis. The biggest complaint I get from them is that we don't give them enough attention. One of the reasons is because they are doing such an outstanding job of managing their watershed.
    Mr. BOEHLERT. Mr. Gilchrest.
    Mr. GILCHREST. I think Mr. Bateman arrived before I did. I will yield to Mr. Bateman.
    Mr. BATEMAN. On the contrary. I am still in the listening mode. I will yield to you.
    Mr. GILCHREST. I think Mr. Horn was here before I was.
    Mr. BOEHLERT. What is this, a lovefest?
    Mr. BOEHLERT. Mr. Horn?
    Mr. HORN. Thank you very much, Mr. Chairman.
    I think you all ought to be really congratulated. I have read hundreds of statements in various jobs over the years, and I think this is the finest organized presentation I have seen in writing. And the fact that you then divided it up, I think, was really an excellent job.
    What I would suggest is that you think about what are the 10 top things you would really like to change in the law as we go through a hearing and markup process and give us some of the legal language you would like to see in terms of amending the law. What is a word here or a word there that could make your lives more fulsome in getting the job done on the firing line?
    You are down there living the problem every day. We are here. We go to our districts.
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    If we have got water responsibilities, obviously, we meet with those people from time to time. But you are in the best position to give us an overall picture of how this really works. And I think any time Members of the House see witnesses that are down there at the firing line, we want to get your advice. And that advice needs translating from theory, experience, into specific legal language. If you could do it and furnish it to a lot of us—the Chair, obviously, will take the lead in the markup, but I think we would welcome it.
    Mr. BAKER. Thank you.
    Mr. BOEHLERT. Thank you, Mr. Gilchrest.
    Mr. GILCHREST. Thank you, Mr. Chairman.
    Mr. Larson, you made a comment that the State revolving loan fund was much more efficient than grants for construction. Could you elaborate on that?
    Mr. LARSON. Yes, basically, it is efficient for a couple of reasons. It is efficient from the State standpoint in that we get more money out through leveraging the program with our State match. We can get more money out to get projects moving.
    I think another great aspect of the program is the fact that we can refinance projects. So that means that communities don't have to wait around like they did under the construction grant program to move ahead. That is in the program as it stands now.
    What we have seen from that is that, under the construction grants program, we have seen projects that take approximately seven years. We have gotten that down to five years. We think we can do better on that, but from the inception of the project to actual construction and getting it operational I think that is the significant advantage of the program.
    I think, at the same time, we can provide municipalities with excellent subsidies. Perhaps not as great a subsidy as under the construction grant, but many of the States provide subsidized loans and after you factor in what it would have taken in the commercial market to match the construction grants program, the subsidy is very significant and very important to moving ahead on a program.
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    Mr. GILCHREST. I also would guess that in areas—there are very small rural areas that couldn't even pay back a noninterest loan. There would be some flexibility there as well?
    Mr. LARSON. That is an area we would like to see some work in the Clean Water Act reauthorization. I mentioned the particular aspects that we would like to change, but I think that is an area that we are very concerned about, also.
    Mr. GILCHREST. Thank you.
    Mr. Llewelyn, you mentioned repermitting some of the statutes in the act from five years to ten years. Could you give me an example of some things that you would like to see go from five years to ten years as far as the Clean Water Act is concerned?
    Mr. LLEWELYN. We have a lot of medium- to small-sized municipalities who are meeting secondary effluent limitations. They don't have a lot of industry discharging into their system. They have enough capacity in their system now, and they are not growing. And so they are meeting every condition we could ask them to do.
    When their five-year permit comes up, currently, we must reissue that permit, which simply is an administrative process, when from an environmental standpoint there is nothing that needs to be changed in that permit. That reissuance process takes time and resources that I would like to put into dealing with our other problems. And so I think that a ten-year permit would allow us that flexibility. If something were to change in year seven, we have a reopening provision that we could jump back into it. We have a lot of situations where it costs us time unnecessarily.
    Mr. GILCHREST. You make a distinction between the large municipality to a small municipality. Even if the large municipality was not at full capacity? Is there any distinction there between the permitting?
    Mr. LLEWELYN. No, I was using more specific examples that are real. If our large municipalities were in the same position where they are meeting their limitations and do not forecast any capacity problems or are not getting any new industries in, I certainly would apply the same principle to it.
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    Mr. GILCHREST. And you made a comment that some of this money could be targeted for more nonpoint source problems. You mentioned a six-year moratorium on phase two. And I suppose you are looking at some type of moratorium on the full implementation of phase one. And between—during the six-year moratorium I would assume then that the EPA would simply begin working with the States and the local government to find ways to bring them into compliance.
    Mr. LLEWELYN. That is correct.
    I think that the phase one—the issue of phase one right now is not so much the fact that we need to continue to have some progress within the permitting context, but the question that has been raised by the dischargers themselves in my State is that the ultimate attainment of water quality standards, the literal end of pipe standards for these large stormwater dischargers we think is extremely difficult for them to meet.
    And so while we are not asking for a complete shutdown of the phase one program, I think the issue that is concerning the dischargers is the liability of meeting an effluent limitation when they know that they cannot meet it.
    In the context of this phase two moratorium we should also look at the broader questions of stormwater attainment for all dischargers.
    Mr. BOEHLERT. Thank you very much and thank all of you very much. Mr. President, good to see you.
    Our third and final panel for this hearing consists of Paul Marchetti of the Council of Infrastructure Financing Authorities; Daniel Koplish of the Pennsylvania Municipal Water Quality Coalition, Pennsylvania League of Cities and Municipalities; Edward Wagner, Association of Metropolitan Sewage Agencies; Brian Ramaley, Association of Metropolitan Water Agencies; Doug Harrison from the National Association of Flood and Stormwater Management Agencies; and James F. Stahl, the California Association of Sanitation Agencies.
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    Mr. Bateman.
