Segment 5 Of 5     Previous Hearing Segment(4)

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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 []. Complete hearing records are available for review at the Committee offices and also may be purchased at the U.S. Government Printing Office.



U.S. House of Representatives,

Subcommittee on Water Resources and Environment,

Committee on Transportation and Infrastructure,

Washington, DC.

    The committee met, pursuant to notice, at 10:06 a.m. in room 2167, Rayburn House Office Building, Hon. Sherwood L. Boehlert (chairman of the subcommittee) presiding.

    Mr. BOEHLERT. The subcommittee will come to order.

    Good morning everyone. This is the fifth in a series of seven hearings we will be having on a very important subject, the reauthorization of the Clean Water Act.
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    I will have an opening statement and so, too, will the ranking minority member, Mr. Borski, and then we'll get right to our witnesses.

    This is going to be a long hearing today. At some points it will be contentious, I'm sure, but we are here to learn.

    Today, we will discuss one of the most controversial and important aspects of this year's Clean Water Act reauthorization effort, the reform of the section 404 wetlands permitting program.

    The importance of reasonable wetlands reform is reflected in the scope of today's hearing. Six different panels will discuss the current status and future direction at policies aimed at protecting our Nation's wetlands. We must make changes in the current wetlands permitting process, and I am committed to doing this.

    No citizen should be waiting on the Federal Government for 2 or 3 years to find out what he can or cannot do on his own land. However, we must make wetlands reforms that reflect the fiscal realities facing our Nation. Quite honestly, I have to concede I do not feel that the wetland proposals in title 8 of H.R. 961 accomplish this objective.

    I understand the frustration that Members such as my good friend Mr. Hayes have with the section 404 program, because they are frustrations that I share, and I want to work with them to improve this program. But, quite frankly, I think H.R. 1330, now title 8 of H.R. 961, simply goes too far.
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    According to CBO estimates, the compensation provisions in title 8 of H.R. 961 could cost the Federal Government between $10 and $15 billion. Let me repeat this: the wetlands compensation provisions in H.R. 961 could cost the Federal Government between $10 and $15 billion. That is more money than is authorized in H.R. 961 for the entire clean water program for the next 5 years.

    The wetlands proposal in H.R. 961 would also call on the Federal Government to acquire—potentially acquire—millions of acres of additional property across the country. In many counties and parishes, this could result in the Federal Government acquiring up to 20 percent of the land. As we know, the Federal Government does not pay taxes on property it owns. How many millions of dollars would H.R. 961 take away from local governments each year?

    The classification and delineation program would be enormously expensive, as well. Thousands of new Corps employees would have to be hired to perform the classifications and delineations outlined in H.R. 961. A couple of billion dollars would be required to perform these new assessments.

    Hiring thousands of new Government bureaucrats, increasing the price tag for clean water by billions of dollars, and reducing the tax base for thousands of localities are not concepts we should be embracing in the name of reform.

    As I stated earlier, I am committed to reforming the section 404 wetlands permitting program, but we must reform the program in a reasonable and fiscally responsible manner.
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    I have shared my concerns with Chairman Shuster and Mr. Hayes and will be working closely with the members of this subcommittee to produce a workable wetlands reform package. I'm certain that today's panelists will provide us with significant insights on how we can best reform our Nation's wetlands policy.

    [Mr. Boehlert's prepared statement follows:]

    [Insert here.]

    Mr. BOEHLERT. I would now like to recognize the subcommittee's ranking member, Mr. Borski of Pennsylvania.

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

    Let me first congratulate you on setting aside a day to hold a hearing on the issue of wetlands.

    We all know our national wetland program has been subject to controversy and intense scrutiny for many years, and today's testimony should prove valuable.

    The most important subject to address today is the question of how the program is working now, not how it worked in previous years.

    President Clinton has recognized that there were problems with the way the wetlands program was being operated. In August 1993, the President proposed a wetlands initiative to make the wetland program work better. Some of those proposals have been implemented, some are still being prepared.
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    It is important, however, that we talk about where the wetland program is now, not where it has been in the past.

    With that background, we should talk about the questions surrounding the process of issuing permits, delineation of wetlands, and the potential for loss of valuable wetlands resources. It is essential that we remember that there are numerous widespread opinions on these issues.

    It is crucial that we have a process that protects property rights and allows people to proceed with legitimate development; however, we are the caretakers of the land and its resources. We must never forget that we have an obligation to provide the highest standard of protection to those resources.

    Thank you, Mr. Chairman. I look forward to hearing from our witnesses today.

    Mr. BOEHLERT. Thank you, Mr. Borski.

    It has been the usual procedure up until now to confine the opening statements to the Chair and the ranking member, but because we have a couple of members here who have been particularly active I would like to recognize them for brief opening statements.

    Mr. Hayes?

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

    This is an issue which has long been overdue in its fair and impartial consideration. The chairman earlier mentioned concerns, some of which I constantly share with him about steering a central course on any activities of Government.

    He spoke earlier of tax revenues that are lost. Tax revenues are lost now when properties that are assessed at high price cannot be permitted upon application when adjoining landowners throughout Mississippi, Arkansas, Louisiana instantly devalue their own property by going to the clerk of court and therefore lose revenues. The estimated loss of revenues in the State of South Carolina, alone, is larger than the budget for EPA's monitoring of the State of Louisiana.

    These kind of tax losses take place and a secondary loss occurs, a collateral loss. When there is no way to determine in advance the configuration or ultimate disposition of property upon permit application, since each and every thing is triggered by requesting a permit, banks, financial institutions are now dragged into the picture, and the unknown becomes the inability to finance other activities unrelated to the land.

    In the place where I live, many people who are landowners would use that collateral to do an activity that might be in the heart and central area of a town or further their own other, unrelated business interest. In other words, they're not seeking the 404 permit, they are seeking to use value to build value to be capitalists. That's getting more and more a foreign word in too many regulatory years.

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    So for that reason we have a second collateral loss, and we now have a Federal agency enforcing that on 90-day review periods saying, ''If you don't have information on the environmental impact on this property, don't renew the loan.''

    Well, in small places like southwest Louisiana it takes $8,000 or $10,000 to get a general review, some of those loans aren't but $8,000 or $10,000 to put a kid through school, to pay tuition at Tulane University if you are a rice farmer somewhere in Cameron, Louisiana.

    The loan value, the land value, and the assessment value impact on you greatly. These are the kind of economic burdens that also have to be relieved.

    I'll just close by welcoming the panels of witnesses, by thanking the chairman again, and by saying that what we are ultimately after in this case is a fairness for landowners, for property owners, and for the environmental community, a fairness by which all interested parties can proceed for the public good.

    Thank you.

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

    That will be the operative word as this subcommittee proceeds—''fairness.''

    Mr. Menendez?
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    Mr. MENENDEZ. Thank you, Mr. Chairman.

    Mr. Chairman, I have lengthy testimony which I ask unanimous consent to be included in the record.

    Mr. BOEHLERT. Without objection.

    Mr. MENENDEZ. I briefly want to thank the chairman for giving me this opportunity.

    I just want to note that H.R. 961, section 803 strikes 404 of the Clean Water Act and creates a lengthy new section on wetlands. Without entering the fray at this time on the merits of this legislation, I would note that the Federal permit program under section 404 of the Federal Water Pollution Control Act was not originally conceived as a wetlands regulatory program. Actually, it was a program relating to and regulating dredging.

    There is no dredging program in H.R. 961. I'll be proposing legislation in the next few days to address this shortcoming. It is an important economic and transportation issue for the committee. It needs substantive legislative guidance to advance delayed dredging permits. I'll be seeking to speak to you, Mr. Chairman, and the members of the committee in pursuit of that.

    Thank you for the opportunity.

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    [Mr. Menendez' prepared statement follows:]

    [Insert here.]

    Mr. BOEHLERT. Thank you very much.

    Mr. Poshard, do you have a statement?

    Mr. POSHARD. Mr. Chairman, thank you. I do have an opening statement I'll submit for the record.

    I guess I would just say in opening that I look forward to a bipartisan effort on this issue. It has been a highly-contentious issue, especially in the agricultural areas that represent this country.

    I hope we concentrate on defining wetlands, on determining jurisdictional authority, getting this into the hands of the people who work at the lowest levels of government and who are most familiar with the land, especially again in those agricultural areas, and recognize that a ''one policy fits all'' policy doesn't work with respect to the quality of wetlands. They are not all the same quality and they don't all need the same protection in this country.

    Let's not sell our people short who work out in these areas now in terms of their voluntary efforts to get this job done. I hate to see us engage along a path of heavily-mandated approaches to this issue.
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    Thank you, Mr. Chairman.

    [Mr. Poshard's prepared statement follows:]

    [Insert here.]

    Mr. BOEHLERT. Thank you.

    Mr. Martini.

    Mr. MARTINI. No statement, Mr. Chairman.

    Mr. BOEHLERT. Mr. LaTourette.

    Mr. LATOURETTE. Mr. Chairman, I would ask unanimous consent to be permitted to put my opening remarks into the record.

    Mr. BOEHLERT. Without objection.

    Mr. LATOURETTE. Thank you.

    [Mr. LaTourette's prepared statement follows:]

    [Insert here.]
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    Mr. BOEHLERT. This panel has 29 members, 16 in majority and 13 in minority. You will see during the course of this day, I think, all 29 members here, which reflects how seriously we take this subject matter.

    I want to advise all the witnesses today that your entire statements will appear in the record. We would ask that, in the interest of time, you summarize your statement. We won't be hard and fast, but we'll try to keep the summary to 5 to 6 minutes. We are going to restrict our colleagues, too, for their questioning. If necessary, we will have more than one round, but each round will be restricted to 5 minutes. We're just going to try to get out of here before midnight.

    The first panel consists of: Mr. Anthony J. Palermo, who is with Palermo Real Estate and Construction from Sulphur, Louisiana; Mr. Bernard Goode, an environmental engineering consultant from Burke, Virginia; and Virginia Albrecht, partner of Beveridge & Diamond, Washington, D.C.

    We will go in the order in which the panelists were announced.

    Mr. Palermo.

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    Mr. PALERMO. Good morning, sir.

    Mr. Chairman and committee members, I certainly want to thank you for giving me the opportunity to be here this morning.

    My name is Anthony J. Palermo, Sr. I am a builder, developer, and realtor from Sulphur, Louisiana. I have lived and earned my living in Calcasieu Parish all my life. Virtually my entire family, including my Dad before he passed away, have made their living through selling and development of real estate. Now, thanks to section 404 of the Clean Water Act, our method of earning a living may soon be a thing of the past.

    Certainly I'm not against the preservation of the environment. I am an avid hunter and sportsman. I have a deep appreciation for conservation. I am a member of Ducks Unlimited, a member of Wildlife Forever, a lifetime member of the North American Hunting Club, a lifetime member of the National Rifle Association, and my family belongs to the Gulf Coast Conservation Association, all environmentally conscious groups.

    If the environment is destroyed it takes away from my enjoyment of these activities. I'm as much an environmentalist as anyone considers himself to be an environmentalist, but if we are to preserve something for the public, than the public should pay for it, not private landowners.

    There are two classifications of environmentalists—the good and the greedy. The good environmentalists are those who want to preserve and protect the environment, but not at the sole expense of the landowner. The greedy environmentalists are those who also want to preserve and protect the environment at no cost to themselves and only the landowner depriving the landowner and society of the benefit of the highest and best use of that property.
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    We must realize at this time that 75 percent of wetlands in the United States are under private ownership. It is estimated that 80 percent of all properties included in Louisiana under the current criteria of the Corps of Engineers can be and will be considered wetlands, so 80 percent of the property in Louisiana can be stripped of almost all of its value by the Federal Government.

    I believe strongly in the rights that have been granted to the individuals under the United States Constitution, rights that many have fought and died for. Among those rights are those rights under the 5th Amendment of the United States Constitution, which says, ''No person may be deprived of life, liberty, or property without due process of law, nor shall private property be taken for public use without just compensation.''

    My brother and I control a couple of thousand acres of prime hunting and fishing property. Being avid sportsmen, we see the need for preservation of wetlands; however, if the Government considers this property wetlands and denies its use, they should buy it—negate its use for the public good. Then we, as a public, should own it. But I am not here today to discuss just that land. This land is located in a very rural area and is obviously wet.

    I want to share with you a nightmare I experienced with property within the corporate limits of Sulphur, Louisiana. I am speaking of 68 acres located on one of two full cloverleafs in the State of Louisiana, a property that is located at the gateway to the largest industrial complex in the State of Louisiana. The traffic to and from at least 12 major industries must pass through this intersection.

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    The subject property is located at the intersection of highway 108 and interstate 10 in Calcasieu Parish. The traffic count on interstate 10 eastbound alone is 49,000 vehicles within a 24-hour period; highway 108, 17,000 vehicles per day.

    At this time, the property is valued at $89,000 per acre, with a total value of $6,052,000. Of the 68 acres, 5 acres are already developed as a truck stop. This truck stop opened around the 1st of March 1994, and already we need additional truck parking.

    I fully intended to develop the additional 63 acres. The development would include, among other things, additional truck parking, a retail tire center with a remanufacturing plant on site, a truck repair and service center, a motel, and a large automobile dealership. After completion, this facility would be directly responsible for approximately 300 jobs on site—we need those jobs there in Calcasieu Parish—not to mention those related service industries to these facilities.

    I was told by the Corps of Engineers that 60 percent of this property was considered wetlands. As I appreciate the situation as it is, there has never been a clear definition of what determines a wetlands. I have been told that it can be determined by plant life, certain soil conditions, and a multitude of other things too numerous to mention. Therefore, the agent for the Corps of Engineers can clearly make an arbitrary decision about the fate of my property.

    I was told by the Corps of Engineers agent that if I was not satisfied with his assessment of his property he could always make it worse. Of course, this isn't being arbitrary and capricious, is it?
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    I filed a wetlands application with the Corps of Engineers. Nine months later, after several thousand dollars in attorney fees and countless man hours dedicated to the task, I was able to procure a permit on approximately 40 acres of my property. The other 28 acres, valued at $2,492,000 was not to be used because the Corps said it would be too much impact on the wetland situation; 28 acres out of the 40 acres used had to be mitigated at a cost of $19,000. Due to long delay, I lost two major tenants, which cost the development a considerable sum of money and the community several needed jobs.

    At this point, gentlemen, I'd like to share with you a FAX I received this morning from Mr. Harold J. Schoeffler. Harold is a Sierra Club conservation chairman for the State of Louisiana. He also chairs the Acadian Group, one of five groups in the State of Louisiana.

    ''Dear Mr. Palermo, the following would document my experience with your wetland permit on interstate 10, Sulphur, Louisiana area.

    ''After hearing your testimony at Senator Johnson's wetland hearing in Baton Rouge last year, I became concerned that your case, if not addressed, could be an example that would hurt any future wetlands legislation.

    ''The anger and frustration you expressed was sincere in that it reflects your interest in doing the right thing in terms of wetlands preservation. This approach was being met by underlying bureaucratic maze of indecision and poor field data.

    ''After my personal inspection and walk of the area, it became very apparent that your site probably should not have been in a wetlands permit posture. No question the land was wet in some spots and water had dependent vegetation.
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    ''On close inspection with the Corps of Engineers and U.S. Fish and Wildlife personnel, it was discovered that the water retention was caused by the railroad's fall bank to the south, the State highway to the west, interstate 10 to the north, and two pipelines to the east that left continuous fall banks.

    ''The net effect of these unrelated, manmade changes in the topography created a ponding effect that artificially created a wet area. This is not the type of wetlands that the regulations were designed to protect. In fact, this site was relatively high ground where natural surface drainage had been destroyed.

    ''I admire your patience in dealing with this situation. Your case certainly points to the need of better field data, better maps—especially older, predeveloped maps showing historical land/water relationships—and a better definition of what is a wetland. A definition should not include areas that have become wet because of highways, railroads, pipelines, canals, and the likes that have been built with little or no regard for surface drainage.

    ''It has been a pleasure working with you on this project.

    ''Yours in conservation, Harold J. Schoeffler.''

    Mr. BOEHLERT. Thanks, Mr. Palermo. Do you want to submit that letter for the record?

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    Mr. PALERMO. I'd love to, sir. Yes, please.

    Mr. BOEHLERT. We'd love to have that.

    I have been generous with your time because we wanted to hear what you had to say, but we are going to have to move on to the next witness now. We'll have some opportunity for questioning.

    I know you've got a lot more that you would like to share with us.

    Mr. PALERMO. Many years in 5 minutes?

    Mr. BOEHLERT. Well, we actually have gone 10 minutes, Mr. Palermo, because we recognize that. We'll have the opportunity for questioning.

    Your full statement will be in the record, and I can assure you that will be very carefully evaluated by the full committee.

    Mr. Goode.

    Mr. GOODE. Good morning. I'm Bernie Goode, an environmental engineering consultant specializing in wetland regulation.

    I retired from the Army Corps of Engineers in 1989 after 34 years with the Corps. During the last 8 years, I served as chief of the Corps national regulatory program here in Washington, with primary responsibility for administering the section 404 permit program.
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    Since retiring, I have worked on 180 wetland cases in 40 States, Puerto Rico, and the District of Columbia. I have been involved in wetland regulation on almost a daily basis for the past 24 years.

    In late 1992, my colleague at the table here, Virginia Albrecht of the law firm of Beveridge & Diamond asked me to work with her and the firm on a comprehensive study of the section 404 program. Our initial plan was two-fold:

    First, we wanted to update an earlier report I had done which revealed that over half of the people who apply for a section 404 permit do not succeed because their application is withdrawn before a decision is reached.

    Second, we wanted to learn how long it really took an applicant to go through the process.

    For the timing study we decided not to use the data collected by Corps headquarters because it did not focus on either the types of applications or the time periods we were interested in. What we wanted to know was: how long did it take an applicant from the submittal of the first application to final action to obtain an individual section 404 permit decision for a project on a typical construction site which included areas deemed to be wetlands?

    We were not interested in the more traditional water projects such as piers, wharfs, bulkheads, boat ramps, and maintenance dredging, nor were we interested in general permits which have preauthorized certain minimal impact activities.
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    The controversy of the section 404 permit program lies in the individual permitting process in wetlands, and that is where we focused our attention.

    In early 1993, we asked all 38 Corps districts to provide monthly lists of permitting actions completed in 1992. From these lists we selected 590 actions that appeared to meet our criteria. The Corps districts provided us the decision documents on 498 of these 590 cases. Of the 498, 88 turned out to not involve wetland impacts or contained too little data to be of any use. In the end, 410 applications formed our study base.

    In analyzing the decision documents from these 410 cases, we found it took an average applicant 373 days to get through the process. Only 7 percent of the applications complied with the 60-day time goal specified in Corps regulations. Almost two-thirds of the individual permit applications in 1992 ended up being withdrawn by either the applicant or the Corps. These are clear signals of a program in distress.

    Perhaps the most surprising finding was the small size of the projects being evaluated as individual permits. Just under half of the applications involve impacts to less than 1 acre of wetlands, 25 percent impacted less than a quarter acre, 15 percent impacted less than one-tenth of an acre, and 4 cases impacted less than one-hundredth of an acre. The applicant for one of these four, the town of Tiverton, Rhode Island, waited 2 years to obtain a 404 permit for mosquito control work disturbing nine one-thousandths of an acre.

    Because of our surprise over the small acreage, we decided to include a review of the national acreage wetlands loss figures. The oft-quoted figure of a national loss of 290,000 acres per year is seriously outdated. The data used by Fish and Wildlife Service for this estimate is more than 10 years old. It predates the Swampbuster provision of the 1985 farm bill and the many wetland restoration incentive programs now in place. Yet, it continues to be cited as an argument against reform of the section 404 program.
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    Some observers have concluded that the country is now in a net gain status, and there are statistics to support such conclusions. Our conclusion was that the Government should stop using the 290,000 figure and provide a more accurate figure of current losses and gains.

    You will find a detailed discussion of our acreage findings in appendix A of our report.

    After we released our report a year ago this month, there was a great hue and cry from the National Wildlife Federation and the Audubon Society, as well as the agencies, themselves, that we had cooked the numbers. All of our statistics were taken directly from Corps documents and verified by the Corps. We included all of the statistics in the report so that anyone wishing could draw their own conclusions.

    The agency says we were not telling the whole story by not including general permits. Our report acknowledged that the general permit program works better, but when the agencies lump general permits with individual permits, they mix apples with oranges.

    General permits are already issued. One need only comply with the conditions to proceed. On the other hand, individual permits do not exist until one has gone through the 1-year application review process, and even then has less than a 50/50 chance of walking away with a permit.

    We should point out that Corps statistics for the past two quarters reveal the Corps issued slightly more 404 permits than were withdrawn.
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    Mr. Borski, you asked that we look at current figures, and so we did do that. I have a chart here. I know you can't see it very well, but it shows the 5 quarters of data that have occurred since our report came out. The black bar is the number of withdrawals and the white bar is issuances. You'll notice in the most recent quarter that the number withdrawn is about equal to the number issued—512 and 514.

    But note the tall bar, which is the number of pending applications, which has taken a dramatic growth. It has gone from under 3,000 during the period we were studying to now 4,346 individual 404 permits in the hopper waiting for a decision. Sooner or later that tall stack of chips has got to fall somewhere—either onto the issuance, withdrawal, or denial bars.

    In going through the 6-foot high stack of decision documents, it was clear to us that most of the Corps project managers in the districts are doing everything they can to move the process along and reach a fair decision, but their hands are tied by an inflexible, convoluted, complex, multi-agency process, a process completely out of proportion with its desired purposes.

    One of our main goals in undertaking this study was to provide the Congress some meaningful information for deciding how to fix the section 404 program. We hope we have succeeded.

    My colleague, Virginia Albrecht, will now suggest how this committee might best take advantage of our findings. When she concludes, we will both be pleased to answer any questions you may have.
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    Thank you, Mr. Chairman.

    Mr. BOEHLERT. Ms. Albrecht.

    Ms. ALBRECHT. Good morning. I'm Virginia Albrecht. I'm a partner in the law firm of Beveridge & Diamond here in Washington.

    I have spent the last 10 years of my law practice focusing on wetlands issues and other Federal laws that affect the use of land. During that time I have been involved in numerous wetlands matters all over the country, representing landowners large and small as well as a variety of State and local agencies whose activities are regulated under the wetlands laws.

    As Bernie said, our study boils down essentially to two primary points: first, that we, all of us—landowners, Government agencies, individual citizens—are spending an awful lot of time regulating very, very tiny wetlands; second, the rate of wetlands loss is very much lower than it has been reported to be in the past.

    So our recommendations are aimed at first focusing the Federal effort on wetlands whose protection is in the national interest and, second, streamlining the process so that landowners can get a timely answer to the question of what they can do with their land and so that the costs that are borne both by the landowners and the Government agencies are commensurate with the environmental benefits achieved.

    Our suggestions are as follows:
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    First, give one agency exclusive authority to administer the regulatory program.

    Second, classify wetlands according to their functions and tailor the rigor of the permitting analysis to the value of the wetland that is at stake.

    Third, exempt minor wetlands impacts from Federal jurisdiction.

    Fourth, exempt small gullies and drainage-ways, the nonwetlands waters, from Federal jurisdiction.

    Fifth, provide for immediate judicial review of jurisdictional determinations made by the Corps or EPA.

    The committee bill already includes provisions that address the need for a single agency and classification, and we support these. I would say, however, that from our point of view it matters more that you put a single agency in charge than who that agency is selected to be.

    Giving EPA, NRCS, or even Fish and Wildlife Service exclusive authority over the regulatory program would be an improvement over the present hydra-headed monster. This does not mean that other agencies cannot contribute their expertise in watershed planning or, for example, in developing restoration incentives, but it does mean that one agency must write the rules, interpret the rules, and make the decisions about whether or not people can get permits.
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    On classification, we would urge you to reconsider the national mapping effort that is contained in the present bill. We applaud the goal to give citizens notice of the jurisdictional status of the lands that they own, but nationwide mapping will be a tremendous undertaking, and wetlands and waters are dynamic.

    We doubt that it would be possible to keep up with the changes in the waters and the wetlands, and yet the maps, because they would be official, would take on an authoritative status and would be difficult to change.

    We also suggest two exemptions: one for small wetlands impacts, perhaps less than half an acre; and the second for non-wetlands waters that are out in the west primarily. These are areas that are primarily drainage-ways or gullies that convey rainwater when it rains but are otherwise completely dry.

    As Bernie noted, 50 percent of the applications in our study involved impacts to wetlands that were less than an acre, and it took these applicants—the minimum time was 9 months, and it took most of them more than a year to get through the process.

    Also, we have seen, not through our study but in our experience working with wetlands applicants, the phenomenon, particularly in the west, in which Federal regulators claim that these tiny gullies are waters of the United States, and then, by doing so, establish a jurisdictional Federal hook over what should be principally local land use decisions.

    We believe that these areas and these kinds of gullies could be exempted from Federal jurisdiction without doing any real damage to the overall goal of wetlands protection.
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    Even if Federal regulation is withdrawn, many of these areas will continue to be regulated under a variety of Federal and State laws. Moreover, Federal involvement in these tiny areas is offensive to traditional federalism principles under which land use decisions are primarily in the province of local government.

    We also believe that establishing a floor for Federal involvement will help alleviate citizen disenchantment with the Federal Government in general. It is the frustration with intractable bureaucracy and the inability to reform it, we believe, that has led to the demand for property rights legislation that we saw pass the House last week.

    I seriously doubt—my experience with my clients is that they don't buy their property intending to sell it to the Federal Government. They want to be able to use it in a reasonable way consistent with protecting the environment.

    If the Feds step back even just a little, I believe it will go a long way toward relieving some of the frustration and the friction that has led to the demands for property rights legislation without jeopardizing the protection of important wetlands.

    Finally, judicial review—we believe that this is a very, very important point that has been overlooked thus far. As it now stands, a landowner who receives a jurisdictional determination from the Federal Government that he thinks is wrong has no recourse. There is no administrative appeal and there is no right to go to a court and test the validity of the Government's claims. The landowner only has two choices: he can go out and try and apply for a permit that he doesn't believe he needs in the first place, or he can say, ''The Government is wrong,'' and just go ahead with his project at the risk of enforcement.
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    On the other hand, if the Government decides that his land is not jurisdictional, his next-door neighbor, under the citizen suit provision, can sue immediately and challenge that determination.

    This imbalance is wholly unfair and must be remedied.

    Your bill has a provision for administrative appeals and we believe that's important, but we also believe that landowners should have the same rights as their neighbors do, which is to test the validity of Government claims to have authority over their lands.

    An important point here is that the way this has worked in the cases that have been developed is that the Justice Department has convinced many courts that Congress implicitly barred judicial review of these jurisdictional determinations, so remedying this we'll require an affirmative signal from Congress.

    Finally, if I could have one more minute, I'd like to make a couple of points that aren't related to our report but that arise from our experience together working on all of these projects.

    First, we think it is very important that Congress decide what it wants to regulate. We think that wetlands should be wet so that landowners have a sense of when they are on a wetland.

    Second, we think that there are tremendous opportunities to build some restoration incentives into the Federal wetlands program. What we see—and we think our figures bear this out—is that the biggest problem may not be loss. I think that the program is very effective and has ratcheted down the loss to the minimum it can be. But there are a lot of wetlands that can be restored, and we should be focusing on those incentives.
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    We have two ideas to suggest to you. One comes from the California Coastal Act, which essentially allows development in areas that have been deemed by regulators to be degraded. Once a wetland is deemed to be degraded, if the landowner comes in and then proposes a development activity that includes restoration of the majority of the site and with development on some portion of the site, a permit will issue.

    A second idea is what we call ''registered wetlands.'' Present law right now discourages anyone from creating wetlands or even allowing wetlands to form on their property because they know if wetlands form on their property Federal jurisdiction will attach with all the problems that we have seen.

    On the other hand, I think if people knew that if wetlands developed on their property that they would not become jurisdictional, they would probably allow that to happen.

    So we suggest that you consider a program where landowners would be allowed to register wetlands that did form on their property and exempt those from jurisdiction.

    We have a lot of other ideas. We'd be glad to talk about them.

    We thank you very much for this opportunity.

    Wait. I have one other thing.

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    I do know that the Federal agencies yesterday came out with some reforms, and we think that these are initiatives that are in the right direction. We don't think they are enough, and we think it has been 18 years since Congress acted on the wetlands provisions of the Clean Water Act, and we need some attention from the Legislative Branch.

    Mr. BOEHLERT. Thank you very much. I particularly appreciate your constructive suggestions.

    In your testimony you talk about applicants complaining that the regulations are complex and confusing and that the agencies administering the program make difficult and inconsistent demands, and that the length and the cost of the permit processes are out of proportion to the environmental benefits achieved. I agree with all of that.

    But you also point out that defenders of the current system point to two statistics that are concerning: first, that the Nation is losing 290,000 acres of wetlands annually; and, second, that only 5 percent of the wetlands permit applications are ultimately denied. I agree with that, too. That's a statement of fact.

    What we have to do is get very serious about this matter. We have to recognize that the system is somehow, if not completely broken, it is in need of repair.

    Your constructive suggestions are welcomed.

    I'll get to the other members of the panel in just a moment, but I want to comfort Mr. Palermo a little bit, because in his statement he points to something that—one of these apocryphal stories that everyone points to, and it is sort of making the rounds in this town and people are beginning to believe it, but it just ain't so. It's the story about the guy down in Florida who allegedly was just thrown into jail. ''What about the man in Florida who was put into jail for filling in his lot with sand. He was not only stopped, he went to jail. The American dream? No. The American nightmare.''
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    Boy, I would be just as concerned as you are if that story were true, but it's not. Let me tell you the truth of the story.

    The truth is that there is a man named O.C. Mills, and he was not, as some of the story-tellers have asserted, an innocent landowner who unknowingly ran afoul of the law. Instead, he purchased land, aware that the land had permit problems, and promptly began filing operations in defiance of the law and two separate cease and desist orders from the Corps of Engineers.

    Now, I won't go into all the details, but the judge who sentenced Mr. Mills said, ''Mr. Mills was fully prepared to take on the Government and he bought into the situation knowing that he may have environmental and permit problems. He bought into it, and he took his chances. He fought this thing from the beginning, and he has a right to fight it, of course. But to say that he was just trying to come along with an American dream,'' the judge says, ''I can't follow that one, and I see no excuse really for what Mr. Mills has done here.''

    That's from the direct quote of the judge. He bought land cheap because the land had permitting problems, and then he defied two cease and desist orders, so I want to comfort you somewhat, Mr. Palermo, and let you know that the Government is not as heavy-handed as some people would make it out to be and it is not throwing people in jail for taking some sand from their driveway and filling in a hole in the back part of their lot. It just ain't so.

    Mr. PALERMO. May I respond to that?

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    Mr. BOEHLERT. By all means.

    Mr. PALERMO. I have here in my hand a cease and desist order from my Government. It says here, ''You are directed to do no further unpermitted work on the site as it pertains to dredging and filling of land along a waterway.''

    Mr. BOEHLERT. Sure.

    Mr. PALERMO. Suppose that I chose to ignore this cease and desist order? Suppose I did on my own property?

    Mr. BOEHLERT. You'd be in trouble.

    Mr. PALERMO. You're right I'd be in trouble.

    Mr. BOEHLERT. As you should be.

    Mr. PALERMO. And I would have been in jail. But, unlike the man from Florida—which I did not know, sir—unlike the man from Florida, I could have been in jail. I had no conceivable idea that basically—primarily, Mr. Chairman, I'm looking at the wetlands application permit here. In no way, shape, form, or fashion does this have anything with what I intended to do or what I did with my property.

    Mr. BOEHLERT. Mr. Palermo, let me tell you I couldn't agree more with the basic thrust of what you are saying in your testimony, and I have had the opportunity to read through the full statement. That's why I know about this story. But some of your testimony just ain't so, and it's not because you are trying to mislead the committee, it is because you have been victimized by some of the stories that are repeated as if they are fact and they are not.
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    Let me point out, you point out that your land is worth $89,000 an acre.

    Mr. PALERMO. Yes, sir.

    Mr. BOEHLERT. Because it is at the intersection of two nice, magnificent highways. Did you send a check into the Government for a giving because the Government increased substantially the value of your property by putting in these highways? The answer is clearly no, nor would you be expected to.

    The fact of the matter is, as your testimony points out, you had 68 acres and you've got 5 acres of a truck stop developed and you've got a permit for 40 additional acres.

    Mr. PALERMO. Sure.

    Mr. BOEHLERT. And some of your acreage you are being told you just can't develop it. I understand why you might not like that, but I would hope that you would, upon serious reflection, understand why the Government oftentimes has to take some action in the interest of the overall good of the Nation.

    Mr. PALERMO. I understand that, Mr. Chairman, but you are neglecting to mention the value of the remaining 28 acres. It is $2.5 million, sir. That's a lot to give.

    Mr. BOEHLERT. You know why that land is so valuable, Mr. Palermo? It is so valuable because the taxpayers of America built those great highways right adjacent to that land, and they increased the value of it. But nobody is sending you a bill and saying, ''You own this land, Mr. Palermo, and the Government took action that significantly increased the value; therefore, we want you to send the Government a check.'' You wouldn't be for that, and neither would I be, but I think we've got to look at this on balance.
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    I want to assure you and all the members of this panel that we are very serious. Mr. Hayes and others on this committee have been working on this far longer than I have. They have pointed out to me repeatedly the flaws in our 404 permitting system. It needs to be improved.

    But I don't want to mislead anybody into suggesting that there is no need for such a permitting process or that the Federal Government is not taking, in most cases, responsible action for the common good.

    My times is up so I'll go on to Mr. Borski.

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

    Mr. Goode and Ms. Albrecht, your studies show that we are only losing 108,000 acres a year of wetlands rather than 290,000. Should we be happy with that? Is that reasonable? What should our goal be on this?

    Mr. GOODE. The 108,000 is from data from the Natural Resource Conservation Service on non-Federal lands, so it doesn't show the whole picture but, most importantly, it does not include the wetland gains that we think have been substantial and been reported as much as over 200,000 acres a year in some of the Government's figures.

    Your question on what appropriate loss should be, I think that the wetland loss should be a reflection of an expanding culture with the losses that are occurring in forests and other environments just because we are expanding development. I don't set any magic formula on what that might be.
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    Mr. BORSKI. Do you have any data on the gains that we have had in wetlands?

    Mr. GOODE. Some of the data on the gains is found in appendix A of our report, and the agencies reported to a White House task force in 1992 on some of those figures. I believe it was on the order of 200,000 acres a year that were being gained in recent years. That's why some have concluded that we are now in a net gain position in the country.

    Mr. BORSKI. I'm not sure of the answer. Could you tell me about the goal? What should our goal be? President Bush, of course, had a goal of no net loss of wetlands. Is that a reasonable goal or unreasonable goal? What do you think it should be?

    Mr. GOODE. To me it is not a reasonable goal.

    Ms. ALBRECHT. We may not agree.

    Mr. BORSKI. Mr. Goode, I thought you authored that.

    Mr. GOODE. You thought what?

    Mr. BORSKI. I thought you might have authored that no net loss.

    Mr. GOODE. No. I could tell you a lot of horror stories about no net loss.
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    Ms. ALBRECHT. I don't know if you can say no net loss. I think you have to—one thing that has happened in the 1980s is we became aware very much of the loss of wetlands that had been suffered over the years and a lot of action was taken to restrict that. I think swampbuster has been very successful. I think the agricultural reserve, the wetland reserve programs have been very successful in creating incentives for people to restore the wetlands.

    I certainly don't think that you should say, ''I'm going to exalt wetlands over all other forms of our natural resources that we want to protect.'' There are many uplands that are valuable as well, too. So I don't know. I can't answer what is the acreage that we should allow.

    I think you should have a program that fairly regulates the land and also aims to allow people to use their land in a reasonable way.

    Mr. BORSKI. Do you think it would be good science for Congress to legislate national standards for classifying wetlands before the National Academy of Sciences issues its report on the subject?

    Mr. GOODE. Yes.

    Mr. BORSKI. Ms. Albrecht.

    Mr. ALBRECHT. Yes. I think, to elaborate just a little bit, we are talking about Federal assertion of Federal authority, which is a jurisdictional question. It is a policy question. I think that really lies in the hands of Congress.
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    I think the scientists can help you decide what is valuable to protect and what you may want to protect, but in the end you all have to decide how far you want to go on that.

    Mr. BORSKI. And to follow up on my initial statement, have you all done any follow-ups to determine if the Administration's wetlands proposals had been helpful, significant at all?