    Mr. BATEMAN. Thank you, Mr. Chairman.
    Mr. Chairman, I want to make special note of the fact that Brian Ramaley is a constituent and neighbor of mine and welcome him especially before the committee. He has 20 years of experience in managing, planning, design, operation, function and maintenance of water supply. He is the Director of the Department of Public Utilities in my home city of Newport News, Virginia.
    And I am very proud of the fact that that very small city, 70-some years ago, started a municipal waterworks which has grown to where it is the major regional supplier of water for its surrounding neighbors and has done an outstanding job. And the operation continues to be extremely successful one.
    We are very proud of Brian and what his predecessors have done. I want to welcome him to the committee. Unfortunately, with the vote that is coming and a meeting in the office, I am not going to be here to hear your statement, but it has been read and absorbed.
    Mr. BOEHLERT. Thank you.
    For the purposes of an introduction, I would like to recognize Mr. Horn.
    Mr. HORN. Thank you very much, Mr. Chairman.
    I would like to present to the committee Mr. James Stahl, who has a very rich and beneficial experience in this area. He has been a member of the engineering staff of the various sanitation districts of Los Angeles County, which is one of the world's largest urban areas, and has had 26 years' experience in this area. He is now president of the California Association of Sanitation Agencies. He has a very interesting background educationally, a graduate of civil engineering of Loyola, and I notice you have your advanced degree at Stanford 10 years after I got mine, which means you are a lot younger than I am. Welcome. Glad to have you here.
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    Mr. BOEHLERT. Not any more vigorous, I am sure. For purpose of an unanimous consent request, Chair recognizes Mr. Borski.
    Mr. BORSKI. Thank you, Mr. Chairman.
    Unfortunately, I was unavoidably detained in another hearing this morning but I would ask unanimous consent my opening remarks be made a part of the record at the appropriate place.
    Mr. BOEHLERT. Without objection.
    Gentlemen, your opening statements will be made a part of the record. I ask you to summarize. As you have observed, we have a call of the House now for a vote. I would ask you to keep your opening statements to five minutes and then we will have ample time for questioning.
    What I would like to do is get Mr. Marchetti in first for your statement, if you could keep it around five minutes, then if you would take a brief pause we will dash over and vote and come right back. Mr. Marchetti.
TESTIMONY OF PAUL MARCHETTI, PRESIDENT, COUNCIL OF INFRASTRUCTURE FINANCING AUTHORITIES (CIFA); DANIEL KOPLISH, MANAGER OF WATER RESOURCES, PENNSYLVANIA MUNICIPAL WATER QUALITY COALITION, PENNSYLVANIA LEAGUE OF CITIES AND MUNICIPALITIES; EDWARD O. WAGNER, DEPUTY COMMISSIONER, NEW YORK CITY DEPARTMENT OF ENVIRONMENTAL PROTECTION, ASSOCIATION OF METROPOLITAN SEWERAGE AGENCIES; BRIAN L. RAMALEY, DIRECTOR, DEPARTMENT OF PUBLIC UTILITIES, ASSOCIATION OF METROPOLITAN WATER AGENCIES; DOUG HARRISON, GENERAL MANAGER-SECRETARY, FRESNO METROPOLITAN FLOOD CONTROL DISTRICT, NATIONAL ASSOCIATION OF FLOOD AND STORMWATER MANAGEMENT AGENCIES; AND JAMES F. STAHL, ASSISTANT CHIEF ENGINEER AND ASSISTANT GENERAL MANAGER, SANITATION DISTRICTS OF LOS ANGELES COUNTY, CALIFORNIA ASSOCIATION OF SANITATION AGENCIES

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    Mr. MARCHETTI. Thank you. I will be brief. I wanted to thank, Mr. Chairman, and the committee, for the opportunity to be here. I am Paul Marchetti, Executive Director of the Pennsylvania Infrastructure Investment Authority, and I also am here, though, representing the Council of Infrastructure Financing Authorities, which is an organization of State agencies who responsible for the financial administration of the SRF financing programs.
    Basically, I would just like to make three points to the committee, all of which is in the written testimony, but one is just to mention that the SRF is a very efficient and effective way for the Federal Government to expand its scarce resources available for funding wastewater construction and environmental improvements; also to urge the committee and the Congress to reauthorize Title VI of the Clean Water Act and provide additional funding to the SRF program; and also to suggest some ways in which, upon reauthorization, the program could be improved, in our view.
    In terms of what the program has done up until now, since 1987 the Federal Government has put almost $8 billion worth of funding into the program. This money has been matched by the States in the form of State matching grants as well as leveraging, effectively doubling the capacity of the program. This has translated into, at this point, almost $12 billion worth of loans to 2,500 communities across the country. About a third of them are small communities and about 10 percent of these loans are to what we would describe as hardship communities. I think this speaks very well for the effectiveness of the program and the flexibility of the program.
    Many States are also expanding into nonpoint source activities and to other ways in which the program is being able to encompass other things besides point source, loans to point source problems.
    I would also like to point out, in comparison with the grant program, the SRF revolving loan program not only provides a continuing source of funding over time, but also is a more efficient way to provide whatever subsidy you would want to provide to encourage construction. It is much more efficient than a grant program and we believe that the revolving loan program is one worthy of reauthorization and continuance.
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    In that light, my second point simply is that EPA needs surveys indicate that for point source alone we are looking at something in the range of $133 to $136 billion. We would strongly urge that we meet those needs by reauthorizing Title VI and funding for the SRF at a level of at least $2 billion a year for the next 12 years. I should point out this would allow us to meet existing point source construction needs, which does not address future construction needs for point sources as well as nonpoint sources.
    My third point, in terms of improvements that we think could be instituted into the program upon reauthorization, we would again like to see some elimination of the costly Title II requirements that have been held over from the construction grant programs, including Davis-Bacon and other provisions, that increase the cost of projects and just do not allow the money to go as far as it might otherwise go.
    We would like to see some flexibility put into the program for addressing the needs of hardship communities. In particular, the ability to expend loans, the amortization of loans beyond 20 years, and also to provide for some principal write-down in those cases where hardship communities cannot afford to repay the entire loan, although we would suggest that there be some limitation put on that so as to protect the corpus of the fund.
    We would like to see the fund opened up to private entities in those cases where they are regulated by a State public utility commission, and also where they provide community service similar to the service that is provided by authorities in municipalities.
    We would support making land and rights of way eligible for funding. And, also, if there is a drinking water SRF created, which we also support, we would strongly urge that the funds be able to be commingled and the loans pledged to a common series of bonds, which would make bond issuance much more effective.
    That summarizes my statement. Thank you, Mr. Chairman.
    Mr. BOEHLERT. Thank you very much.
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    Now, we will have to pause because we have about 6 minutes to vote and to dash over there and come right back. Get to know each other better, solve all our problems, and when we get back we will ask for all the solutions.
    [Brief Recess.]
    Mr. BOEHLERT. We will resume. And next, Mr. Koplish. Am I pronouncing that correctly?
    Mr. KOPLISH. Close enough.
    Mr. BOEHLERT. Pardon me?
    Mr. KOPLISH. Close enough, sir.
    Mr. BOEHLERT. No, no, help me.
    Mr. KOPLISH. Koplish.
    Mr. BOEHLERT. Koplish.
    Mr. KOPLISH. My name is Dan Koplish. I am Manager of Water Resources for the city of Allentown, and I am providing comments on behalf of the city of Allentown, the Pennsylvania League of Cities, and the Pennsylvania Municipal Water Quality Coalition.
    Mr. BOEHLERT. Would you mind pulling that mike a little closer? Thank you.
    Mr. KOPLISH. I want to comment specifically on the use and application of water quality standards for the development of NPDES permits and the need for Congress to take action to direct EPA to update its water quality criteria and to ensure that they are applied in an appropriate, common sense fashion.
    In terms of discussing that, what I would like to do is perhaps provide an illustration, through Allentown's experience, of how the nonupdating of the water quality standards created a problem for Allentown, if I could.
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    Allentown runs a 40 million gallon advanced wastewater treatment plant. With the issuance of the last permit, which was based on water quality standards, Allentown received a permit which basically appeared to have limits which were totally unachievable. And, basically, Allentown met with DOE and met with EPA and indicated to them such things as our drinking water, if it ran directly from the water plant directly to a sewer plant outfall, Allentown would not comply with the effluent quality. There was not consideration given to the State of the compound which was being discharged was actually toxic or harmful, among other issues.
    Basically, we tried to get relief for the State. As it turned out, they issued our permit and basically the city of Allentown conducted a feasibility study as to what it would cost to provide treatment to meet the limits developed through the water quality criteria. Essentially, it amounted to it was going to cost us about $100 million to construct a facility, would immediately raise sewage rates tenfold, and we still might very well have a very low probability of consistently meeting the limits.
    Allentown decided then, basically, to look at the criteria themselves, to evaluate their basis, how they were developed, and what their impact would actually be on the metallic species in the Lehigh River. Allentown spent about $400,000 basically on the permit, finally received the permit, which did not have those rigid limits in it, and, basically, the point I guess I am trying to make, is that Allentown ended up spending approximately $400,000 on lawyers and experts, which should have, in fact, gone to the government. And had, in fact, the criteria been scientifically based, been up to date, we would not have had that expenditure.
    As I think I have heard here today about the cost of funding, the cost of this—think something as simple as making the criteria based on up-to-date science, being accurate, scientifically supportable, would provide funding just through the fact funds did not have to be spent for lawyers, legal assistance, and for building structures which basically we showed would provide no benefit to the environment.
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    I have provided a list at the end of my testimony of five very specific things which we would suggest that the updated Clean Water Act contain, specifically directed to water quality standards. Thank you.
    Mr. BOEHLERT. Thank you very much.
    Now Mr. Wagner.
    Mr. WAGNER. Good morning. My name is Edward Wagner, Deputy Commissioner at the New York City Department of Environmental Protection and Director of the Bureau of Clean Water. I am here this afternoon representing AMSA, whose members are the 150—more than 150 of the largest wastewater agencies in the country and serve more than 90 million people. I would like to bring in summary form our perspective on the reform of the Clean Water Act.
    I would like to highlight three primary points from the written testimony. Number one, AMSA supports Clean Water Act reauthorization; number two, there is a need for continued and increased Federal funding of clean water programs; and, number three, we feel it is urgent that comprehensive watershed management be established as a way to address future water quality solutions.
    First of all, some might ask why fix the act if it is working? And we think the act is not working as well as it must. It is not working as well as it must to respond to today's costly and complex problems; it is not working as it must to address the undeniable realities of financial constraints at all levels of government. And so the Clean Water Act should be reauthorized and renewed.
    My second point is that the need for continued Federal funding is clear and compelling. The burden on local ratepayers is evident in the report that we attached, that I attached with the testimony today. The cost of clean—it was a report we did last year as a survey of our members, and just a few facts from that report:
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    The capital needs for only six years, through 1998, for only 99 of AMSA's members is greater than $32 billion. And I would point out that this does not include the $7 billion a year that AMSA members spend on operations and maintenance.
    We would urge the subcommittee to consider AMSA's funded mandates proposal that we developed last year, which would provide $1.5 billion annually for the next 10 years in order to fully capitalize the State revolving loan program, and that any additional amounts above that would be authorized for grants to attack priority problems.
    Beyond the pressing need for local financial relief, we believe that the clean water investment must be a national priority. It is appropriate to make this Federal investment to benefit the environment and it is appropriate to make this Federal investment to stimulate the economy.