    Ms. ALBRECHT. We have reviewed quickly some of the documents that were released yesterday, and I have also had occasion to have some conversations yesterday with some officials, and I think that it is definitely a step in the right direction, but we don't know yet whether or not—what they are talking about are proposed nationwide permits. We don't know if the nationwide permits, in fact, will be adopted. And they are very narrowly tailored to—it looks as if to residential projects.

    I think that's an important thing because I think one of the problems that has beset the program is the over-reaching with respect to small landowners, a lot of mom and pops. But I think that doesn't still answer the problem of how you make the individual permit program work in a way that is timely and fair.

    Mr. BORSKI. No further questions at this point, Mr. Chairman. Thank you.

    Mr. BOEHLERT. Thank you very much, Mr. Borski.
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    Mr. Hayes.

    Mr. HAYES. Thank you, Mr. Chairman.

    In a few moments I'm going to get a copy of what an appellate court judge had to say about the proceedings in Mr. O.C. Mills. Before I do that, I'm going to make a reference to an event the other evening that was down at the Smithsonian American History Museum for the Discovery Channel.

    I took a look at a lunch counter where some folks decided to break the law because they thought it was about time someone stood up for individual rights, where they, in fact, went to jail because they violated the law but where they brought about an extraordinary change that recognized the civil rights of human beings all across the Nation.

    Mr. Mills did that, himself. I think he deserves to be praised, not condemned. Otherwise, my colleague from Georgia, John Lewis, would still be rotting in a jail next to a bridge and we wouldn't have the Civil Rights Acts of 1965.

    Landowners are protected as much under the 5th as anyone is protected under the 13th, 14th, or, as far as that goes, my right to speak under the 1st Amendment.

    Let me get directly to Tony Palermo because I'm going to tell you some stuff about him you don't know and that is not in his file.

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    Mr. Palermo is, indeed, a developer. He is also a developer of one of the largest resources for the protection of natural habitat in the State of Louisiana. He has got six sections that are laid aside only to propagate and perpetuate the wildlife of south Louisiana under no court order, under no agreement, under no threat of sanctions. He spends over $80,000 a year of his own money to continue that operation. He plants over 1,200 acres a year of natural feed foodstock, and ongoing monitoring and ongoing stewardship of the large tract.

    He recently offered to two Federal agencies to put that in perpetuity as a gift from him to the country, to the people. That was turned down because they didn't view that as sufficient mitigation.

    Now I want to tell you about the piece of property he owns.

    It is exactly what that is. It is, in fact, a wetland in an area lower than sea level. So is every inch of this place, but you don't see people doing mitigation or 404 permits, do you? He lives in a city. His property is in the city limits. It is subject to city zoning. He went through city planning, just like they did, but nobody said that they had to set aside tens of thousands of acres in Virginia or Maryland, did they? Then let's apply the program fairly.

    Finally, let's take a look at what they did tell him, because this is the crux of where I disagree with the chairman in an intellectual basis, though I get a bit emotional about it.

    Here's what he was told by a Federal agency, by the Corps of Engineers in November 1994, so we're talking current. They said, ''Is there a need for additional car dealerships in the Calcasieu Parish or Lake Charles Sulphur area? If there is, provide documentation of this need by indicating how many dealerships there are, how many people they serve, how the number of dealerships is not adequately supplying the demand of the area, etc. In some cases marketing information, census information, economic data, and other documentation may be necessary.''
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    Folks, this isn't a Federal agency permitting water; this is a Federal agency zoning America. That's why so many Americans react to it, because now and again they make a mistake and even put it in writing. That's not a permit process, that's an assessment value and economic judgment.

    And telling him whether or not he can put a car dealership—does he mean GM or Ford? Will it matter which it is? Does the market information talk about whether those are imported or American produced vehicles? At what point does an agency involved in dredge and fill dredge and fill through the heart of economic activity for absolutely no environmental purpose? And that's the last point I want to make.

    This property is north of the interstate. The head of the Sierra Club in the State of Louisiana walked every foot of it and said, ''This is nonsense.''

    Now, Mr. Chairman, when you've got a Louisiana Sierra Club State officer, the chairman of the regional office in which this property is located, say it is nonsense to permit an area that should no more be permitted than that, I think we ought to fix something, and I think we ought to do it awfully fast, because if we continue to abuse so many people we may not be given the opportunity to fix it in an orderly process. We may, instead, have to put off a state of near riot because of their fundamental frustration with the denial of their rights.

    I'm not going to ask you any questions. Some of these other folks might want to. But I'll tell you this: there are more answers out there than there are questions if they'll just keep talking to people from home who have experienced this who, each and every time, did not have malice or premeditation. And Mr. Palermo, if someone asks you another question tell them about the Lopez family and what happened to them just for being friends of yours when they wanted to build a house in a residential subdivision.
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    Mr. BOEHLERT. Thank you very much, Mr. Hayes, for your usual eloquence. You vividly outlined—and poetically, I might add—why there is a need to change the present system. The present system is flawed. The present system is too burdensome, it is too costly, it needs to be changed. There is no doubt about that on this committee on either side of the center chair. That's what this work is all about.

    I appreciate particularly, Mr. Palermo, your story. And I want to commend you for your good deeds that have just been outlined by Mr. Hayes, and I will be glad to hear what Mr. Hayes has to report from the appeals court on our friend, Mr. Mills, down in Florida.

    Mr. Poshard.

    Mr. POSHARD. Mr. Chairman, thank you.

    Mr. Chairman, let me say that, as one person on this committee, I understand your sensitivity to this issue. I know your heart is in the right place, and I certainly want to work with you even though we are not at the same place on this issue at this point in time.

    Everything that Mr. Goode and Ms. Albrecht brought up I just want to substantiate, from my experience as a State Senator and as a United States Congressman. I grew up on a farm. My family are farmers. I don't know anyone in my district that has applied for a section 404 permit since I have been in this Congress that has ever received a decision within 60 days, honestly. And I don't blame the Corps for that. I don't blame anybody for it. I'm just saying it is a fact. For whatever reason, the elevation of the process to higher levels just seems to never end, and the commentaries that go on with that process.
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    People just can't get an answer, Mr. Chairman. That's our biggest problem. People deserve a decision.

    Pointing out something else with respect to the issue of no net loss, I don't know of any decision that the Corps has made—and, again, I'm not being critical of the Corps—that has ever been a one-to-one mitigation, ever. It is always at least 1.5 to 1 or 2, but most of the time 4 or 5 to 1. So if we are experiencing a net loss of wetlands in this country after the mitigation of everything that is going through, I fail to understand how that happens.

    And the fact that the majority of applications are withdrawn is just egregious on our part with respect to this process. That should never happen to American citizens who deserve a decision and then, out of frustration, withdraw their application for lack of a decision from the Government.

    Just to cite a couple of real quick things that are part and parcel to this process.

    Not far from my home, when an interstate was being built several years ago, the Department of Transportation took two creeks on the east side of the interstate and ran them into one so that it came through the interstate and out the other side. A gentleman built a golf course simultaneous on the west side to the building of the interstate.

    Today his golf course, because of what the Department of Transportation did, floods almost every spring and fall when we have considerable amounts of rain.
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    The DOT came in, looked at that design, said, ''It's our fault. We created that, but we'll fix it. We'll do the dredging and so on down to a nearby river, get that water off his property.'' He has to close his golf course down several weeks during the year.

    Fish and Wildlife sent a person to look at that area and determined that on a couple of holes of this golf course there was hydrophytic vegetation, hydric soil and, since water stood more than 14 days a year there, two holes on the golf course were wetlands, and we couldn't do the dredging.

    That's the kind of stuff that goes overboard with respect to our laws and the treatment of our people.

    We have been trying to build a lake in my home town because of lack of water, and this is just unbelievable, but in the area where we want to build a lake—and I know there is honest debate back and forth whether a lake should be built, and all that sort of thing, but here's what is holding the lake up. You can't see this headline, I know, from where you are sitting. What is holding the lake up right now is that someone determined that this area that is a potential for where we would like to build a lake is a habitat or a potential habitat for a water snake, a particular kind of water snake, a golden-bellied water snake. I'm forgetting exactly what it is called, copper-bellied water snake.

    Now this city, who has really very little money of its own—it is a small town—has to go in where no one has ever seen the copper-bellied water snake before, but only because this habitat appears to be a habitat that it would use, even though no one has ever seen one, no one knows if one has ever existed there. The only reason they are having to do this is because this is a potential species for an endangered species list down the road.
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    We have to spend tens of thousands of dollars now to do a survey and then DNA testing on the copper-bellied water snake if we find any snake blood in the area.

    This is the kind of stuff that I'm saying we just can't look at and say we are being reasonable with people. Can you imagine that we are having to do DNA testing on a copper-bellied water snake that nobody has ever seen in the area? But because it might end up on an endangered species list and because the habitat looks like a place it might exist, we've got to do this.

    I don't have any doubt when I look at the things that we are going through right now about the frustration of the American people in trying to deal with some of these things. Really, we have got to be reasonable. We've got to change the process to get decisions. Of course, we have to be concerned about protecting wetlands, but people deserve answers and they deserve, I think, common-sense approaches to this whole thing.

    Thank you, Mr. Chairman.

    Mr. BOEHLERT. Mr. Poshard, thank you very much. I couldn't agree more with your statement. I think we've got to change the process. The people deserve common-sense answers to very legitimate questions. I think we all have our own horror stories.

    Before I got involved with the Corps of Engineers on 404 permitting process I used to have a full head of hair, so I know what it is like. We've all got our stories. That's what this hearing is all about. We're going to hear some interesting stories, and we're going to hopefully pretty much stick with facts and not make-believe stories, and we're going to work consciously and concertedly to improve a system that is flawed, that every single member of this panel would agree is flawed.
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    Mr. Poshard, I'm counting on you for your help and cooperation as we go forward together to try to come up with a common-sense solution to the problem.

    Mr. Wamp, vice-chairman of the committee?

    Mr. WAMP. Thank you, Mr. Chairman.

    It is refreshing to hear Mr. Goode's testimony. I'm reminded that, as we try to uncover new revelations about these agencies, we would probably be better served to have more former administrators testifying than current administrators testifying so we would get a more accurate reading on the state of our regulations and the state of many of these departments.

    My question, having met with people from the Corps of Engineers both in my State and on a national level and asking pointed questions to those representatives and having them say to me, ''We are not policy-makers, we are policy implementors. If you change the policy, we will implement the new changes.'' I know when they get home at night and they lay down next to their wife they don't tell her the same thing they told me that day. They're probably saying, ''Boy, what we are doing here is stupid, but we've got to continue to implement it.''

    What is a reasonable modification in the threshold on size or square footage of wetlands if we look at some kind of reform so that we don't have such a high percentage of our wetlands very small sites?

    Mr. GOODE. I would suggest half an acre.
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    Mr. WAMP. Ms. Albrecht.

    Ms. ALBRECHT. That's what we thought. That was based on our study, which was—half the individual permits in our study were an acre or less, so if you got it down to a half an acre, you'd be getting rid of a substantial chunk of the problem areas, and I think without really seriously encroaching on wetlands protection.

    Our firm took a look—and I'd be happy to supply you with it—did an informal survey last summer of what would happen if Federal protection were withdrawn from small wetlands, and we looked at State wetlands laws and little NEPA laws—environmental protection laws—and also to State endangered species laws, and we found that in a lot of States—not all States, but in a lot of States, if Federal protection goes away there would still be a lot of protection out there. A lot of States have zoning and planning. California is a good example.

    Mr. WAMP. I would encourage you to provide us with as much documentation of the States' input to these problems as possible. Speaking as a member of the freshman class, the 10th Amendment is a real important amendment to the new people that just got to Washington, and we want to make sure that we do not supersede the States wherever we can leave decisions up to them and let the States be different if they choose to be different and make these decisions themselves.

    So if you can load up our files with information from the States, we will—from my perspective, sometimes in small deference to the chairman, I will work tirelessly for you.
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    I yield back the balance of my time.

    [The information received follows:]

    [Insert here.]

    Mr. BOEHLERT. Thank you very much.

    Mr. LaTourette.

    Mr. LATOURETTE. Thank you, Mr. Chairman.

    First, Ms. Albrecht and Mr. Goode, I want to extend my praise to you. I found not only your testimony, but your publication, ''Wetland Regulation and the Real World,'' to be illuminating. I always say it is a poor day when I don't learn something, and today I have certainly learned something.

    I want to ask a couple of questions because we're going to hear from the Administration later this afternoon. In particular, during the course of your testimony—your written testimony, anyway—there was a finding that the average wait for an individual permit is 373 days, I believe was your finding. We also, in the law, have an expression that ''justice denied is justice delayed,'' and it would appear that the 373 days impacts upon the withdrawal rate, which you found to be 50 percent, which, if you add that to the 5 percent denial, we probably have a 55 percent denial rate, effectively. I'd like to ask you if that's a correct observation in a minute.
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    But according to sort of a preview of what the Administration is going to talk about relative to some streamlining approaches that they have made—and I know that Mr. Borski asked the general question, ''How have you found the Administration's efforts to be to this point in time?''

    I believe that they are going to testify this afternoon that the average processing time is down to 127 days, and that only seven-tenths of a percent of applications are being denied. I guess I'd ask you: is that based upon information that they have received that has come in after you concluded your study? Or would you disagree with those figures?

    Mr. GOODE. I think you said 7 percent were denied. Maybe that's——

    Mr. LATOURETTE. Seven-tenths of a percent.

    Mr. GOODE. The denial rate is generally 4 or 5 percent.

    Mr. LATOURETTE. Okay.

    Mr. GOODE. The withdrawal rate tends to be around 50 to 55 percent, and the issued permits is the balance.

    I know we had one figure that only 7 percent of the decisions are made within the goal the Corps has set for itself of 60 days, which gives me the opportunity to make a point to the committee. Just specifying deadlines is not going to fix this problem. It is fundamental problems with the program that need to be addressed and not by specifying time limits.
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    If you want, those fundamental problems, just to tick off the big ones, are: that you need to decide which agency you want to captain this ship and put that agency with enough authority and responsibility and accountability to run the program; second, to put some water in wetlands that landowners can understand are wetlands; third, to think about some kind of minimal Federal involvement, either in size of impact or size of water body or both.

    Those fundamental problems, once fixed, will take care of your timing problems.

    Ms. ALBRECHT. Also, Mr. LaTourette, one thing that you may find on the number of days, it depends on what days they are counting. When we looked at it we were saying, ''What happens when the person first files the application, until they actually walk away and they either have their permit in hand or the permit is denied or the Corps has withdrawn the permit, so the whole process is over.''

    The Corps figures, in the past—and I haven't seen what they are going to be offering this afternoon—in the past have focused on what the Corps calls ''permit evaluation time.'' Permit evaluation time is a subset of what we have been looking at, and it eliminates the time from the first segment of the time, which is the time you apply for the permit to the time the permit is deemed complete.

    In our study, that time period took 91 days. The Corps previously—I don't know, again, what they will be saying this afternoon, but previously didn't count that period.
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    There is another period which we called the ''lead-out'' period which was, the Corps will make a decision, but even after they have made a decision it takes a period of time before they issue the document that allows you to go forward with your project.

    In our sample—and we only had 15, I think, permit applications that actually showed how long that took, but that took 30 days.

    That was 91 days on the front end that weren't counted in the Corps figures and 30 days on the back end that weren't counted in the Corps figures, so that was one thing.

    I think another thing is when you look at the figures you really need to examine whether they are looking at the individual permitting process, which is where the problem is, or they are lumping together individual and general.

    Mr. LATOURETTE. Right. And would it be your suspicion, just based upon your study and your analysis, that if you found 373 days to be the average for individual permitting, that if they come in and talk about 127 that, in all likelihood, we are lumping together general with individual and that's the average for all permits?

    Ms. ALBRECHT. I'd certainly ask them the question, because that would be sort of a major improvement.

    Mr. LATOURETTE. I'm always fascinated by the different perspectives, because they are going to give us a pyramid a little bit later. I have always found it is interesting which way you hold the pyramid. I think you would hold it this way and they are going to hold it this way.
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    Ms. ALBRECHT. Right.

    Mr. LATOURETTE. Thank you very much.

    I yield back my time, Mr. Chairman.

    Mr. BOEHLERT. Thank you very much.

    Mr. Martini.

    Mr. MARTINI. Thank you, Mr. Chairman.

    I, too, would like to thank Ms. Albrecht and Mr. Goode for their very helpful testimony and study. Just to follow up, without belaboring the point, as a former local and county official we, too, heard repeatedly of all of the complaints, primarily in the same areas that we have heard other colleagues here express their concerns about today—the delay process, the length of time for permitting, the cumbersomeness of the process, and the cost involved, particularly with respect to the relatively smaller parcels that would be impacted with the permitting process.

    Just in reviewing your testimony, in the conclusion, I guess the very last page you offer, by way of conclusion, the strong suggestion that there should be a delineation between a de minimis parcel versus other individual permitting parcels of a much larger nature.

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    It sounds terrific, and I'm just wondering, more specifically, how that would be implemented and if it could, in reality, be implemented in a much more expeditious way, and certainly in a much less-cost way for the smaller parcels that would be involved.

    It is a broad statement. What I'm saying is I see in front of me a broad statement, there should be an exemption for a de minimis parcel

    Ms. ALBRECHT. Right.

    Mr. MARTINI. But, more specifically, I didn't see in here the details of what you would propose by way of legislation that would streamline that process for those types of parcels.

    Ms. ALBRECHT. Well, what we are proposing initially would be a floor for Federal jurisdiction so that if you were below the floor the Federal Government wouldn't be involved at all, so that would——

    Mr. MARTINI. Eliminate.

    Ms. ALBRECHT.——very much streamline that process. And I think then, once you got into the Federal jurisdiction, we would suggest more use of general permits. I think the Corps is trying to move in that direction.

    One thing that is a problem in the present program—actually, two things that are a problem in the present program—is that even though the Corps has adopted a variety of nationwide permits, each Corps office retains the authority to require someone to apply for an individual permit, even though they would be eligible for a nationwide.
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    We don't know, because we couldn't tell from the documents we got from the Corps, but a lot of the permit applications that were in our study we would have thought would have perhaps qualified for a nationwide but, nonetheless, were in the individual permitting process, and that's why they took so long.