    Studies have shown that as many as 60,000 jobs are created for every billion dollars spent on clean water programs. So AMSA believes that there must be continued and increased Federal funding.
    My third point is that we must improve environmental decision-making and, at the same time, even further reduce the burden on local government. You can do this by establishing comprehensive watershed management as an integral focus of the act.
    It is clear to us that the direction of the national program must be shifted toward a bottom-up, stakeholder-driven process. We think that there currently continues to be widespread public support for clean water, but we are concerned that this support is at risk. It is at risk if we make investments that fail to yield measurable and meaningful water quality results, and we are convinced that comprehensive water quality management is a way to an improved ability to protect the environment and, at the same time, afford considerable savings to local government.
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    A few other points about comprehensive management.
    Mr. BOEHLERT. Mr. Wagner, would you summarize it, if you could?
    Mr. WAGNER. Okay, just to finish the thought on comprehensive management. If we had that framework within the act, what it should do is it should include within that framework significantly strengthened nonpoint source control, consideration of all wet weather phenomena, and an acknowledgment of the unique ecosystems around the country, such as that in the arid West that have to receive special regulatory treatment. And so comprehensive management is needed now.
    Mr. Chairman, thank you for this opportunity. We look forward to submitting additional information to the committee. We are going to develop specific and detailed recommendations at our meeting next week in Arizona, and I would be pleased to answer any questions you might have.
    Mr. BOEHLERT. Thank you very much.

    Mr. Ramaley.

    Mr. RAMALEY. Mr. Chairman and Members of the subcommittee, thank you for this opportunity to discuss reauthorization of the Clean Water Act. My name is Brian Ramaley. I am the Director of the Newport News Department of Public Utilities. However, I am speaking to you today as a member of the Association of Metropolitan Water Agencies. The association is a nonprofit organization comprised of the directors and managers of the Nation's large municipal and publicly owned drinking water supply agencies.
    Mr. Chairman, the cost of environmental compliance has steadily increased over the past several years. EPA projects that the increase in cost to local governments to meet new standards for drinking water, wastewater, and other environmental requirements will be between $19 billion and $32 billion a year between now and the year 2000, and shortly thereafter.
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    Given the needs of local communities and the mandates of the Federal Government, we believe this figure is greatly underestimated, and I think what you have heard today has supported that. For example, Newport News Water Works, which serves approximately 350,000 people, has identified a water supply capital improvement plan of more than $200 million over the next five years, of which 30 to 40 percent can be attributed to environmental compliance requirements.
    The Clean Water Act is not the Federal statute that establishes standards for drinking water quality. It is, however, the statute that governs the quality of our rivers, streams, and lakes, the source of drinking water for most Americans. I am here today to urge you to strengthen the Clean Water Act so that the protection of drinking water sources is one of the act's top priorities.
    Clean, high quality source water is essential to water supply and directly relates to the cost of treatment. Treatment of poor quality source water to reduce or eliminate harmful pollutants can exacerbate other health concerns. For example, drinking water suppliers must by law use disinfectants to kill pathogens which are often introduced into water sources through agricultural or other nonpoint source discharges. There is currently no feasible disinfectant that does not create potentially carcinogenic by-products. Cleaner source water reduces the need for disinfection and the creation of disinfection by-products.
    Reducing risks from pathogens and suspected carcinogens is estimated to cost the Nation's water suppliers between $6 billion and $45 billion for pending regulations. This must be added to the bills of consumers, who have already experienced many other cost of service increases.
    Traditional end-of-pipe controls for achieving the goals of the Clean Water Act are not enough. We must begin to address both nonpoint source strategies and prevention efforts. Nonpoint source pollutants that have concerned the water suppliers include microbial contaminants, such as Cryptosporidium, which was mentioned earlier, which can come from animal waste and which can cause major disease outbreaks. Pesticides, once thought to only be a problem for agricultural groundwater areas, are now found in waters throughout the country, and natural organic matter, which reacts with disinfectants to form by-products.
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    Often very simple common sense actions can greatly reduce sources of nonpoint pollution which enter our Nation's waters. Quite simply, it pays to keep topsoil and nutrients on land rather than in our waters, and pesticides flushed from farmland do not serve to benefit crops.
    Watershed protection can be effective at safeguarding water quality. Major cities, such as Seattle, Portland, Tacoma, and New York, use watershed protection as a cost-effective means of maintaining high quality source water that meets Federal requirements and allows them to avoid costly treatment. For these few cities alone, treatment would cost billions.
    The vast majority of water systems in the country, however, are small and their costs are also dramatic. EPA estimates that over 2,300 small systems, each serving fewer than 1,000 people, collectively face costs of over one-third of a billion dollars to install treatment.
    We specifically recommend provisions that focus on the protection of sources of drinking water supply through watersheds and nonpoint source management programs, including directing section 319 funding and resources towards protection of sources of drinking water.
    The act requires biennial water quality reports on each State's—on that State's navigable water. We suggest that 305(b), which contains this requirement, be modified to specifically require monitoring of contaminants affecting drinking water quality.
    We recommend that one of the stated principal goals of the Clean Water Act be protection of drinking water supplies. This would serve to focus attention on what ought to be obvious; our rivers, streams, and lakes serve as the Nation's principal source of drinking water.
    There are many aspects of the act that attack drinking water sources. One final system deals with wetlands. The issue is, as you might expect, a double-edged sword. Wetlands serve as natural filtration units, but at the same time can limit our ability to develop new sources of drinking water for growing communities. Construction of new reservoirs will always impact wetlands. We would like to discuss with you development of a balanced approach that protects both valuable wetlands and our ability to provide drinking water to local communities.
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    We look forward to working with you as the reauthorization process unfolds, and I will be happy to answer your questions later.
    Mr. BOEHLERT. Thank you very much.

    Mr. Harrison.

    Mr. HARRISON. Thank you, Mr. Chairman, Members of the committee. We appreciate your hearing the concerns of the major stormwater agencies across the country that our association represents. I should note that I also helped to lead the work that resulted in the early permitting of all the major metropolitan areas within California, within the stormwater program, some 200 communities under that effort, and in addition, I manage an agency that is operating under one of those stormwater permits, and so our testimony today flows out of that firsthand experience.
    We believe, Mr. Chairman, that the stormwater quality mandate in the Clean Water Act really is evidenced by three realities that we have now learned over the past eight years: First, that the act holds us to a humanly impossible objective. It is resulting in monstrous costs and it is producing indefensible litigation for many of our permitted communities.
    Today, the act requires that every municipality in the country with a stormwater system to apply for a NPDES permit for that system and then to ensure the stormwater discharges meet the water quality objectives that have been established and in many cases those objectives which we are held accountable to exceed drinking water standards.
    Ironically, though, we do not yet have sufficient scientific data to know whether or not stormwater really creates a problem in the receiving waters and, if so, which pollutants are causing the problem or what type of management practices can produce the solution.
    In spite of the fact we do not know the nature of the problem or how to solve it, if it exists, 800 plus municipalities are now spending hundreds of millions of dollars in pursuit of these objectives. The average cost of a single permit, which you have heard earlier today runs $650,000 per community, my application cost $700,000, the first permit termed compliance cost, that is the first five years of the first rounds for most communities estimated nationwide at somewhere between $1.3 and $3 billion. And the long-term cost to try to achieve traditional water quality objectives with our stormwater discharges can reach into the hundreds of billions annually.
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    Because the standards to which stormwater is held are technologically and financially infeasible, our municipalities and businesses are now finding themselves subject to the citizens' supervisions of the act, in some cases perhaps even abuses of that authority.
    The State of California's State Department of Transportation has just lost a lawsuit in Federal Court now being found to be in violation of the act. We have several Southern California cities who have similar suits pending. The County of Los Angeles has a suit pending for violation of the act. Several of our Southern California businesses and industries are already under notice of intent to sue.
    Perhaps most ironically, EPA named the Santa Clara Valley district stormwater program best in the Nation last year. Within six months, they had a notice of suit filed against them and an order from EPA charging them with violation of the statute, and just this week King County, Washington, which includes the community of Bellevue, long recognized for its advanced work in water quality areas, has now received its notice of suit under the act.
    There are a number of recommendations in our written testimony. I will just summarize those. We do not include deferments as part of those recommendations. Quite frankly, deferments do not fix the inherent problem that lies within the act. They simply divide the attention.
    We do not believe that we can accomplish the objectives that the Congress intended through the point source program. There is a lot of things that we can do but the point source program does not get us to the objectives.
    We are recommending that stormwater be moved back to the point source program where it rightfully belongs and where it began. We are recommending that the Congress require the development of nonnumeric criteria for stormwater and, in fact, every interest group, including the environmental community, has gone on record acknowledging that traditional water quality objectives simply do not work for stormwater.
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    And lastly, we are recommending that the Congress authorize specific funds from the SRF fund to go develop the necessary science to quantify the stormwater problem and to evaluate the things that we can do that will help solve it.
    To summarize, Mr. Chairman, except for a mountain of paperwork and a growing list of lawsuits, we have little measurable results to lay before you today from our efforts and our cost to comply with the act. This certainly was not what Congress intended, and our member agencies urge the Congress to implement changes which will move us back in the direction that you originally intended in your 1987 action, and I thank you very much.
    Mr. BOEHLERT. Thank you, Mr. Harrison.

    Mr. Stahl.

    Mr. STAHL. Mr. Chairman and Members of the committee, thank you, Mr. Horn, for the introduction before. I appreciate that very much. I appear before you as president of the California Association of Sanitation Agencies, better known as CASA.
    CASA is a statewide association of some 87 small, medium, and large wastewater treatment agencies that collectively serve more than 15 million Californians. CASA believes the Nation's clean water law must be overhauled to, one, provide a reasonable, cost-effective approach to protection of water quality to ensure that the greatest water quality threats are addressed; two, achieve greater flexibility in the implementation of the law's existing water quality standards and permitting provisions; three, provides for a watershed management approach, and certainly not last; number four, and not the least, provide a sound commitment to the State Revolving Loan Fund authorization, including an equitable allocation formula.
    If we were to meet the challenge of addressing the Nation's remaining water quality threats, we cannot continue down the narrow path of command and control of point sources. The real issue is nonpoint pollution. As you said, Mr. Chairman, a few moments ago, this is where we get the biggest bang for the buck.
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    This is borne out by the evidence that illustrates water quality benefits could be achieved by controlling such sources instead of requiring tertiary advanced treatment at point sources. The public we serve pays the cost of providing the lifeline service of sewage treatment and disposal. We are held accountable not only to protect public health and the environment but to do so in a cost-effective manner.
    However, the regulatory framework fails to adequately take this into account. Huge public expenditures could be made to install advanced treatment technology even though this action would in all likelihood not result in significant improvements to water quality.
    In summary, CASA suggests to you, one, make it a policy of the act that the most economical and cost-effective means are chosen to achieve clean water quality goals; two, rely on a watershed management approach to provide a framework for locally based solutions. These two points, if adopted, would address the all important issue of regulatory flexibility, and move us away from the costly one-size-fits-all mindset. CASA will be submitting its preferred approach to you in detail before you begin your announced markup. The devil is always in the details and I am giving you a summary but we will provide you with the details.
    However, for today, let me identify the key components of a workable watershed management policy. Number one, develop cost-effective, site-specific water quality standards. And I emphasize site specific that apply to the watershed, including realistic designated beneficial uses. Ensure meaningful participation by affected parties during the development of any watershed plan.
    And the last point. Rely on realistic time frames to accomplish watershed plans and subsequent implementation.