    So I think we would encourage people to use general permits and perhaps require a more formal process to remove somebody from the general permit program and put them back into the individual, because the individual program is where the problems lie.

    Mr. MARTINI. May I just follow up on that? What would you do in States that don't have adequate State laws if you exempted the de minimis parcels completely from Federal regulation? How could we do that if there are States that still don't have adequate State laws to even address that minimally?

    Ms. ALBRECHT. I think one big answer is going to have to be some kind of watershed planning and that would be some kind of a Federal/State partnership. That might be a good role for EPA to—if you keep on in the direction the bill is going now and you give the Corps the exclusive authority to make the rules and decide the permits, and EPA has a lot of expertise, perhaps it could be applied in the watershed planning. That would also take care of the situation where perhaps the States don't have laws.

    Mr. MARTINI. Just one further follow-up questions. Short of a complete exemption for those de minimis parcels, can you envision some kind of streamlined permitting process for those in lieu of a complete exemption from the Federal law?
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    Mr. GOODE. That's certainly one option, but I would recommend, as a better option, a legislative exemption based on the size of the impact that would fit right in with a number of other exemptions. Maybe it is a half acre. Maybe it is only a quarter of an acre.

    I would also put a size limit on isolated waters. A couple of weeks ago I was in San Diego on the top of their garbage dump that has depressions in it that the solid waste regulators say you've got to get those depressions out because the water is going to seep down into the garbage and get into the aquifer, but the wetland regulators say you can't fill them because they've got San Diego vernal pool ferry shrimp in them and they are proposed to be listed as endangered species, and the only way you can fill them is to spend well over $1 million in mitigation.

    But walking around, looking at these things, some of them are much smaller than this table here, and yet the Federal Government has no size limit to which it will regulate.

    Some States—New York has a 12.5 acre limit on isolated wetlands. The Federal Government could regulate something the size of this pitcher sitting here. There is no minimum limit.

    Ms. ALBRECHT. And, Mr. Martini, if you are saying, ''How would you streamline the process once somebody is in the process?'' what we think is the central problem is sort of endless consultation that goes on between the Corps and EPA and Fish and Wildlife Service. It goes on and on. And not to mention the State fish and game agencies, the coastal resource agencies, the coastal management agencies, etc., etc.
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    What you might do is build something in that would vary the amount of consultation according to the size or the value of the wetlands that are at stake so that when you've got a very—something, nonetheless, requires an individual permit, but it is still kind of not an extremely important wetland, you can just say, ''Go on and do this by yourselves, one agency.'' And when you get to one in the Everglades, then you are saying, ''Okay, this one we've got to really take a look at and it warrants this broader kind of thing.''

    So you might be able to statutorily build some kind of a graded system in.

    Mr. MARTINI. Thank you very much.

    Mr. Chairman, if I may just have the liberty, Mr. Tom Latham of this committee is not here today. He's in a markup of another committee. He asked me to ask this panel another question, if I may.

    Mr. BOEHLERT. By all means.

    Mr. MARTINI. On his behalf, not on my time. On his time, if you don't mind.

    Mr. Latham is interested in the following. He said, ''Congress is currently in the process of reauthorizing two major laws that are directly impacted by the wetlands issue—the Clean Water Act and the 1995 farm bill. It is also in the process of writing legislation concerning risk assessment and cost/benefit analysis, as well as a comprehensive review of regulatory issues.
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    ''In view of this situation, would you support a temporary moratorium on wetlands delineations or a moratorium on certain types of wetlands delineations? Do you have any comment on that?''

    That wasn't my question.

    Mr. GOODE. I'd rather have more information. I don't have a comment on that.

    Mr. BOEHLERT. If you prefer, you can submit your answers in writing and we would share them with Mr. Latham.

    Mr. GOODE. That would be fine.

    Ms. ALBRECHT. Okay.

    [The information received follows:]

    We would not support a moratorium on wetlands delineations. People buying and selling property or intending to farm or develop property need to know the boundaries of federally-regulated wetlands in order not to run afoul of the Clean Water Act or Swampbuster. Many local building and zoning agencies will not grant a building permit nor will banks loan money until Federal wetlands are delineated and verified. The same is true of Federal ''waters''—areas that do not qualify as wetlands but are nonetheless subject to regulation under Section 404. What is needed is for Congress to quickly legislate reasonable definitions of wetlands and waters so that there will be a strong statutory foundation for reasonable delineation procedures. In the meantime, the agencies must have the ability to make or verify jurisdictional calls under whatever current definitions and procedures are in place.
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    Mr. MARTINI. Thank you very much.

    Mr. BOEHLERT. Thank you very much.

    I want to thank all the panelists, Mr. Palermo, Mr. Goode, and Ms. Albrecht. Thank you very much.

    [Correspondence from the Delta Chapter of the Sierra Club follows:]

    [Insert Sierra Club statement here.]

    Mr. BOEHLERT. Our next panel consists of: Robert Szabo from the National Wetlands Coalition; Ronald Anderson, president of the Louisiana Farm Bureau; Charles Ruma from the National Association of Homebuilders; Calvin Ploof from the National Association of Realtors; and Rob Olszewski from the American Forest and Paper Association.

    I would like to tell all the panelists that your statements will appear in the record in their entirety. Members will be diligent about covering them very carefully. But we would ask, in the interest of time, if you would summarize your statement, which will permit more time for questioning.

    Mr. Szabo, you're up first.

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    Mr. SZABO. Mr. Chairman, thank you very much for the opportunity to testify today.

    The National Wetlands Coalition was established in September 1989 to work with the Congress to try to reform the 404 program. We have been at it ever since, and we are delighted that you are going to give it serious consideration this year and try to bring some common sense into this program.

    We very much support title 8 of H.R. 961. We also support H.R. 1330 and have for the time that we've been in business, as you perhaps know.

    There are a couple of points that we would make about the 404 program.

    First of all, I think it is important to note, Mr. Chairman, that this program was not designed by Congress to be what it is today. This has been said a couple of times. Congress did not intentionally vote to regulate from the Federal level 75 million acres of privately-owned property through a permitting process.

    Yet, today, through the evolution of court cases and judgments of the bureaucracies, this is one of only two Federal laws where a permit is needed from the Federal level to do something on your land. The other one is the Endangered Species Act, where sometimes a person is required to get a section 10 incidental take permit if the land in question is a habitat for an endangered species.

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    So the 404 program, Mr. Chairman, is a program that actually, until recently, was not known to most people, I would say. While it regulates like a zoning program, there are not maps of where these wetlands are located. The property records in the courthouses around the country don't have notices that in this parish or county there are Federal wetlands where the Federal Government has an interest in your land.

    Because of the definition of a wetland, it is not readily apparent to most people that a land in question is a Federal jurisdictional wetland.

    I happen to be from south Louisiana. When I grew up, we never heard the word ''wetlands.'' We used often the words ''swamps and marshes.'' We knew what those were. But we Louisianians have found in recent years that we live in Federal jurisdictional wetlands. The dry ground we lived on was, in fact, wetlands to the Federal Government.

    So it is inevitable that the kind of eruption that occurred on the House floor last week about private property rights would occur around this program where people are required to obtain a permit to do something on their land—75 million acres of it across the country. The presumption of the permit process is that the individual is to avoid altering the land, because that, indeed, is what the sequencing methodology of the 404 program requires, that a person avoid altering the land unless there is no way to undertake the activity somewhere else.

    Mr. Chairman, I'm not going to take time to go through every element of my testimony and every element of title 8 of H.R. 961 the bill. We support all elements of title 8 of the bill. But I want to report just very briefly on a trip we took recently through Louisiana where we went to four situations where there were wetlands permitting problems.
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    When we finished our trip, I was interested to note that in no place had an environmental group raised a concern that was creating the 404 problem. In two cases, people that didn't like what their neighbors were doing on the neighbors' land had raised concerns. A problem people once would have gotten straight between each other they now get straight through the Federal system. In two other cases, public entities were having trouble just working their way through the bureaucratic process of the 404 program.

    Let me recount each fact situation very briefly.

    The first situation was in St. Tammany Parish. The parish school board indicates that St. Tammany is the fastest-growing school system in the State. They add a school a year. St. Tammany is above Lake Ponchartrain in what we call the ''high ground of Louisiana''. They are spending $50,000 to $75,000 at each site just working through the 404 process. They always get the permit. The Corps has told them they are going to get their 404 permits. But it takes them 9 months and $50,000 to $75,000. In one case, the St. Tammany Parish School Board had to do mitigation in the western part of the State, not in their parish. They took tax dollars from their parish and they did mitigation in the western part of the State to satisfy the 404 permit program!

    We met with a subdivision developer in that same parish above Lake Ponchartrain. His proposed subdivision is next door to another subdivision. His cardinal sin is that the access road to his proposed subdivision, which sits on the same type of land, is through the estabilished subdivision, is now the same land. The neighbors in the established subdivision turned him in to the Corps, because they don't want the traffic coming through. The propsed subdivision is now caught up in the bog of the 404 process.
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    We then traveled to West Baton Rouge Parish on the very other side of the Mississippi River to a land that had been a stand of forest land. A man had inherited it, chopped it up into 5-acre plots, and was selling them.

    It is, I guess, a Federal jurisdictional wetland, but it may have a forestry exemption. He didn't realize, however, that he is covered by the program. He had sold several lots. One lot purchaser didn't like his lot and wanted his money back. The seller refused to give his money back. The unhappy buyer turned the seller in to the Corps, and now everybody that bought a lot is having trouble with the 404 program.

    Finally, we met with the mayor of Gonzalez, Louisiana. Under orders from the EPA to build a sewer treatment plant, the city has the money and is ready to begin construction. They have a the suitable site. The site is next to a concrete-pad tank truck cleaning facility. The Corps has told the city that it will take them about 9 months to get the permit. Meanwhile, the city believes the process will cost them about $75,000, and the city will be required to do $25,000 worth of mitigation but the city will get their permit in the end.

    The mayor's question to us was, ''If I'm going to get my permit in the end, I've got my money, I'm ready to clean up the environment by building a better sewer treatment plant, why do I have to go through 9 months and spend $75,000 of the people's money?''

    So, Mr. Chairman, we look forward to working with you to try to bring order out of this program.

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    Mr. BOEHLERT. I look forward to working with you to try to make order out of chaos so that 2 or 3 or 4 years down the pike, as this same subcommittee convenes, we don't have the same number and magnitude of horror stories.

    Mr. Anderson.

    Mr. ANDERSON. Mr. Chairman, I am Ronnie Anderson. I'm president of the Louisiana Farm Bureau, but today I'm testifying as a member of the American Farm Bureau Board of Directors, and trying to input from a farmer's perspective what is happening all over the country. But to do that I've got to go back and do it from a perspective of what we are used to in Louisiana and what we know there.

    Several years ago, when the no net loss of wetlands proposal was made, it really sent fear through all of us in Louisiana because in Louisiana we measure coastal wetland loss in square miles rather than acres. Several things are affecting that: the salt water intrusion and subsidence.

    So when you start talking about no net loss, the amount of acreage that we have as farmers and the small acreage there is totally inconsistent with the volume that is being lost in our coastal areas, and we have a real concern there. Those areas need to be protected and enhanced and refurbished, or whatever might be the proper terminology to doing it.

    We have had a system in Louisiana where we are dealing with—well, all over the country—we are dealing with four different agencies that we have to go through to get a definition and get a permit to handle a wetland in our State and in our operations.
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    The Corps of Engineers that has jurisdiction over the 404 system came in and built levees, drained—protected us in Louisiana from flooding from the Mississippi River, built drainage, drained land down there that is now in production, prior converted land. It was important then and is important now to protect our cities that are in that area that floods yearly—would have flooded yearly—and land that is drained and can be used for farming now.

    But when we go through all of that and we get involved with the definitions of what is prior converted and what can be lost, it is totally mind-boggling to us in agriculture the rules and regulations that we have to go through.

    We have pictures of land that is a jurisdictional wetlands that has been row cropped. You can see the stubble left there from corn and beans and cain in our area that are considered jurisdictional wetlands that are dry. If we can't walk on that land and see it is wet, it is hard for us to understand.

    When you deal with two different systems of defining that are confusing to us—and to many agencies, for that matter—it is very hard for people in agriculture, farmers, to know what is and what isn't and what we can and what we can't do.

    Valuable wetlands need to be protected. If it is value, of size, and of function, value and function that is good for the restoration of the water resources or the animals and birds that migrate through our State every year—or anywhere, for that matter—these are worthwhile projects, but they have to be limited, they have to be definable, and we need to know what is and what is not, and something that we can understand and be able to see as farmers.
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    There needs to be one agency that we have to deal with. When we have to deal with four different agencies, to us in agriculture Soil Conservation—Natural Resources Conservation Service under the new terminology—are the people that we deal with on a routine basis. They understand what we have and what we do not have. They've got mapping, they've got scientists, and they've got all the things that go into that process.

    We are in the process right now—we had a meeting in the State with the Soil Conservation service, or NRCS, last week talking about the MOA that requires remapping. When you go in and you've got a piece of property that you think is not a wetland that has been prior converted that you've been cropping, it could come under two different classifications, be governed by two different areas or two different agencies, depending on whether or not it is cropped farmland, wetland, or in pasture or orchards and those sort of things.

    When we are required to go in and actually, physically break that land to maintain our exemption, land that has been put into pasture, then you are defeating the purpose on two fronts: being able to stop the erosion, put in a permanent seed bed. But if we don't go in and break that soil, break that cover that is there, every 5 years, then we can lose our prior converted status.

    So there are many things that give us problems dealing with four different agencies, different delineation procedures and manuals, those sorts of things really give us difficulty. If there are ways to get around that system, if we can get into voluntary protection of wetlands and programs like the Partners for Wildlife, where you are able to go in and develop a wetland and you won't be penalized down the road but you can take that out if you see fit—most areas would not be taken out because it is marginal property anyway. But if you can do those things and enhance the program it would greatly help those of us in agriculture.
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    Mr. Chairman, thank you for an opportunity to testify today. I'll be available for questions if there are any.

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

    Our next witness I notice is from Columbus, Ohio. Mr. Ruma, how did you get in? You're not from Louisiana.

    Mr. Ruma.

    Mr. RUMA. Unfortunately, Mr. Chairman, the problem extends all over this country. There are different problems in Ohio than there are in Louisiana, however.

    Mr. Chairman, members of the subcommittee, my name is Charles Ruma. I'm a homebuilder from Columbus, Ohio. I serve on the Federal Government Affairs Committee of the National Association of Homebuilders. I also chair the NAHB's Clean Water Act Working Group, which is why I'm here.

    On behalf of the 180,000 member firms of NAHB, I wish to thank you for this opportunity.

    Mr. Chairman, I have had the opportunity to study the Clean Water Act in some detail. As a matter of fact, I have read all 500 pages of it and the regulations. It is the most trying episode of my whole reading career and I never want to do it again.
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    I can tell you this: I deeply appreciate what Congress did in 1972. I think all Americans deeply appreciate the fact that you have cleaned up our waters. By that, I refer specifically to the navigable waters that the act specifically called for.

    How we got from navigable waters, interstate commerce, to wetlands is unbelievable. How we could get from navigable waters, rivers, lakes, and all of the sudden get down to bogs, swamps, and potholes all over America is just totally unbelievable for any reasonable American, anybody who owns property.

    There are many important aspects of the Clean Water Act that are flawed and need reform. My written testimony provides a thorough discussion of policies within the act that NAHB believes can be revised to improve its efficiency and effectiveness. Today, I will address one of NAHB's highest priorities, that being section 404.

    Recognizing my time constraints, I will focus on two threshold issues critical to true reform.

    Congress must decide what the jurisdictional reach of section 404 should be. America needs Congress to define wetlands in legislative terms. It is up to you to define what we need to do with it.

    You too long have not given us the definition that we need. If you do, you will solve 90 percent of the problems. It is most important that you define the arena in which we must play.
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    Second, Congress needs ways to improve the way we can rectify wetland impacts when they do occur under section 404. This could be done through mitigation banking.

    The committee has before it a copy of our brochure, ''The Truth about America's Wetlands,'' which I would like to submit for the record. To illustrate the breadth of the current regulatory definition, I would refer you to the large area depicted on the cover of the brochure. No one questions that this is a wetland. The presence of standing water would prevent anyone from concluding otherwise. Indeed, common sense suggests that placing fill in these areas will have potentially significant impacts on water quality.

    However, applying the same logic—that wetlands should have standing water for some period of time—to the area in the inset photo on the cover or on the back cover, leads one to conclude that this area is not a wetland; however, both EPA and the Corps believe that it is, and that those areas pictured are, in fact, wetlands that must be permitted.

    Would the discharge of fill material to these areas adversely affect the water quality any more than discharging fill material in uplands? I would suggest not.

    The fundamental issue that Congress has never resolved is what Congress wants to regulate as wetlands under the Clean Water Act. This is not a technical question for scientists to answer, it is a policy question that Congress must answer. To put it simply, Congress must decide what a regulated wetland should be.

    NAHB supports the language in H.R. 961 that requires ground to be inundated for 21 consecutive days to be considered a wetland for purposes of the act. In effect, this guarantees that wetlands will, in fact, be wet. Most significantly, this will enable a lay person, such as myself, to recognize whether a piece of land I might purchase contains wetlands.
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    Turning now to the question of how we should rectify or mitigate impacts to wetlands that do occur, our brochure illustrates our ability to restore and create wetlands. The quiz on page 11 asks the reader to identify which of the wetlands pictured are man-made. The answer, believe it or not, is all. All four of those pictures are, in fact, manmade wetlands.

    If you want to promote this type of mitigation on a broad scale, we must expand the use of mitigation banks. NAHB supports mitigation banking because it recreates environmental benefits and because it works. I know it works because we are doing it in Ohio.

    The Ohio Homebuilders Association has established the Ohio Wetlands Foundation to develop mitigation banking to meet the requirements of section 404. That foundation has already restored 34 acres of wetlands near Buckeye Lake and is currently working on another 300-acre site at Big Island near Marion, Ohio.

    NAHB supports the provisions of H.R. 961 which promote mitigation banking. We believe it addresses many of the impediments to broader use of mitigation banking.

    Mr. Chairman, there are a whole host of other issues I would like to raise concerning section 404; however, I have attempted to use my limited time to focus on the two critical factors: definition and mitigation banking.

    Thank you for your time.

    Mr. BOEHLERT. Thank you very much, Mr. Ruma.
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    I, too, am enamored with the concept of mitigation banking. I know your schedule is very demanding, but we are going to have some later witnesses that will give us some good information about that, so you might have the advantage of their testimony. We might have some copies over on the other table.

    Mr. Ploof.

    Mr. PLOOF. Good morning.

    I want to first of all start out by thanking you for the opportunity to submit the National Association of Realtors' comments for the record on the Federal Clean Water Act.

    The National Association of Realtors is comprised of nearly 750,000 members in all aspects of the real estate industry and has a keen interest in the Clean Water Act, wetlands, and private property rights.

    My name is Calvin Ploof. I'm from Williston, Vermont, and I chair the NAR Environment Committee, as well as being a past president of the Vermont Association of Realtors.

    I would like to take this opportunity to thank you, Mr. Chairman, and the committee members for the leadership that you have shown on this issue.

    The Association believes that development should be encouraged, as it is a stimulus to the economy, increases the tax bases, provides places to work, places to live, and offers opportunities that would not otherwise exist. However, we also realize the responsibility we have to educate and work with local, State, and Federal Government officials in order to be able to develop responsible growth planning that is equitable and considers the divergent needs of transportation, housing, agricultural, commercial, industrial, and environmental concerns.
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    With that in mind, we feel it is very important to note that our Nation will not grow without the proper highway and water infrastructure.

    While we need an appropriate infrastructure, we feel we cannot continue to grow or retain the status quo without rectifying the current wetlands dilemma.

    The National Association of Realtors strongly supported H.R. 1330, legislation introduced in the 103rd Congress by representatives James Hayes and Tom Ridge, which would have provided for a classification of wetlands prioritized by function and value and would have set up a one-stop shopping concept for the permit system. It would have allowed for mitigation banking and provided for the public comment and notification of wetland designations to affected property owners. Most importantly, it would have provided for just compensation to property owners when their land was taken as a results of wetlands permit denial.

    We look forward to the reintroduction of H.R. 1330 in this Congress.

    The National Association of Realtors supports passage of legislation which would include:

    First, a standardized wetlands definition applicable to all Federal agencies and which requires reasonable and sufficient evidence of each wetland indicator;

    A clearly-defined, expeditious, and streamlined permitting process which allows those seeking permits to make application to and receive a response from a single Federal agency;
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    The creation of a priority wetlands ranking system which provides for protection of ecologically significant wetlands and allows permits to be issued in the case of wetlands of lesser environmental importance;

    A requirement that all local authorities and affected property owners be notified of wetland inventories to be conducted in their States and a proposed wetland jurisdictional determinations;

    And the use of wetlands mitigation banking as an alternative to the prohibition of use of wetlands.

    At this point I'd like to quickly go over some of the general comments and recommendations that NAR believes will rectify some of the current wetlands dilemma.

    First, NAR is supportive of a clearly-defined permitting process. To achieve this we recommend a concept likened to one-stop shopping and would recommend that one agency be the agency that is responsible for administering the program.

    Regardless of whether or not this recommendation would be adopted, we urge that the Government consider developing a checklist or a booklet from the approving Government authority outlining what permits are needed, what the purposes are, who does the processing, what the time is going to be, and what the cost should be.

    Second, we support a policy that will provide for a classification system for wetlands. We agree that the most environmentally-sensitive and useful wetlands should be protected because they serve vital ecological functions such as flood control, habitat spawning areas, and the like.
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    NAR is supportive of a legislative regulatory solution which would include some form of prioritization or ranking so that we could protect the most valuable of our wetlands while allowing private property owners of less ecologically sensitive properties the right to develop lands as they see fit within, of course, local planning and zoning parameters.

    NAR recommends that all relevant government entities and private property owners be notified of any wetlands delineations, and that they be allowed to appeal the wetlands delineations.

    Finally, NAR recognizes the vital necessity of professional competency to meet the challenges of real estate practice in an increasingly sophisticated and complex society. Professionalism in real estate, through education and training, is one of the primary objectives of our association. We encourage the Government to work with our association to promote public awareness of the value of wetlands, in turn, with our many local boards and associates the realtors can provide the Government with information as to how the regulation will impact real property owners.

    The 5th Amendment of the United States Constitution states that private property shall not be taken for public use without just compensation. This premise was one of the fundamental building tenets of our Nation, and it should remain so today; however, as a result of the Federal agencies' interpretations of the Federal Manual for identifying and delineating jurisdictional wetlands, many lands that are of marginal ecologic value are being incorporated into the wetlands system. As a result, this is having a negative impact upon housing affordability and the economy.
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    Thank you, Mr. Chairman, for the opportunity to express our views.

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

    Mr. Olszewski.

    Mr. OLSZEWSKI. Thank you, Mr. Chairman.

    Mr. Chairman and members of the subcommittee, my name is Rob Olszewski. I'm manager of Forest Hydrology and Environment for Georgia-Pacific Corporation. I'm here testifying on behalf of the American Forest and Paper Association today, which is the national trade association of the U.S. forest products industry, but I also want to make you aware that I am a small, non-industrial forest landowner in southern Georgia and north Florida. I'm also a professional forester. I've been employed with the Florida Forestry Association, with the Florida Division of Forestry, so I come to you with a lot of different perspectives today.

    Let me tell you just a few things about AFPA. AFPA member companies own and manage about 72 million acres, 17 percent of the forest land base in our country, and we account for 7 percent of U.S. manufacturing output. We employe 1.6 million workers in the growing of trees, manufacture of forest products, and we are very big in States that have substantial wetland acreage. In fact, if you look at the States of Alabama, Arkansas, Georgia, Louisiana, Minnesota, Mississippi, Virginia, Wisconsin, the industry is either first or second in payroll income and employment, so this is a substantial issue for us, obviously.

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    Private landowners are also very significant to the wetlands debate in terms of forestry issues. They are important to our industry. We get a major supply of raw material from small, non-industrial private landowners.

    I would like to touch with you today on three basic issues to focus on a narrow time constraint we are on here today. One is I want to touch on the exemptions for silvicultural activities and some problems that we are having in those areas; two, I want to focus on the classification issue; three, on the administrative appeals process which has already been brought up.

    We believe that our concerns should be able to be addressed with only minor changes to H.R. 961.

    First, let me touch on the exemption issue. And let me tell you one thing first: no matter where the whole delineation issue falls out, this is a big issue for us. The exemptions are a big issue. A major part of our base of raw materials comes from forested wetlands—and there are no two ways about it—no matter where you draw the lines of delineation out there.

    So we get very concerned as an industry when we see some reinterpretations and narrowing of the silvicultural exemptions occurring out there in the field with no real apparent environmental benefits.

    Section 404(f) exempts from the permit requirement certain normal silvicultural activities such as: plowing, seeding, cultivating, minor drainage, harvesting for the production of food, fiber, and forest products.
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    EPA has recently construed the phrase ''such as'' in section 404(f) to limit the exemption to the above-enumerated activities. Since the regulations were promulgated, the regulated forestry community has conducted many silvicultural practices that are not specifically listed but are fully consistent with those practices in the practice of normal silviculture.

    For example, things like site preparation after harvest, fire line construction—other things are normal kind of silvicultural activities that we conduct, but they are not literally listed in the exemptions.

    Clearly the term ''such as'' must be interpreted as examples and practices necessary to maintain ongoing forestry operations, and these activities should also be considered exempt. Even EPA in the 1993 Tulec rule states that ''certain discharges such as those associated with normal farming, silviculture, or ranching activities are not prohibited by or otherwise subject to regulation under section 404(f).''

    The list of exempt activities preceded by the modifier ''such as'' is necessarily general. It refers not only to silvicultural activities but to agriculture and ranching activities, and it refers to these activities all over the country and, by nature, they vary a lot.

    EPA's new and what appears to be a narrow interpretation of this language does not appear to have foundation in law to us, or recognize the complexity of land management activities in such diverse areas around the country.
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    One thing I do want to make you aware of along the lines of this topic are we are in some dialogues with EPA, and they are trying to constructively have some discussions of these issues with us. We give them credit for that and compliments. We are optimistic, but we are realistic, too, and we are concerned about the way those discussions may turn out.

    In terms of the issue of classification, the bill introduces a type A, B, and C classification. AFPA members are not opposed in principle to this concept, but we are concerned and we want to make certain that silvicultural activities can go on in these systems. These wetlands won't be classified until a permit request is actually made, which should help our issue and our concern on this topic.

    The Conservation Foundation sponsored a national wetlands policy forum a few years ago, and that forum consisted of folks from the environmental community, folks from key agencies, academics, folks from the forestry community, and everyone agreed at that point in time as part of their report that appropriate forest management practices result in relatively little reduction in natural wetland functions.

    We have done a lot of research as a result of that effort, and we committed to do it as part of that effort. In fact, since 1988—and we started to do this in a severe economic downturn in the industry—the industry has been investing over $1 million a year annually to evaluate our practices and, where appropriate, modify our practices to ensure compatibility with the wetland ecosystem functions.

    Not being a forester, I have to tell you that these systems are very important to us to manage. They are very important from a wood supply aspect. I want to tell you that we can protect them, we can protect the functions of wetlands while we manage these sites for forest products.
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    AFPA, in one last issue, supports the wetlands appeals process. That has been raised as an issue already today. We believe the appeals process will allow small landowners reasonable opportunity to find some resolution through an administrative hearing rather than in the courts while being subject to civil penalties and criminal activities.

    I'd like to thank you again and express our appreciation for being given the opportunity to testify. We believe H.R. 961 is on the right track, and with some minor modifications can address some of the problems that the forest products industry currently has with the section 404 wetlands program.

    Thanks. I'll be pleased to answer any questions, Mr. Chairman.

    Mr. BOEHLERT. I want to thank all of the panelists. Let me emphasize once again that your full statements will appear in the record in their entirety.

    Let me open the questions by asking all of you—you are all business people, and you have a legitimate complaint about the length of time involved in the permitting process. If we can streamline that significantly so that it is not indeterminate, as it has been too often in the past, can you accept a final product that doesn't have the takings provision, which no one has been able to identify in terms of what it is going to cost, what the implications are financially?

    Is $10 to $15 billion a pretty good estimate? Congressional Budget Office can't estimate the cost. Congressional Research Service can't estimate the cost. The authors of the bill can't estimate the cost. No one has been able to estimate the cost.
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    So if we can do something that is significant in terms of streamlining the permitting process so that you have what you deserve—the right to put a permit application in and get a timely answer—would that be good enough? Or do we have to have this compensation provision of the total package?

    Mr. Szabo?

    Mr. SZABO. Mr. Chairman, I think that what we would ask you to do is to back the Government off of people's property as far as possible and try to limit the intrusion into people's property.

    Mr. BOEHLERT. That's a shared objective.

    Mr. SZABO. I think that is a shared objective and hopefully that will happen. But inevitably somebody's private property is going to have to give way to the overall public good. That's just inevitable if you are going to regulate property.

    Then Congress has a choice: do you drive people through the current ''takeing'' process, which is to go to the Claims Court, spend 10 years, prove that virtually all of the value of your property has been taken? Or do you provide some kind of mechanism for those special cases where individual property rights are going to have to give way to the public good under the 404 program?

    We think you ought to provide a special situation for those cases when private property rights must give way to the public good, so we think some sort of compensation mechanism is going to be necessary.
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    Mr. BOEHLERT. But, counsellor, you are familiar—I'm not an attorney. You are.

    Mr. SZABO. Right.

    Mr. BOEHLERT. You are familiar with the 5th Amendment. We've got that 5th Amendment protection. That's not sufficient for you?

    Mr. SZABO. What we are saying, Mr. Chairman, is that the 5th Amendment defines the outer limit at which Government can act. We are suggesting that you should not push the people to the outer limit of where you can act, but draw a more reasonable line that government will not cross under the Section 404 program, whatever that line may be. I know how difficult it is for you to do what you are doing. I have witnessed the Congressional debates on this issue. I watched it last week. It is very difficult.

    But we are saying—those of us that are concerned about this issue—that you are regulating to avoid altering wetlands. Where the wetlands in question is private property, we are saying that it is not reasonable, in our view, to use the power of Government to the outer limit of the Constitution, but to draw a line somewhere else where you think the burden of protecting wetlands has been done enough by an individual landowner.

    Mr. BOEHLERT. I appreciate that. I just want you to help me draw that line.

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    Mr. SZABO. I wish I could, but I don't know how to either.

    Mr. BOEHLERT. The constituency we are most concerned about are those people from coast to coast that are the taxpayers of America.

    Mr. SZABO. Right.

    Mr. BOEHLERT. To suggest that we embark upon a new program that might have the potential for imposing a $10 to $15 billion liability on them causes me great concern.

    Anyone else on the panel? Mr. Ruma?

    Mr. RUMA. Mr. Chairman, a reasonable, recognizable definition would minimize the potential impact of the compensation provision. You can eliminate 90 percent of your problem if you just get down to brass tacks and define it.

    Now, if you do take property—and this is America—if you are going to build a road and take property you pay for it. If you are going to build a park and take property you pay for it. Fortunately, we live in this country where we do have private property rights.

    I would have to say that if there is a taking for the public good as a wetland, then certainly compensation should be a part of it.

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    But the key is: eliminate the number of applications by strengthening the definition.

    We have a board here that is the fold-out section of that brochure that I had presented to you earlier. If you can see it——

    Mr. BOEHLERT. I'll put it under my pillow tonight.

    Mr. RUMA. If you open up that to the middle, you'll see this board. That's what 373 days is all about when you are talking about processing an individual permit. That's the maze that we, in the business, or we, the landowners of this great country, have to go through.

    I commend you for taking up the cause to solve the problem.

    Mr. BOEHLERT. You are in business and you want and you have every right to expect timely decision-making from your Government. It is just unreasonable on the part of anyone to expect that in the name of some public good up there that we can delay decision-making forever and ever and ever. I understand that.

    But I guess my basic question goes back to the beginning. If we can do what we need to do in terms of streamlining the permitting process in order to guarantee you the timely decision you want, is that going to be sufficient to make you breathe a little easier and live a little more comfortably?

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    Mr. RUMA. I don't believe you can. I don't trust the system. I'm afraid. I'm afraid of the system. I'm afraid of the bureaucracy that is existing in this town.

    Mr. BOEHLERT. I want to calm you down a little bit. There are a lot of things wrong with the system, but I'll tell you what, it has worked pretty damn well over the years. It has stood the test of time all these two centuries plus. I'm reminded of the fact—and we don't want to go into that—from all over the world there are people risking everything to come here to share what we have.

    We have got a few imperfections in our process, and we are here today to try to address those imperfections, to see what we can do to make a pretty darn good system a better system.

    Well, you notice that we are privileged. The chairman, Mr. Shuster, just had to depart, but he was here momentarily. And we have the ranking minority member, the former chairman of the committee, our good friend Mr. Mineta.

    Mr. Mineta, you are recognized.

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

    I really do appreciate everyone's taking time from their own busy schedule to be here to testify before us.

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    First, I'd like to ask Mr. Anderson of the American Farm Bureau: my question regards your recommendation that an area not be considered a wetland absent the presence of all three elements, the hydric soils, the hydrophytic vegetation, and the third element on wetlands hydrology. There you define wetlands hydrology as ''free water at or above the surface for 21 consecutive days during the growing season.''

    I would like to ask if you have the scientific justification for this approach? And what would be the impact on the number of acres that are considered wetlands? And, probably more importantly, how would the reduction in areas considered wetlands translate into a loss of important wetlands functions such as flood control, source for fisheries, and water purification?

    Mr. ANDERSON. That's a long question with several parts to it.

    Mr. MINETA. Let's start with the scientific justification for free water at or above the surface for 21 consecutive days during the growing season.

    Mr. ANDERSON. Well, if you are going to have a wetland it needs to be recognizable, and in Louisiana we have saturated soils—and I'm going to have to use Louisiana as an example to answer your question. We have saturated soils through most of our winter and non-growing season, but as our weather conditions change and the weather warms and the rains cease, these are very productive lands. They are not recognizable through most of the year as being a wetland. So it should be a recognizable amount of water above the surface that we can see.

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    Another part of your question dealt with——

    Mr. MINETA. Even on that one, though, it doesn't necessarily have to be water on the surface. It could be water at the root level that could change in terms of the hydric soils as compared to wetlands hydrology. Is that not the case?

    Mr. ANDERSON. You need all three of the different characteristics to be shown. That really is a policy decision that you are going to have to make to decide that particular issue.

    Mr. MINETA. But part of the controversy is that we have made that policy decision and many like you are questioning that policy decision.

    Mr. ANDERSON. I think you need to look at it and extend that period to where it would be better suitable and more recognizable by individuals out there.

    One of the questions a while ago came up about 75 percent of the jurisdictional wetlands in the country are on private land. We are individuals that aren't attorneys. We aren't scientists. We need to be able to look at that property and be able to have some sort of reasonable approach to be able to recognize this as being a wetland and to stay out of it, to know we need a permit to be involved in that process.

    Mr. MINETA. Let me then turn to Mr. Ruma. One of the things that you have advocated is the classification and mapping of wetlands. I'm wondering if you have any idea as to what the cost of that would be and how that should be paid for?
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    Mr. RUMA. Mr. Mineta, I did not specifically identify mapping as being a proponent for mapping. I think what I said was I favored Congress taking initiative to define wetlands. I separate both definition and classification. I hope you will take the time to permit definition to occur, so once we can define those items that are critical to function and value in a wetland, we can then classify. That's the answer.

    Mr. MINETA. But the question is, we have. As I said, some people have said 7 days is sufficient, not 21 days. Now the controversy comes up.

    Mr. RUMA. The days are one factor.

    Mr. MINETA. I realize that.

    Mr. RUMA. There are several factors. There are agencies—the Corps at Vicksburg now has a rating system that I think is close to perfect. I think if you take the time you'll find rating systems that really evaluate what is important to us in preserving wetlands.

    If you will do that, you will make sure that those pristine areas that we in this country want to preserve as wetlands will be protected, and those that aren't we can work with, and those that have no justification we can go ahead and fill without being regulated. That's the answer. That's what is going to solve this issue.

    Mr. MINETA. Let's say, even in terms of definition, is that a static situation? Is that something that has to be reviewed over a period of time? Or is it a one-time?
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    Mr. RUMA. I would hope that we are all intelligent enough to know that everything is going to be adjustable from time to time; however, what is even more important is to understand that the factors that apply in Ohio don't apply in Louisiana. The factors that apply in Louisiana do not apply in Arizona. There are different conditions for different areas, and that's why this is such a tough problem.