    Let me provide a few examples that have led us to believe that command and control is not the answer and in your words, Mr. Horn, horror stories.
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    Since 1960, San Francisco Bay area POTW's publicly owned sewage treatment plans have spent more than $3 billion to upgrade their systems. Today, they account for less than 15 percent of metals discharged into the San Francisco Bay. Nonetheless, one city, Palo Alto, would be required to spend 100 million to build lime treatment and reverse osmosis facilities to remove metals in its 23 million gallon per day plant. Annual operating costs for this are estimated to be at $21 million for this one plant alone: The benefits of removal of some 200 pounds of copper per year, or 0.0002 of 1 percent of what is in the bay, without any measurable or significant improvement in water quality.
    Another point. In the Sacramento region, capital control costs for metals removed are estimated to exceed a billion, a billion dollars. Unfortunately, the data suggests that the metals in the river are not from the publicly owned treatment works but from abandoned mines. Yet the command and control structure continues to focus on the publicly owned treatment work.
    And finally, in the arid portions of California, publicly owned treatment works would be required to meet nationwide water quality standards in effluent-dependent streams. For example, one discharging into the Santa Ana River in Southern California will spend 110 million to remove ammonia, resulting in a 73 percent rate increase to the taxpayer. Keep in mind, the river's physical limitations prevents any native fish because of the limitations of the habitat. This removal effort is intended to protect 2,600 mosquito fish planted for mosquito larvae abatement in an 8 to 10 mile segment below the fish discharge. Fish wouldn't be there if it were not for the discharge. Clearly, a watershed management approach would permit development of a framework to balance other options with this command and control approach.
    Finally, I would like to turn to the matter of treatment facility financing through the SRF. CASA appreciates the need for deficit reduction, however, if we want a self-sufficient revolving loan fund and jobs for the environment, we need to capitalize the SRF properly. We support the administration's request of $1.6 billion.
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    In addition, CASA recommends three final points to you: SRF funding to support priority pollution prevention projects, such as water reclamation; two, the Federal allocation formula is equitably revised to reflect true populations and needs; and three, ensure should Congress pass a drinking water SRF that the wastewater State Revolving Loan Fund not be used to capitalize the drinking water fund.
    Mr. Chairman, this concludes my testimony, and I appreciate your attention to the issues.
    Mr. BOEHLERT. Thank you very much.
    I would like to ask all the panelists—well, first of all, there is no disagreement that $1.6 billion is the minimum we can do for SRF. No one disagrees with that. Let me ask how we can improve the Clean Water Act to protect source waters, which are critically important to so many of us, without imposing Federal controls on land use?
    Do you want to start, Mr. Ramaley?
    Mr. RAMALEY. I think that the answer—that is not a simple question; I am sure you are aware of that.
    Mr. BOEHLERT. I know.
    Mr. RAMALEY. I think that watershed management is very site specific and I think it is also a function of the use, the intended use, the beneficial use downstream.
    From the perspective of water suppliers, watershed management techniques vary across the country. As you are well aware of, they vary from complete ownership of watershed and control and management for cities like Portland to a partial ownership and management as we have in Newport News, to no management whatsoever for a large run of river intakes, say for the city of New Orleans.
    In terms of how you implement them nationwide, without impacting property rights, and I assume that is what you are getting at—
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    Mr. BOEHLERT. Sure.
    Mr. RAMALEY. —I think you have to debate the means available. I think you have to look at the comprehensive approaches that, for example, AMSA was proposing here with a bottom-up stakeholder input in terms of how that can input at the local level. I think there are a means of doing it but there is no denying that some of those steps will have impacts on individual property holders.
    I think you can minimize those effects, though.
    Mr. BOEHLERT. Anyone else?
    Mr. RAMALEY. Anybody else?
    Mr. BOEHLERT. Mr. Wagner.
    Mr. WAGNER. I would just offer I don't have a single or a precise answer to your question, but within the watershed concept the point that we would bring is that there are a whole array of regulatory and nonregulatory and voluntary incentive options that are available to each individual group that is planning for a particular watershed.
    I think the challenge here is to provide an appropriate mix and to review whether at the Federal level and at the State level there are the appropriate mixes and there are sufficient tools.
    I think in AMSA's view, we think that the current Clean Water Act and current State authorities there are a great deal of authorities and voluntary incentives. We would hope that the Clean Water Act would add some more especially to focus on the nonpoint source area.
    Mr. STAHL. Mr. Chairman, if I could?
    Mr. BOEHLERT. Mr. Stahl, yes.
    Mr. STAHL. In response to your question, to reiterate the point that you had made earlier about micromanagement. I think when you get into the issue of property rights we are getting into, not to sound redundant, but personal issues that belong on the local level. And I think while it is important to set the goal in the Clean Water Act, that local planning commissions, city councils, local governments are best in the position to be sensitive to the issues of property rights as it impacts a watershed management policy.
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    I think what you have heard today is that most of us coming with the mindset that not that EPA is insensitive to that, but they cannot be as sensitive as the local stakeholders.
    Mr. BOEHLERT. I think all of you have to appreciate the fact that the grants program is probably gone forevermore, so we will be dealing with the SRF.
    Mr. Marchetti, let me ask you, you are familiar with the principal subsidy concept? Would you care to address that? I am enamored with it, but I want to hear some experts give me some guidance.
    Mr. MARCHETTI. Sure. There are a number of cases, particularly in Pennsylvania. We have run across a lot of applicants who are really very small, disadvantaged communities that even with the lowest interest rate that we can charge, which in Pennsylvania happens to be 1 percent by State law, still have user rates that are extremely high. And what we would like to be able to do in addition to being able to extend amortization periods out is in those really difficult hardship kind of cases to be able to forgive some of the principal they would otherwise have to pay back in order to make these projects reasonably affordable, and particularly low-income disadvantaged communities.