    If you can work the definitional data out, you are going to have the problem solved.

    Mr. MINETA. Because of the fact that there isn't a one cookie cutter approach, would you advocate that be done legislatively?

    Mr. RUMA. Absolutely. That's the only way to do it.

    Mr. MINETA. You would legislatively——

    Mr. RUMA. This is a—today it is a political and social need. We Americans don't understand that when you fill in a hole it is polluting wetlands. This concept is new to us. It is 10 years old. We forever have not been regulated.

    Try to understand that pollution to us is chemicals and toxic agents into water. When you start talking about dirt into water, silt and sedimentation, it is a different issue. We don't understand that, and we are just coming to realize that. That's the real problem.

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    So it is a political and social need that we need to solve. That can't be solved by scientists. You've got to do it.

    Mr. MINETA. I guess maybe I'm confused then. You are saying that there has to be a legislative solution to the definition of wetlands?

    Mr. RUMA. Absolutely.

    Mr. MINETA. And if a scientist tells me it ought to be 7 days, then that goes into the legislation? Mr. Anderson says 21 days. That's why I asked him if there was some scientific approach as to why his 21 days, as compared to someone else who says 7 days. How do we——

    Mr. RUMA. I think Mr. Anderson's answer, and so is mine in terms of 21 days, is being able for a layman to physically see what a wetland is. That's not a hard concept to understand.

    Mr. MINETA. But a wetland——

    Mr. RUMA. But that's different than what we are talking about in the definition.

    Mr. MINETA.——difference in the characteristic from underground water to the roots of something that shows above the ground. Does it necessary mean there has to be water present on the ground? So the question then is: everyone agrees that these three elements have to be present in the definition of a wetland, and there is no disagreement there. The question then becomes: what are the elements? What are the details of these three elements that ought to determine then what the wetlands ought to be? That is why you are here testifying, and that's why we are here on this side having to make that judgment.
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    It is not a question of more intellect, less intellect, whether any of us are rocket scientists or not. That's not the question. The question we are trying to determine is public policy, and we would hope that it would be based on some type of solid—if I could use the phrase—''solid ground'' so that there might be some at least scientific foundation for the public policy that we have to determine.

    I appreciate the chairman's time that he has given me on this. And I again thank all of you for helping us try to determine what that public policy should be.

    Thank you very much.

    Mr. WAMP [ASSUMING CHAIR]. Thank you, Mr. Mineta.

    The Chair recognizes the ranking minority member of the Water Subcommittee, Mr. Borski.

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

    Let me follow up, if I may, Mr. Anderson and Mr. Ruma, on something that Mr. Mineta has raised.

    You do not believe that the definition of a wetland is a scientific decision; is that correct?

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    Mr. RUMA. I believe that science has to play a major part in determining the factors, but the responsibility for coming up with that definition has to lie in this Body.

    Mr. BORSKI. Wouldn't it be better for the scientists to determine what is a wetland and then for the policy-makers to determine what level of protection is allowed to take place in that wetland?

    Mr. RUMA. I would suggest that it would be. I suspect—I thought this Body had requested the National Academy of Sciences to do that in 1993. It is now 1995 and there is no hope of—I keep hearing that it is going to be coming in 2 months, but I have heard that for a year and I'm certain you have, too. I think it is time to get down to brass tacks.

    If you turn to your Army Corps of Engineers, they've got rating systems. If you turn to EPA, they've got rating systems that they know about that are working in conjunction with the Army Corps of Engineers. Get down to solving the problem. It's time.

    Mr. ANDERSON. Could I comment on that?

    Mr. BORSKI. Yes, sir.

    Mr. ANDERSON. The scientists don't agree. You will get two different scientists that will come in and tell you what is a wetland and all of that sort of stuff, so that's one of the problems that you get into.
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    What you are going to have to decide, in my opinion, is what is of value. How large an area? What is the function of it? What value is that to the water resources? What value is it to wildlife?

    Then you need to decide what to regulate and what not to regulate and to what extent.

    Mr. BORSKI. Let me ask a follow-up, if I may. Are you happy with the Corps' delineation process as it exists today?

    Mr. ANDERSON. It depends on what Corps district you are in. In Louisiana we are split between several Corps districts—New Orleans and Vicksburg. The personalities of those districts come into play in their decisions that are there, so there is no uniformity—not total uniformity—within those districts.

    Mr. BORSKI. Mr. Ruma?

    Mr. RUMA. I mirror Mr. Anderson's reply. I can tell you that the Huntington District has already worked with us and cooperated with us in producing the first two very creative mitigation banks in Ohio, and are working with us on the third. It has been 4 years of working with the Buffalo District, and we are finally getting somebody to listen to us after we have already shown success. This is a hard task, and it is not—we are not dealing with the same animal when you talk about the Corps. Each district is different.

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    Mr. BORSKI. Thank you, Mr. Chairman.

    Mr. WAMP. Thank you, Mr. Borski.

    Before the Chair recognizes the gentleman from Maryland, let me make a couple of announcements.

    In the event that the bells go off and we go to the House floor for a vote, we will continue on. I will sprint to the House floor and come back and Mr. Gilchrest will take the chair so that we can carry forward.

    Let me make a notice in advance that the next panels, panel three and panel four, will be combined for the interest of time, so all four panelists can look forward to coming on now so that we can keep this process moving quickly.

    And then just a passing comment before I recognize Mr. Gilchrest.

    As a new member of this committee, let me say that while there is strong bipartisan agreement on many aspects of the Clean Water Act, there is not agreement within either side on section 404 and wetlands legislation. I, for one, certainly am more sympathetic to your cases today. My colleagues that agree with me aren't here, so if you think you are outnumbered, just hang on, the troops will arrive.

    I recognize the gentleman from Maryland.

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    Mr. GILCHREST. Thank you, Mr. Chairman.

    You can tell from Mr. Wamp's accent he is probably from Queens, New York.

    Mr. Olszewski, you mentioned something about an ecosystem, which is a word that comes around here every once in a while and many of us find it difficult to tag a definition to ecosystems. You talk about your particular industry being concerned about wetlands ecosystem management and being sensitive to that.

    Could you very briefly—because I want to ask each member of the panel a question—could you summarize wetland ecosystem management?

    Mr. OLSZEWSKI. Very basically, it summarizes the interactions that occur between the physical and biological environment, the system there, and how they all inter-relate with each other, and how our forest management activities would affect those operations.

    We are a little bit concerned in terms of this bill. There is a reference towards ecosystems in the watershed management section, I believe. We have some concerns about that and how it is referenced. Different landowners have different priorities and objectives in terms of how they manage their properties. It has significant implications for us.

    Mr. GILCHREST. Do you think it goes too far in the act? Do you see ecosystem management as too strict?

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    Mr. OLSZEWSKI. We are concerned about how it is framed in that watershed section of H.R. 961 and how it might be applied at the State level, even though the watershed section at this point is voluntarily by the State at the State level.

    We can do some things as a major landowner at Georgia-Pacific with large blocks of timberland that, for example, a small landowner can't do. We would be concerned about how an ecosystem management watershed approach would affect small landowners in terms of their management decisions out there. It is of concern.

    Mr. GILCHREST [ASSUMING CHAIR]. Do you think, though, in large tracts of forestland, that those people who are engaged in this particular agricultural endeavor or silviculture activities across the board need, in this day and age, to be at least somewhat sensitive to what an ecosystem management approach is?

    Mr. OLSZEWSKI. Certainly. No question about it, Mr. Chairman. As large forest managers, we make management decisions on tracts of timberland every day based on far more than the growth and yield of——

    Mr. GILCHREST. But could you tell us why it is important to be sensitive to ecosystem management?

    Mr. OLSZEWSKI. We at Georgia-Pacific feel like we bear some responsibilities, more than just kind of the growth and yield of the forest—to provide habitat, to provide water quality protection—to be concerned about a much broader base of stewardship of those resources.
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    Mr. GILCHREST. We want to create legislation—and we realize our responsibility to do that—create legislation that is workable. There are people on the planet now, so we need to manage the resources with an idea that there are people on the planet, not manage the resource with the idea that there are no people on the planet.

    But it is with the sensitivity to a wetlands ecosystem management approach, you can—as long as it is reasonable—I understand the word ''reasonable'' is relative here—you would then have much less negative impact on someone else's well or drinking water or somebody else that lived downstream as far as the amount of soil runoff into a river or stream.

    Mr. OLSZEWSKI. The term ''ecosystem'' has very broad-based implications. We would be concerned. We can do some things, for example, as large landowners to assure that we have age class diversity of the timber stands through the landscape. On the other hand, if the Government would like to regulate a watershed to get that to occur, it might put some pretty severe constraints on a small, private 100-acre landowner out there, and we'd be concerned about how that was applied.

    Mr. GILCHREST. That's when we would have to come in and provide incentives or really help.

    I'd like to move to Mr. Ploof.

    Mr. Ploof, I want you to sort of go back to when you were in the seventh grade and the teacher came in and gave you a pop quiz that you didn't necessarily know you were going to get. Okay?
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    Mr. PLOOF. Okay.

    Mr. GILCHREST. Why is Lake Champlain—what keeps the water in Lake Champlain swimmable, drinkable, and fishable?

    Mr. PLOOF. I think a good many years of——

    Mr. HAYES. I would love to see the EPA definitions as they define everything else. This statute doesn't define it. The regulators do.

    Mr. GILCHREST. I did recognize this was an unfair question, Mr. Hayes, but I thought we'd just try it. I've got a couple of seconds left.

    I don't expect a scientific answer. I'm just curious as to your frame of reference to what keeps water in your neck of the woods, as opposed to down in Louisiana, clean.

    Mr. PLOOF. I guess the quickest answer would be a lot of hard work by the inhabitants of the area.

    Mr. GILCHREST. Thank you very much.

    Everybody's gone. That means I have the podium. I guess I could keep going here.

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    I'm not going to dismiss you guys. You know what I might do? Let me ask another quick question. I've got 10 minutes. If I could just ask a couple more questions we'll hold you here, because I'm sure Mr. Hayes and Mr. Bateman will want to ask a few questions.

    Mr. Szabo, could you just describe for us—first of all, we recognize there are problems with the Corps, with EPA, with Soil Conservation, with Fish and Wildlife, with all kinds of other complexities that we need to walk through to solve this problem of an over-bureaucratic, insensitive regulatory system that we sometimes find ourselves in. So we all recognize that.

    But I just want to make sure that we are also—sometimes when we come into these issues we come into it from a different perspective. We have a different frame of references upon which we base our decisions.

    We all agree that the bureaucracy, to a certain extent, is over-reaching. If anybody down there disagrees with that, you can raise that.

    Mr. Szabo, can you describe to us—another pop quiz—thank you very much for that answer, Mr. Ploof. I was a school teacher before I got here.

    Can you describe to us the value of a wetland? We sort of know what a wetland is—marsh, bog, swamp. And can you describe for us another term, a ''nontidal wetland'' as far as its function and its value to water quality is concerned? Just put aside the other——

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    Mr. SZABO. I think there are all kinds of wetlands and they have different functions and values. All wetlands don't have all the functions and values of wetlands. The marshlands in south Louisiana, for example, the ones that are right along the coast, are obviously extremely important because they begin the feeding cycle for the fish that live in the gulf. Clearly these wetlands are very important. Clearly they are very important as a buffer zone for the hurricanes that hit our coastline.

    I think other wetlands have—the environmental community says they serve as kidneys, that they clean and purify water and that they are the surge for flood control. I think we all agree with that description.

    The only point upon which I disagree with the environmental community is that sometimes the environmental community would lead you to believe that all wetlands have all functions and values, and that's not so.

    As far as a nontidal wetland, those are the ones that are more inland, and I think they don't serve as much of the hurricane protection role and provide as much of ''the beginning of the feeding cycle'' role in the Gulf of Mexico as South Louisiana.

    Mr. GILCHREST. I think you make a good point. In my area, the Chesapeake Bay, the nontidal wetlands serve an invaluable function because most, if not all of the water, the enters the Bay from the eastern shore, where my district is—we have no rivers over there, we have tidal basins, and so most of the water that comes down in the form of rain that finally gets into the Bay percolates through the nontidal wetlands into the groundwater and then gets into the Bay. If we lose a lot of our nontidal wetlands, we lose the value and the economic value of the Chesapeake Bay.
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    So I think we alluded to this earlier. There are a number of differences between different parts of the country, as long as we have some understanding that the value of clean water is for everybody.

    Thank you.

    Mr. WAMP [resuming Chair]. Our counsel says the least the committee could do is buy me some tennis shoes, but this is the way I get a little exercise. With the Taco Bell reception tonight at 5:30, I needed it.

    Let me ask a question that came up at the last panel, if I may, while we are waiting for the other Members to vote and return to the hearing.

    The recommendations of the first panel on the minimum size threshold for a classification as a wetland was a half an acre. I'd like for your input into what you think that threshold should be and what you feel the reduction in the financial liability, based on the takings provision or based on the new strategy here in Congress would be, how would that reduce the financial impact by setting a threshold at something like half an acre or maybe even higher?

    Anyone who wants to can answer the question.

    Mr. SZABO. Mr. Wamp, that's a difficult question to answer for the following reasons. If you look at the bill that is before you, it tries to address that problem in a little bit different way. It says, ''Let's classify wetlands as high-, medium- and low-valued wetlands.''
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    High-valued wetlands are going to be pretty much off limits to most development activities.

    Middle-valued wetlands are going to be—regardless of how big they are—you may be able to do things in them but you are going to have to return the values that you have used, the functions and values to the environment through mitigation banking and compensatory mitigation.

    The lower-valued wetlands we're are not going to be regulated at the Federal level. If the local government or the State government wants to regulate it, that's fine.

    Removing regulatory coverage from the Federal level of half acre or smaller wetlands or one acre or smaller wetlands makes a lot of sense.

    The Congress got into this area of reputation, remember, by saying the nations needs a dredge and fill permitting system for navigable waters. In 1977, when the Corps was trying to figure out the definition of navigable waters, the Congress took a pass on the issue. So today you're not regulating nationally-significant wetlands, you're regulating all wetlands.

    So your question is hard to answer because nobody knows today how many wetlands there are in the Nation, the value of those wetlands or where they are located. The Nation's wetlands are not mapped.

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    So all the questions that were being asked of us previously by Members are hard for us to answer since we don't know where the Federal jurisdictional wetlands are located today. The Government doesn't map them. They don't post maps in public placse to inform people. There is not a sign on people's land that says it is a wetland. If there is some kind of determine that land is a wetland, it isn't placed in the property records in the Nation's courthouses.

    So to ask us as citizens to tell you how to answer these questions is difficult because we don't know the base case. I suspect the Corps and EPA don't know the base case, either. It is a little difficult for us to respond, so we can't.

    Mr. WAMP. Anyone else?

    Mr. ANDERSON. Can I make a couple of comments about that, too?

    I agree with everything Mr. Szabo said as far as relating to that particular answer.

    A question was asked a while ago and I never got a chance to answer it when the chairman asked about the takings part in taking out the financial burden of Government out of the whole question.

    I think if you set some limit, whatever acreage, whatever size it might be, if you get a better definition or have a definition that everybody can understand, have one agency that is in charge of regulating that you can go to and get an answer, rather than having to go through three or four and having each one have the ability to override the other, it is going to take a lot of that land in question out that may ever come up for the takings question.
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    But, since 75 percent of the land right now that is under jurisdiction is privately-owned, I think if it is of public value then the public should compensate the owner of that property for the loss in value that is there.

    He didn't give me a chance to answer that a while ago, but I wanted to add that.

    Mr. WAMP. What should that agency be, from your perspective?

    Mr. ANDERSON. Really it depends on what group you are talking to. From an agricultural standpoint, in my State from Louisiana we think it is Soil Conservation Service—the NRCS now I guess is the terminology to use for that group—because they have the expertise, the members out, the personnel out there, and the scientific data usually on an area to make that determination.

    Mr. WAMP. Anyone else?

    Mr. RUMA. Mr. Wamp, in terms of your question as it regards a size restraint in terms of reducing the burden of takings, I think we all have to understand that when we are talking, as it relates to H.R. 961, about a type A classification, I think size has to be very minimal, and in that case you are talking about an acre to something maybe even less than that. I would hope it would be nothing less than an acre.

    When you are talking about the middle wetlands, there is the area that you can really protect the takings issue. In my mind, that size ought to be 10 acres. If there is a 10-acre site of wetlands—and I don't care if it is on your property or not. If your property is 100 acres and you've got 2 acres of 30-acre wetland, then that wetland is what is most important. But if the total wetland is 10 acres or less, you'd solve the takings problem.
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    Mr. WAMP. Mr. Olszewski?

    Mr. OLSZEWSKI. I come from Florida. I spent 12 years in Florida, and the State regulatory authorities in Florida generally use a half-acre threshold for this issue, just for your information.

    It is not that big of an issue to the forest products industry because we operate and manage obviously wetland timber on very broad scales.

    I wanted to make one point briefly if I could, Mr. Chairman, about the takings issue, though.

    I sympathize with the chairman's concern about the administrative problems with implementing a takings provision, but I wouldn't give up. I would be concerned about it.

    As an example, our company, Georgia-Pacific, is fairly well known for what we have done with the red cockaded woodpecker. It is a good analogy, I think. It is an endangered species issue, but because we are a very large landowner with large landscapes to manage in many cases, it gives us some flexibility to manage our lands that a small landowner just doesn't have.

    If the small landowner had the same red cockaded woodpecker clan on his 100-acre tract, indeed he might be extremely constrained from a financial perspective about what he is going to do, how he is going to manage his property. The same agreements that we have come up with in terms of how we work with the Department of Interior on that issue would—the small landowner would take a pretty big financial hit in terms of doing the same thing.
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    We make decisions as society about functions and associated values, and I'm not so sure that it is fair to ask the small landowner in a case like that to take up the entire burden of protecting an individual species like that. It's a tough issue.

    Mr. WAMP. Among other minority members, Mr. Hayes still has some questions and we are awaiting his arrival. At the risk of making a mistake that a teacher may make in school, let's take a 5-minute recess and be prepared to convene in 5 minutes with this same panel for further questions.


    Mr. WAMP. The gentleman from Louisiana, Mr. Hayes?

    Mr. HAYES. I thank the Chair very much.