    Mr. BOEHLERT. Thank you very much. That is a given, that we are going to extend the 20 to 30 years at a minimum. I don't think there is any disagreement up here. We were all ready to go last year with that. Some things got in the way. My time is up.
    Mr. Borski.
    Mr. BORSKI. Thank you very much, Mr. Chairman.
    Mr. Koplish and Mr. Marchetti, I want to address my question to you, if I can. The Philadelphia Inquirer had an article today, I don't know if other Pennsylvania newspapers or not, saying that Pennsylvania leads the country in waterborne disease outbreaks. While we all rooted hard for Penn State to be number one, I am not sure we want to be number one in this category. Is there anything we can do or what can we do or should we be doing to fix this problem?
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    Mr. MARCHETTI. Well, that is what we were created to do. We have had drinking water labs since 1988. As a matter of fact, actually I am surprised—I have not seen that—but when PENNVEST was created, it was true, Pennsylvania did lead the Nation in outbreaks of waterborne diseases. I had come to the understanding that we did not rank number one in that regard but perhaps we do.
    All I can say is that there is still a tremendous need for funding out there, both on the wastewater and drinking water side and as much as we are able to do, if it is not enough, then we just need to be able to get more loans out there to people to be able to clean up their problems.
    Mr. BORSKI. The article says that most of the incidents in Pennsylvania this took place in smaller and middle-sized water systems in the central and northern part of the State. I am assuming they are the poorer areas and people are having a harder time coming up with the dollars. Is that specifically what PENNVEST is trying to do?
    Mr. MARCHETTI. Yes. Over half of our borrowers are small communities. In terms of the number of dollars, they get approximately a third. I am talking about now both drinking and wastewater combined. But, yes, this program—it is a very flexible program and we also have loans to large cities and intermediate sized cities as well, but a large number of our borrowers are small communities.
    Mr. BORSKI. Mr. Wagner, I would address this to you, if I can. The Chairman has mentioned the SRF program and how there is consensus here, and there is in this committee. My fear is that in the budgeting committee and in the appropriations world we may face a serious reduction. I mentioned earlier about the possibility of a balanced budget amendment, just adding to that pressure here.
    What effect would it have on your agencies and on the clean water programs if there were a 30 percent across-the-board cut in clean water programs?
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    Mr. WAGNER. It is hard to tell. Immediately, the capitalization of the State SRF programs would be discontinued. There are funds there now and they would become much more scarce. There would be much more competition within the individual States for their remaining funds.
    I think from New York City's perspective, we intend to rely very heavily on the SRF program. We have in our wastewater program alone a 10-year capital program of about $5 billion. That is just to meet current requirements.
    So we would be hard-pressed to raise that money in the commercial markets at going rates without the SRF subsidy.
    Mr. BORSKI. Anyone else care to comment? Mr. Marchetti or Mr. Ramaley.
    Mr. RAMALEY. I am sorry, could you repeat the question?
    Mr. BORSKI. I am basically concerned about the potential possibility of a 30 percent reduction in clean water programs as well as all domestic programs due to our fiscal problems with the Federal Government and particularly with a balanced budget amendment coming across calling for significant cuts in the money we spend. I guess the question is if we were to have a 30 percent cut in clean water programs from the Federal Government, what effect would it have on the Clean Water Act and on your programs particularly?
    Mr. RAMALEY. In terms of drinking water agencies, obviously, what we would be most concerned about is deterioration, qualities of our source waters. Drinking water agencies in this country have historically not been able to receive grants or revolving loan funds by and large except for very small systems. So in terms of our operations, it would have not a direct funding impact, but in terms of the quality of our source waters we would be quite concerned if those measures have an impact there.
    Mr. HARRISON. Mr. Chairman, if I might add a word to Mr. Borski's question?
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    Mr. BOEHLERT. Sure.
    Mr. HARRISON. There is a simple bottom line here. If the Congress cannot afford it then perhaps it should make certain the mandates it imposes on us are within our limits of affordable. Otherwise, the whole system comes crashing down around all our ears.
    Mr. BOEHLERT. Well, that is a familiar theme.
    Mr. STAHL. Mr. Chairman, if I could, much from California's standpoint?
    Mr. BOEHLERT. Surely.
    Mr. STAHL. The State needs for the next five years are estimated at somewhere near $10 billion. So obviously a 30 percent cut would have a significant impact on the types of projects that we are looking at. I mention in my testimony jobs for the environment. The one thing that I think all of us bring to the table here is the investment that you see is an investment in the infrastructure and an investment in jobs. Without that, I think we lay a very poor foundation for the future.
    Mr. BOEHLERT. Well, this is a committee that believes in investment in infrastructure, and our favorite four letter word is one you can use in polite company, it is jobs. We are not going to be mindless and go with any 30 percent across-the-board cuts. Believe me, that would be a lousy way to do it.
    But, also, and I know you did not come here for this little lecture, but we are spending $813 million a day in interest on the national debt. That could solve a lot of your problems if you just had a couple hours' worth of that. So we have to get serious on a bipartisan basis to address our Nation's problems, and I think we are determined to do so. And when we look to leadership to solve our problems, we rely on Mr. Horn.
    Mr. Horn, you are up.
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    Mr. HORN. Thank you, Mr. Chairman. I wish we had a half-hour to debate the effect of the balanced budget amendment. The fact is it might not affect any of your appropriations.
    What counts here is the priorities that have to be set, and most of us agree, clean water is important. On the other hand, if we do limit what we can spend that means you at the State level have more to spend. But that is a half-hour and I don't want to get into that. I have some questions I want to ask Mr. Stahl. I appreciated all of your statements very much. It gives us good perspective.
    Mr. Stahl, I noticed you said on page 2 of your statement the Clean Water Act makes no provision for ensuring that control efforts are targeted toward the problems where the greatest benefits can be achieved. Your statement goes on essentially to say that no amount of spending on points source control will lead to the meeting of the water quality standards.