    I am first going to do a couple of housekeeping things. I feel I owe it to Mr. O.C. Mills to ask the Chair unanimous consent to place into the record the comments that were made by the district judge, Robert Vincent, when he overturned and reversed the conviction.

    Mr. Mills represented himself his first round. He hired an attorney after he served time.

    Of the Clean Water Act, that judge said it was ''a regulatory hydra worthy of Alice in Wonderland.'' His 21-page decision blisters Congress for abdicating its power.
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    It is interesting because a little later on Judge Smith in the Bowles decision gave Congress the same kind of admonition. He said, ''Courts cannot produce comprehensive solutions. They only interpret the rather precise language of the 5th Amendment to our Constitution in very specific, factual circumstances.

    ''To the extent that the Constitutional protections of the 5th Amendment are a bulwark of liberty, they should be understood to be a social mechanism of last, not first resort.''

    I might add to Judge Smith's eloquent opinion, it shouldn't cost a quarter of a million dollars to get justice under a Constitutional amendment in America. The economic consequences are as great.

    I ask unanimous consent to put both the Bowles decision and the disposition of Mr. Mills in the record.

    Mr. WAMP. Without objection.

    [The referenced documents follow:]


    Mr. HAYES. Then I want to clarify something that is really not too hard.
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    First of all, there are two things at issue here. Some folks, either accidentally or intentionally, keep confusing them. The definitional standard is only partially at stake here. The definitional standard of what is or is not a wetland is important, but it is not the end of the process, otherwise there would be no permits.

    In other words, if having a wetland meant there would be no activity whatsoever because all wetlands are equal and all are of the highest ecological value there would be no Corps of Engineers, there would be no EPA, there would never be any permit issued. So that takes us to part two.

    We do a definition that makes sense. We use it to get some doors open and close some doors and cut some red tape and require others. But then we do the necessary part, too, which is being done now: value and function. It is done now when you submit a permit. It is weighed by Federal agencies. They determine the value and function ecologically of that property. They decide whether you can permit the activity or not. But that's a one-by-one determination of value and function.

    The way I understand the testimony of this panel and the previous panel is you believe that ought to be in the law, and I couldn't agree with you more. I'll tell you why.

    In the previous Clean Water Act there is one passing reference to wetlands. All of the items we have discussed today are done by agencies, not by legislative directive. It is, indeed, an obligation of the Congress to act upon what has been left only to regulatory agencies rather than a policy statement of societal impact. Then the latitude should remain with whoever makes the ultimate decision, but the parameters of that latitude should be interpreted from, not created by, legislative initiatives through regulation.
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    The second point I want to make is to ask a question of my friend Bob Szabo. We have been hearing a whole lot about the benefits to society when property is put in some form where its use is denied and therefore society benefits.

    My question would be, what seems fairer to you: for a gentleman who previously testified, like Tony Palermo, to pay $2.9 million on a site north of an interstate, or for society, which benefits from the activity, to collectively be able to compensate that landowner? Which is fair and which isn't? If society is benefiting from the act, if there is good science behind it, if it is benefiting all the people of that parish, that State, and the Nation, then why should one landowner foot the bill for the benefit to society?

    Mr. SZABO. Of course it is not fair for the individual to pay that burden. It is a societal burden. And the folks that are most eager to have people pay that burden are the folks that live in cities, not the folks that live in the country. And I might add that the folks that live in cities normally live in cities that were hewn out of wetlands.

    If you go to New Orleans, the whole thing was a wetland before there was a law protecting wetlands. If you go to Boston, 1,200 acres of downtown Boston was a wetland in Colonial times. If you come here in this city, everything south of Capitol Hill heading for the river was a wetland at one time.

    So the notion today that is most popular among city people is that folks that don't have land developed should go ahead and make a contribution to by not developing their land. Clearly, this is not fair. Obviously, you dealt with that last week on the floor of the House because you felt it was not fair, to burden private landowners to benefit all of us.
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    Mr. HAYES. And I would make two additional observations.

    The first is that while I talked about property tax may or may not be impacted by a citizen reacting to a permit process, it is also an arduous process and it is resulting in current lost revenues. But if we are asking who is going to pay the cost of the kind of roadways and the kind of improvements that were made, I'll answer part of that question, too.

    First of all, anyone who has property enhanced on any transaction subsequent thereto is going to pay tax at one, if not two, levels. They are going to pay their share of enhanced value.

    Second, I would say if Tony Palermo died tomorrow he is going to have both a Federal estate tax and a Louisiana inheritance tax based upon that increased value. His family and he are going to pay their fair share of any increase that went by because of a roadway.

    But I'll reverse it and simply say: who all got the benefit of the roadway, as well? Just Mr. Palermo, or the 49,000 cars that went by there every day? So isn't it fair to share with him, through his tax burden, not a 100 percent tax but, in effect, a large proportion he pays and a large benefit to the public.

    These are the kind of weighings that just make a great deal of sense to me and where, on other occasions, we have seen the good judgment.

    I've got to go down to do an interview so I'm going to close with this, and ultimately it has got to be the answer to the questions that were asked by some of the panelists this morning. The 5th Amendment was not carelessly drafted. It was not a statement done in 100 days of frenzied political activity, but it is a statement that is adhered to by my republican colleague and myself as if we had had the opportunity to work on it together with Mr. Madison.
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    It doesn't talk about givings. It recognizes takings by Government because it essentially recognizes that people are above the role of Government and that the impact upon them is an impact on the direct source of all Governmental power.

    Only when you think that Government is above people do you have a philosophy where you think a benefit should be essentially taxed or billed to an individual.

    I suggest to you that philosophical difference is why, after hundreds of hours of hearings, some folks will never understand the problem with the current system and some folks will see it so clearly. But, as this hearing started out, I'll tell you one thing that changed. For the comment that was made early on about whether or not the other troops will arrive, I can assure you they have arrived. On the vote of 277 votes last week, they are outspoken, and on their concern about individual citizens and their rights, they are adamant in seeing that we do our obligation in carrying out Mr. Madison's contract, which Mr. Franklin referred to for generations yet unborn.

    I thank the chairman for the time. I'm going to run out, but not because of disinterest. I thank all of you for appearing today.

    Mr. WAMP. Thank you, Mr. Hayes.

    Despite the temptation to——

    Mr. HAYES. Also, this would be a real fine time to mark up the bill, Mr. Chairman. We've got a whole bunch of folks.
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    Mr. WAMP. I was going to say, Mr. Hayes, despite the temptation of the Chair to adjourn the meeting right here and there at the close of Mr. Hayes' eloquence, the Chair recognizes Mr. Poshard of Illinois for questions.

    Mr. POSHARD. Thank you, Mr. Chairman.

    I just got back to the committee, so I'll be brief. I know we need to move on.

    Just real quickly, which of the Federal agencies that currently have something to do with wetlands—the Corps, EPA, Fish and Wildlife, or whatever—which of those agencies should be the final arbiter or determiner here with respect to this policy, under which agency would you prefer it to be?

    Mr. SZABO. Well, if we were kings we would say we would like the NRSC to decide what was a wetland and the Corps to decide whether we get permits in the wetlands. But since we believe you need to have it in one agency, we would select the Corps. We would also stand by agriculture's position that the NRSC should delineate wetlands or agricultural land.

    Mr. ANDERSON. From the agricultural standpoint, it would have to be, in my view, Soil Conservation or NRSC.

    Mr. POSHARD. And the rest of you gentlemen?
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    Mr. RUMA. From the National Association of Homebuilders, we would prefer the Corps.

    Mr. PLOOF. Same thing here. I think the Corps, as long as they've got the standard definition to work by so we don't hear stories like we have today about the Buffalo district and this district. They've got to have something standard.

    Mr. OLSZEWSKI. We would really like to have the NRSC delineate forestry issues. Lots of times a landowner has mixed forest and farmland very commonly, and it is going to create some confusion there for different folks to be involved with that issue. We've supported that for a long time now.

    Mr. POSHARD. What about exemptions? Wherein the policy or practices of one Government agency has created a manmade wetland, should those be exempt from further policy considerations? And tell me why you think that.

    Mr. SZABO. The word ''wetlands'' is not really defined. You're talking about waters of the United States. So you may not want to exempt Sabine Lake on the boundary of Louisiana and Texas, even though it is manmade. But if it is a wetland that is created incidental to a construction activity or because you had to undertake another activity and is an incidental wetland, we think it should be exempt from coverage by the 404 program.

    So there are some size considerations, we would think, in what should be exempted.
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    Mr. POSHARD. Okay.

    Mr. ANDERSON. If it is a stock pond or a watering area where it happens to be wet, where cattle concentrate, sure it should be exempt.

    Mr. POSHARD. Other comments?

    Mr. RUMA. If a government puts in a roadway and doesn't put in proper storm sewers, you are going to block that land and you are going to create a ''wetland.'' This has occurred many times over. I can visualize one right now. That's not fair. It is not a wetland. If it was created by that roadway, it shouldn't have occurred if it is a ditch or ditching that is carrying water. If it is a low are in a farm where it has been tiled for years, and that tile has been crushed or been clogged and is no longer draining properly, no, it shouldn't be a wetland.

    Mr. POSHARD. Do you all concur with that?

    Mr. PLOOF. We agree that anything that is manmade, whether it is intentional or accidental as part of the construction, should not be delineated as a wetland.

    Just a personal example. We built a house, and right after we built the house we dug a big pond in the front. Under many of the regulations we look at, both in our State and otherwise, if we had dug the pond first we couldn't have built the house.

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    Mr. OLSZEWSKI. We might actually create a wetland in some cases to treat waste from a facility and use its nutrient cycling capabilities. It seems kind of bizarre that you would almost get penalized for doing that and move into a regulatory format for all the wetland functions in that case. It seems kind of strange.

    Mr. POSHARD. Okay. Mr. Chairman, in the interest of time I have no more questions right now.

    Mr. WAMP. Thank you.

    As a realtor, developer, protector of free enterprise, I personally thank the panel for their participation today.

    Mr. Barcia.

    Mr. BARCIA. Mr. Chairman, I apologize for my tardiness.

    I do have a statement I'd like to share with the panel, if I could.

    Mr. WAMP. Very good.

    Mr. BARCIA. I would just like to say I appreciate your testimony before the subcommittee today. As a member of the State Legislature for 16 years from the State of Michigan, which is the only State that regulates its wetlands, I appreciated very much the comments and the observations that you have made in terms of some of the difficulties from the Government's standpoint of implementing legislation to regulate our wetlands across the country, and especially based on my experience in Michigan.
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    To a great extent, I think some of what I heard today points out the need that we have to develop some type of definition of what constitutes a wetland. I know in Michigan for many years, as a member of the Joint Administrative Rules Committee, we never prescribed criteria that would define a wetland. So in my district, the 5th Congressional District in Michigan, for example, 70 percent of the State of Michigan's coastal wetlands are contained within my legislative district. A very similar percentage was contained in my State Senate district which I represented for 10 years.

    To a great extent, the regulatory staff from the State government depended totally on the whim or the mood of the person that day. The State of Michigan, for example, would select a site for a State prison. There would be no water, no moisture whatsoever on the property at all, but the particular bureaucrat that went out and kind of scanned it with his eye would say, ''Well, I think it is a wetland and it is up to you to prove that it isn't.''

    But I would like to share a statement and say that I empathize with the sentiments which have been expressed, and I think that we in the Federal Government owe it to people across the country that, if we want to regulate environmentally-sensitive areas and preserve them for future generations and for our natural resources, we must do so in a professional and a uniform manner. I think that has been lacking.

    But I'd like to make a brief statement and share that with you before the panel breaks, and I appreciate the indulgence of the Chair.

    As you know—and now everyone else here knows—myself and my Michigan colleagues on this committee, the Committee on Transportation and Infrastructure, are in an almost unique situation in that our State runs its own permitting program, therefore I hope that you will understand that my criticism of section 404 permitting lies with my deep frustration with the system.
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    Because of Michigan's authority over its process, one would think that there would be more localized control and perhaps a process more sensitive to the needs of our people in Michigan, but it is not.

    My constituents, both as a U.S. Representative and in my prior incarnation as a State representative and State senator for many years, have constantly expressed their dissatisfaction with the process. It has fluctuated between being perceived in the best cases as arbitrary, and in the very worst cases as downright mean.

    What I am struggling for and what I believe many of my colleagues and the stake-holders in this process are struggling for is not the elimination totally of wetlands protection in this country, and anyone who cares to think so recognizes, I think, the value of our wetlands.

    But I am struggling to help implement a process which explains why a citizen cannot use their property, what it is about their property which makes it so valuable to society and offers just compensation for their contribution to the public good when it is absolutely required, because decreasing the value of someone's investment is a forced contribution, whether it serves the public good or not.

    Our leaders cannot continue to expect our citizens to be satisfied with the Government telling people, ''because we said so'' in response to their questions about what we do and why we do it.

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    We owe our citizens, at the very, very least, an explanation of our actions.

    In the way of a final comment, I'd just say that recently my office has been struggling with the U.S. Army Corps of Engineers, as well as our Michigan Department of Natural Resources, to preserve a public swimming area at the Bay City State Park located in my home county. That State park has been part of the State park system in Michigan for over 70 years. It is the largest campground in the State system, consisting of some 90, I believe, State parks. Every year we have more than a half million visitors to the Bay City State Park.

    But because the DNR neglected to maintain the beach front for a couple of summer seasons, some cattails emerged, and now the Corps and the DNR are attempting to close the beach some several miles in length to all public use, to any form of public swimming or recreational use. Of course, we are struggling now to maintain just 500 feet of what used to be 2.5 or 3 miles of open, beautiful, clean area for families to go out and enjoy the State park and to swim.

    The case that we have been making is the historic use of this beach front has, in fact, been one for the public use, and we think that's a good use of that waterfront property.

    Mr. Chairman, I know I have exceeded my time limit, so thank you very much for your patience.

    Mr. WAMP. Thank you, Mr. Barcia.
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    The subcommittee would like to thank these five individuals but, more importantly, thank your membership for their contribution to our society. These are five large organizations across our country and represent some of the very best. I know that first-hand.

    We want to thank this panel and ask panels three and four to convene as we dismiss this panel.

    Panel three and four will consist of a combination of State organizations, representatives, and mitigation bank and technical representatives. The Association of State Wetland Managers is represented by Paul Scott Hausmann, the chief of water regulation, Department of Natural Resources, from Madison, Wisconsin. The National Association of State Foresters is represented by James Garner, the State forester of Virginia in Charlottesville. Florida Wetlandsbank is represented by Lewis Lautin, the president and partner in Pembroke Pines, Florida. And the American Consulting Engineers Council is represented by Ian Frost, the assistant division manager of Rust Environment and Infrastructure from Glen Allen, Virginia.

    We do have these in order, so our first witness on this combination panel is Mr. Hausmann.

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    Mr. HAUSMANN. Good afternoon. I am Scott Hausmann. I am chief of the Association of State Wetland Managers, and I'm chief of water regulation for the Wisconsin Department of Natural Resources.

    We appreciate the opportunity to testify on wetlands and the Clean Water Act reauthorization. The Association is a professional scientific organization which represents State wetland managers in 40 States.

    The experience of the States in managing wetlands across the Nation over the last three decades shows that there is a significant need to: one, reform the 404 program; two, integrate local, State, and Federal programs; and, three, to facilitate and empower State capabilities.

    We hope very much that the committee and Congress will adapt legislation consistent with the State and local needs and the specific recommendations of the Nation's governors.

    We strongly support the National Governors Association wetland policy, which we helped develop, and we recommend to you a bill our Association put together to implement the governors' recommendations.

    The National Governors Association policy and our bill clearly address our concerns and suggest workable approaches. We strongly urge you not to ignore the lessons learned by the governors throughout the country. We believe that many of the wetland provisions in the current Clean Water Act bill, H.R. 961, are unworkable and would reduce the role of local and State governments.
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    Specifically, the delineation criteria are scientifically unsound, would reduce Federal jurisdiction 60 to 80 percent, and are inconsistent with State criteria and regulations. The classification scheme, as drafted, would cost billions of dollars and would lead to non-ending technical and legal bickering.

    The compensation provisions contained in H.R. 961 title 8 are unfundable. They would cost tens of billions of dollars, as well as result in tens of thousands of tiny parcels in Federal ownership.

    However, because wetlands programs impact private property, we believe that legislation should address landowner concerns and landowners should be provided with more certainty and predictability. We strongly urge you to consider our draft bill language on technical assistance in delineation, technical assistance in permitting, clarification of exemptions, administrative appeal procedures, codification of regulations, training and education, mitigation banks, regional restoration strategies, and State and local advanced planning.

    We do not support blanket compensation for a type of wetland or based upon a formula. We believe that there are protections in the Federal and State constitutions for private property rights.

    H.R. 961 or like legislation will discourage State and local programs. The combination of new, artificial delineation criteria, expansive classification and compensation provisions would make the Federal program unacceptable to most States. It is virtually certain that the two States that have assumed the section 404 permitting program and 13 States with State programmatic general permits would give back the program if H.R. 961 or the like are adopted.
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    We support the need to build State capability and increase flexibility for State involvement. Wetland legislation needs to: clarify State programmatic general powers; support local wetland and watershed programs; fund both State program development and implementation; support State wetland conservation planning; and provide Federal, State, and local coordination mechanisms.

    We commend the efforts of the Corps and EPA in providing guidance on many of these matters, and EPA's State wetland development grant program; however, legislation is needed.

    Again, we urge you to consider the provisions in our draft bill.

    In closing, we appeal to you to adopt wetland regulations that improve the 404 program and that are practical, scientific, and sensitive to and supportive of State and local needs.

    Thank you.

    Mr. WAMP. Mr. Garner.

    Mr. GARNER. Thank you, Mr. Chairman. My name is Jim Garner. I'm the State forester in Virginia, and I'm representing the National Association of State Foresters.

    We appreciate being able to share our views and concerns on the wetlands portion of the Clean Water Act reauthorization.
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    Regarding wetlands protection, we have nine specific concerns and recommendations for your consideration. These are clearly spelled out in our written testimony, and we offer that document for your consideration.

    NASF represents the directors of the State forestry agencies of the 50 States, 4 territories, and the District of Columbia. We feel like we are the front lines in protecting the forests and working directly with the small, nonindustrial private landowner. We are the people that look our customer in the eye, walk in the woods with those customers, and hold their hand while they get their on-the-ground accomplishments done as they protect and nurture their woodlands.