    Now, your answer to this is to advocate watershed management. And I think in this year and last year and the year before everybody agrees that is a very good idea, though they have different ideas how you are going to implement it. So I would be interested in what aspects of water management are important to your association? You have a statewide perspective here. What are the aspects that are important?
    Mr. STAHL. Well, we look at watershed management in a simplistic overview. I think the way we have to attack the problem is starting off in a narrow and focused arena. We would not come to you and say that watershed management would suffice for every single pollutant, to begin with. We would like to focus on metals.
    One of the things that has plagued us the most, and I dare say for a lot of people, is the national toxics rule, but especially in California. And when you get into these very trace constituents that is where I think watershed management is a preferred approach, to be able to control those.
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    So I would say the very first thing is we should focus on trace constituents. And then I think also it is necessary in watershed management that we incorporate a lot of the existing provisions of the Clean Water Act and not to set it off to its side as a stepchild so that we can eliminate duplication of effort in a lot of the programs that EPA has.
    And the very third thing, and first in my mind, really, as an engineer, is we need flexibility in the implementation schedules. There is a tendency for EPA to say, well, watershed management is fine, we have the flexibility now, so you go off and you have your watershed management program, but in the meantime, we are going to promulgate a national toxics rule metals standard and your effluent limits are not going to change, we will not put them on hold. With that sort of a hammer, you do not get the incentives to implement the truly innovative programs that will save us money and certainly save the Congress money.
    Mr. HORN. What sort of incentives do you think we need to encourage watershed management?
    Mr. STAHL. Well, the one incentive I mentioned, Mr. Horn, with regard to a sensitivity to implementation schedules, I think that what are in the bill, the draft bill now, Mr. Shuster's bill with regard to changing the permit cycle from 5 years to 10 years, is a first step. But the most important thing is to build in flexibility.
    If you were to say to all of us that you will be able to set your standards related to site-specific issues, that means a tremendous amount, I dare say to AMSA and certainly to CASA, and if we can have more understanding and cooperation with regard to the designation of beneficial uses so we are not spending a lot of money to try to bring about a fishable, swimmable standard to a lined flood control channel in California where fishing and swimming is prohibited. You run into a conflict there and it is certainly wasted money. So we have to look at those issues.
    Mr. HORN. On page 5, I notice you say water quality standards should be based on these empirical site-specific studies and monitoring to guarantee that all water pollution mandates are relevant and provide a reasonable benefit for the costs incurred.
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    Well, do you have an estimate as to the range of costs it might be to do this in any particular watershed and how do we get that realizing that watersheds are not alike? This is going to vary.
    Mr. STAHL. I gave you the one example in my testimony, and it is more detailed in the statement with regard to San Francisco Bay. There is another example where the city of Sacramento is estimating it would cost them a billion dollars to comply with the national toxics rule metals standards, and even then the water body, the Sacramento River, would not meet it because the metals are coming from abandoned mines upstream. And, quite frankly, nobody wants to touch the abandoned mines because it is a Superfund issue.
    One of our agencies, Eastern Municipal Water District, went in, and what I would say is good engineering science, they went in and build a small check dam to cut off some flow and they immediately became a potential responsible party and they learned very quickly that you do not want to sort of, so to speak, stick your fingers in that dike. So a lot of these things dovetail together that we have to address to give us the flexibility to have cost-effective solutions and bring about good watershed management practices.
    Mr. HORN. Where do you think the money would come from, various industries, various municipal districts, special districts? What are we talking about to get the money we need? The Federal Government does not have it all despite EPA's willy-nilly making regulations to check for metals that no one has ever found in the State and this kind of thing. Any innovative ideas on how we fund some of this?
    Mr. STAHL. My personal checkbook will not take care of it for you.
    Mr. BOEHLERT. If the ideas are too good, you will be up here instead of down there.
    Mr. STAHL. The State Revolving Loan Fund program is obviously the basic tool that we have available to us now. And you are certainly going to have to bring in the nonpoint source people to become partners in that program. If you are going to ask them to participate in watershed management, you have to make available to them the same type of funding that we do.
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    Will that cover everything? I can't say to you, Mr. Horn, that it will, but I have a confidence that if we would attempt watershed management and we can see the kinds of savings that it will bring about in the watershed, not only for monitoring costs but for more cost-effective solutions that that local money then can be used to further capitalize the SRF or used to support the program.
    Some people talk about pollutant trading as an incentive or a way to be able to capitalize it. That is something we think would come later on down the line. It has its pitfalls but it is something we would keep our mind open to.
    Mr. BOEHLERT. Thank you very much, Mr. Horn.
    I want to thank all the witnesses. We appreciate your valuable resources and we do pay attention. Your entire statements have been distributed to all the Members of the subcommittee. I would look forward to any further suggestions you might have. Particularly, I would welcome anything you might be able to share with us in terms of special insight, how to deal with the problem of nonpoint source pollution, and any sort of language that you think might be appropriate for us to incorporate into our final vehicle that we go forward with.
    Mr. Wagner, I want you to know, and I want you to go back to report this to Commissioner Gelber, I let you off easy but that is because the city is working with the watershed towns, and we have a monumental problem, gentlemen, Mr. Wagner is very familiar with. And so I am totally absorbed in it. And the good news is that I think there is a spirit of cooperation between the city of New York and the watershed towns that is going to guarantee the protection of the water supply for 9 or 10 million people and will not require us to close up shop upstate. We can still have agriculture and in a responsible way we can have development in a responsible way. So I am looking forward to continued dialogue and cooperation.
    Mr. WAGNER. We think that is a prime example of the way watershed management should be done.
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    Mr. BOEHLERT. Thank you very much. Thank you all. This hearing is adjourned.
    [Whereupon, at 2:10 p.m., the subcommittee was adjourned.]

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