    These millions of individuals collectively own almost 60 percent of the forestland of this country and provide 50 percent of the Nation's wood supply. They accomplish their goals with great sensitivity and concern for wildlife habitat, soil protection, and enhancement of water quality that flows through their woodlands. These private landowners also provide open space, carbon storage, and recreational opportunities for the benefit of all of us.

    These owners make large investments, pay annual taxes for many years, and bear the risk of fire and natural disasters throughout the long life of the forest.

    These owners provide these benefits, but they also expect to derive an economic return free of burdensome regulations, permits, and Government controls. These owners are true stewards of our natural resources and are as environmentally concerned as many of the groups that you have already heard from in this committee.
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    There are many State and local programs today that are accomplishing most of what this legislation is proposing. These programs are based on local conditions, local needs, and a cooperative spirit of all of the interested parties. They are successful because they provide education to and incentives for these landowners who care.

    So as you consider this important legislation we would encourage you to focus on results and not the process. Clearly identify the water quality goals that must be achieved, then challenge the States and the localities to reach these goals. Utilize the expertise of these practitioners and these private landowners who best know the conditions that must be met if we are to achieve these goals.

    We would encourage you to continue to recognize that healthy, viable forests are the best wetlands protection going, and that these forests are living, dynamic systems. When they are properly nurtured these forests can provide many things for both the people and the wildlife.

    I would say to allow the local experts the flexibility to provide the best diversity of species and ages so that we can still meet the goal.

    Create incentives for these landowners and enhance existing programs to encourage the improvement of our wetlands while still protecting private property rights of these dedicated stewards of our forested wetlands.

    Provide the States and the localities with the resources for training and for landowner assistance. Encourage local cooperative efforts among private, State, and Federal organizations, especially the Corps of Engineers. Oversight by the Corps is critical, but with local partnerships, cost and effectiveness can be greatly improved. We need to continue our silvicultural exemption under section 404 for the private landowner.
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    Finally, we encourage you to please, please review all of the regulations, all of the legislation, and all of the conservation programs that are dealing with water quality. This is an opportunity to bring together a multitude of programs and regulations into a unified effort to reach a goal of abundant clean water and viable wetlands. It is an opportunity to offer these private landowners a chance to provide good stewardship for all of their programs.

    I have been working with these landowners for 37 years, Mr. Chairman, and I am confident that if we give them the encouragement and the incentives, free of regulation and control, these landowners will make a positive response.

    Thank you, sir.

    Mr. WAMP. Thank you, Mr. Garner.

    Mr. Lautin.

    Mr. LAUTIN. Mr. Chairman and members of the subcommittee, I'd like to thank you for this opportunity today.

    My name is Lew Lautin, and I am chief executive officer of Florida Wetlandsbank, an entrepreneurial wetland mitigation bank.

    H.R. 961 has great potential, and we commend you for its excellent start. Due to our unique position as one of only a few entrepreneurial mitigation banks in the country, we are pleased to comment on the proposed legislation.
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    A pioneer in entrepreneurial wetland mitigation banking, Florida Wetlandsbank started its efforts to correct the past failures of postage-stamp and Band-aid mitigation in 1991. In 1992, we entered into a public/private partnership with the city of Pembroke Pines, Broward County, Florida. This agreement was the first step in a long process towards getting regulatory approval for our mitigation bank.

    The bank sits on 345 acres and was a severely degraded wetland. The site was nonfunctioning, covered with melaleuca trees, a highly-evasive, nonnative species that drains wetlands and destroys ecological value.

    Florida Wetlandsbank is transforming this site into a fully-functioning wetlands. We designed and constructed an ecosystem with a mix of habitat typical of the Everglades—cypress stands, sawgrass prairies, tree islands, and more. The site will function as nature has intended, hosting birds, fish, and other wildlife, filtering pollution from storm water, and storing floodwater. This will be accomplished at absolutely no cost to the public. We are using our own creative, private, entrepreneurial efforts and risking our own capital.

    Now let me describe the permitting process we have endured.

    Our bank concept was embraced by EPA and the Corps. In June 1993, we received a second 404 permit for private entrepreneurial mitigation banking in the country. And in January 1994, signed the first irrevocable mitigation transfer in the Nation under this program.

    In 1994, in June, we received the first Broward County license, and on February 9, 1995, we received the first State of Florida mitigation banking permit.
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    Thus, it took us one and one half years after receiving the Corps permit to complete the permitting process. It has taken almost $1 million of our own capital to obtain these permits. We now have to answer to three regulatory agencies. We now have three different permits for the same mitigation bank site. We now have three different methods of calculating transfer ratios, and we now have three different bonding requirements.

    In spite of this, however, our development remains on track towards success. We have transferred mitigation responsibilities from developers to Florida Wetlandsbank on over 20 percent of the site. We are currently restoring over 90 acres. In the last 2 weeks, we have cleared 51 acres of melaleuca trees, which threaten our water supply.

    Now I'd like to relate our experience to the current mitigation banking legislation under discussion. I'll address two key elements which must be addressed for mitigation banking to succeed—pre-selling credits and streamlining permitting.

    The entrepreneurial mitigation banker must have the ability to pre-sell a reasonable amount of credits, provided that the banker guarantees its construction with financial security. We believe that if some advance sales of credits are not allowed, entrepreneurial mitigation banking is dead. No responsible individual, corporation, or public entity would be willing to put its time and capital at risk going through the costly permitting process, designing and constructing a mitigation site, waiting for its success, only then to begin selling credits.

    As a former home builder and developer, I find this concept as ludicrous as purchasing a 100-unit site, building all 100 units, and only then attempting to sell them.
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    Had Florida Wetlandsbank not had the option of pre-selling credits, our bank would not be the pioneer and would not be in operation today. As entrepreneurial mitigation bankers, we are willing to take risks, invest the long lead time, the extensive capital in something we strongly believe in, benefitting both the development community and the environment.

    But as businessmen, however, we must be confident that these risks are reasonable. Even though our mitigation construction is fully bonded, we are still being restrained from selling credits by regulatory overkill. In streamlining in June 1993, we received our first Corps permit. There were no existing State or county regulations. We subsequently lost almost 2 years and hundreds of thousands of dollars going through separate permitting procedures with county and State agencies.

    Any new legislation must solve this problem by streamlining permitting so that a single set of regulations apply to each site.

    Once again, we believe that H.R. 961 has merit, and we would like to offer our unqualified and unique assistance to this subcommittee in continuing work on this important legislation.

    Florida Wetlandsbank invites all of you to visit our site to see first-hand the best America has to offer in the field of entrepreneurial mitigation banking.

    Thank you.

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    Mr. WAMP. Thank you, Mr. Lautin. That's dangerous to invite us to come to south Florida to see your site, but I'm all by myself here. I would say yes for the entire subcommittee.

    Mr. LAUTIN. May we have a motion to that effect, sir?

    Mr. WAMP. Mr. Frost.

    Mr. FROST. Mr. Chairman and members of the subcommittee, my name is Ian Frost. I am the assistant division manager of Rust Environment and Infrastructure's office in Glen Allen, Virginia.

    I am an environmental scientist, and I am here today representing the American Consulting Engineers Council, ACEC.

    I wish to thank you for the opportunity to present ACEC's views on the timely revision of section 404 and the reauthorization of the Federal Water Pollution Control Act.

    ACEC is the Nation's largest organization of independent consulting engineering firms. ACEC has nearly 5,500 member firms that provide jobs for over 190,000 employees. Many of the projects we work on are water and wastewater related and are located in all regions of America, from large metropolitan areas to small rural communities. Our members also delineate, mitigate, construct, and monitor many of America's wetlands.

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    ACEC supports a new approach to establish a comprehensive program for protecting and managing wetlands in the United States. An increasing body of scientific evidence assembled over the past two decades documents the ecological feasibility of mitigation through establishment of new wetlands and the enhancement of the functions and values of existing low-value wetlands.

    The encouragement of innovative approaches to mitigation is the key to ensuring the balance between environmental protection and economic development.

    I would like to speak about three specific ways that created and restored wetlands can be used to help achieve the goals of the Clean Water Act and describe ways that the Federal Government can encourage and support wetlands creation, restoration, and enhancement.

    The three ways are: wetlands compensation, wetlands creation for wastewater treatment, and storm water treatment using wetlands.

    First let me speak to the issue of wetland compensation. For more than a decade wetlands have been created, restored, and enhanced as compensation for the filling of wetlands. The U.S. Army Corps of Engineers' 404 program and State wetlands regulations have the principal regulatory programs that have driven this practice.

    Wetlands creation and restoration is a relatively new science. As a result, some past projects have failed to provide viable and functional wetlands. However, there are many completed projects that demonstrate that wetland creation can be successful.

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    ACEC recommends the following actions to encourage wetlands compensation in the revised Clean Water Act.

    First, additional funding should be included for research on wetlands creation. This will enable new techniques to be developed and will allow us to better understand what are the best methods for ensuring successful creation and restoration.

    The list of research needs is long and intimidating; however, cost-effective opportunities are available to conduct such research in conjunction with academic research, demonstration projects, mining reclamation, superfund cleanup, and post-natural disaster restoration.

    Second, incentive programs should be developed and enhanced, allowing private/public partnerships and private initiatives for wetland mitigation banks and which encourage the rehabilitation, restoration, and creation of wetlands.

    We advocate regional or watershed approaches to mitigation compensation. It is ACEC's opinion that all mitigation practices must be consistent with the sequential process of avoidance and minimization.

    A systematic approach using regional mitigation banking rather than project-specific approach offers opportunities to create wetlands in watersheds that have suffered historic wetlands loss and to create larger wetlands that offer greater ecological diversity.

    Eight States have adopted specific laws that allow wetland mitigation banks to be constructed. This practice allows mitigation objectives to be set, provides maximum flexibility, and offers watershed solutions.
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    When the banks are consistent with regional or watershed objectives, they are typically constructed by private companies or transportation departments in advance of project impacts. Debits to the bank are then sold to developers or public agencies when compensation is needed for a particular project.

    Some States, including Oregon and Maryland, have established mitigation funds which can be used for restoring or creating wetlands, as well as for scientific monitoring and acquisition of unique and sensitive wetland areas.

    In addition, better standards and guidelines for wetland creation and restoration must be developed in order to improve the success of such projects. These standards should include all steps in the process, including siting, design, construction, and monitoring after completion.

    We also recognize that cookbook approaches that prescribe rigid criteria are not the answer, because each site and each project has specific characteristics and objectives.

    Some progress has been made in this area already, and there are a number of articles and books which provide guidelines for wetland creation. ACEC members can help to refine the standards and guidelines and help to ensure that they are practiced consistently by the engineering community.

    The second subject I wish to address is wetland creation for wastewater treatment.
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    One of the beneficial functions of wetlands is that they serve as natural filters which remove pollutants from water. There are numerous examples where constructed wetlands have been used to provide an equivalent level of treatment at a lower cost than conventional wastewater treatment plants. In fact, there are over 300 projects already in North America that use wetlands for wastewater treatment.

    One of the first such projects is the 96-acre marsh that was created by the town of Arcata, California, to handle wastewater treatment for its 15,000 residents. The system provides secondary treatment in combination with conventional primary treatment.

    The city of Orlando, Florida, uses a 1,280-acre created wetlands for final polishing of wastewater that is discharged from the Iron Bridge Treatment Plant. The wetlands serves as a wilderness park which supports a great diversity of plant and animal life.

    These projects are examples of the most common approach to wastewater treatment using wetlands, where a wetland is used for secondary or tertiary treatment in combination with conventional treatment.

    We are now seeing new applications which use natural treatment within a greenhouse for a more stable and resilient treatment system. One such example is the new town of Haymount in Caroline County, Virginia. This project uses a combination of solar tanks, solar ponds, and constructed wetlands that are enclosed in a greenhouse for primary, secondary, and tertiary treatment of wastewater. In addition, outside reedbeds will be used for treatment of sludge.
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    The advantages of this system include its ability to function in a temperate climate, its isolation from the weather, its completeness as a treatment system, and the ease with which it will be able to accommodate future expansion.

    ACEC endorses such innovative approaches and recommends the following:

    Funding should be increased for research and demonstration projects that incorporate created wetlands into the process of wastewater treatment. This is particular important for small communities which can afford neither the capital costs of conventional systems nor the plant modifications necessary to comply with tighter discharge requirements.

    Regulations should recognize the difference between wetlands created for wastewater treatment and natural wetlands and those that are created for compensation.

    The regulations should exempt such wastewater systems from the 404 dredge and fill program so that the necessary maintenance work and modifications to these systems is not burdened by unnecessary regulation.

    Regulatory clarification is needed on the requirements for disposal of plants that need to be harvested from such systems. Because of biological accumulation, the plants can, in some cases, accumulate toxins in concentrations that could potentially make them a hazardous waste.

    The third subject of my talk is storm water treatment using wetlands.
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    Mr. BOEHLERT [RESUMING CHAIR]. Mr. Frost, would you kindly summarize, if you could, because we are getting over the time and we have two more panels to go.

    Mr. FROST. Yes, sir.

    I think storm water management is a requirement of development these days, and I think there are opportunities to use wetlands to help with storm water management requirements.

    I'd just like to thank the committee and the members for having this opportunity to speak in front of you, and ACEC offers our help in assisting you with the process.

    Mr. BOEHLERT. Thank you. I'm sorry to ask you to bring it to a close. We got up to 9 minutes.

    But let me apologize to all of you and to all of the witnesses. What we are about in the Congress these days is somewhat frightening, because we are trying to catch a 150-mile-an-hour train, and we are dealing with one of the most important subjects facing the Nation here today, and we have you willing to share with us your points of view, and we have few Members here.

    I personally have just come from a meeting with the Speaker. I don't mean to name drop, but the fact of the matter is I was at a very important meeting with the Speaker. Now we've got bells coming up. We've got Members stretched out, stretched so thin, whether they are liberals or conservatives or republicans or democrats, a typical Member now is putting in about 90-hour weeks. I apologize for not having greater active participation right here to hear what you have to say.
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    So the apology results in letting me throw you a softball. Mr. Lautin, you can go first. How well do you think manmade wetlands function in terms of ecological benefits?

    Mr. LAUTIN. Mr. Chairman, we provided you with some backup information, and in the middle of it we have a picture of a marsh in Tampa. This was built around 5 to 7 years ago. This is developed into as pristine of a wetland as you will ever see.

    We can take you to sites in my area in Florida, both freshwater wetlands that have been created, enhanced, restored. We could take you to saline sites. We could take you to sites that probably have been completed 10 to 12 years ago, and you will see wetlands functioning at its full functional value doing exactly what wetlands should be doing.

    Mr. BOEHLERT. How about if I brought some of my environmental friends with me? Do you think we could convince them, too?

    Mr. LAUTIN. Sir, I would invite you to reconvene this committee tomorrow down at Southwest Broward County, and I'd be happy to show you what we and other people have done.

    Mr. BOEHLERT. South Broward County in southern Florida?

    Mr. LAUTIN. Yes.

    Mr. BOEHLERT. I accept your offer. We'll be on the next plane.
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    Mr. LAUTIN. Sir, there is no doubt in my mind that even the most strident environmentalist would be able to come to many sites that we could show them and recognize the value of what we have done. Only those who want to use this as a method of stopping all growth would acknowledge that what we are doing is a wonderful thing, not only for the development community but for the environment, and will leave a legacy for our children.

    Mr. BOEHLERT. I like the idea of mitigation banking. I'm just wondering how we can respond to the purists who say, ''It's not for real. It sounds good. The intentions are great. It looks good on paper, but in practice it really doesn't work like a natural wetland would.''

    Mr. LAUTIN. There is now a history, and I would stand on my 30 years as a builder/developer, and now an environmentalist and mitigation banker, that we could take any environmentalist to any one of a number of sites and show them and convince them that this is for real.

    We are backed in Florida by the Florida Audubon Society. We are backed in Florida by the Nature Conservancy and almost every other environmental group that looks towards reason and balance.

    Mr. FROST. Mr. Chairman?

    Mr. BOEHLERT. Yes, Mr. Frost.

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    Mr. FROST. I'd like to add to that, if I could.

    I believe that the environmental community will agree that it is successful in many cases. I think they will point to a number of cases where it has not been successful, and I think you can find there that it has not been successful because of poor design, poor siting, poor monitoring, or poor construction. So I think with careful attention we can succeed in accomplishing created wetlands that complete all the requirements of a natural wetland.

    Mr. LAUTIN. And, Mr. Chairman, banking resolves the problem of poor design because we have one 345-acre bank. The regulatory agencies don't have to inspect and look at 500 small locations. They have one bank to monitor. They have one bank to look at. It is cost-effective.

    The aggregation of small 2- and 5-acre parcels that don't get properly monitored, that don't get properly built, the answer is aggregating them in large banks that can be properly monitored. It is cost-effective, and we know it works.

    Mr. BOEHLERT. What about the geography? How far afield can we go from the original site that we are mitigating?

    Mr. LAUTIN. Our service areas, Mr. Chairman, include all of Broward County. I'm not sure how many acres are in Broward County. I think it is very site specific. It has to make ecological sense to allow mitigation from one area, the impacts to be utilized in a mitigation bank. It is site specific.
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    Three agencies after 4 years of studying our plan—the Corps, EPA, the county, and the State—have recognized that we have the ability to service impacts in all of Broward County.

    That may be very different with a State like Louisiana, a State like North Dakota. So I would say that there is scientific background that you could probably get that would tell you the limits of just saying a simple watershed solution doesn't make sense. I think each bank needs to be examined on a site-specific, scientific basis and you'll come up with what is best for the ecology.

    Mr. BOEHLERT. Does anyone else care to comment on that?

    Mr. FROST. Mr. Chairman?

    Mr. BOEHLERT. Yes?

    Mr. FROST. If I may, I agree with that. I think the solution is to look at watershed planning, regional planning, taking into account the State's needs, and then you can develop a regional approach to these things that will make them far more useful.

    You can target areas where there has been a loss of wetlands. You can target areas where there is a need to protect endangered species. That just makes it a worthwhile system to create.

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    Mr. BOEHLERT. Should we retain a preference for on-site mitigation?

    Mr. LAUTIN. No, sir. You should retain a preference for on-site mitigation only when it is ecologically superior to going to a mitigation bank. Nobody can convince me that 10 acres of mitigation in the middle of a 200-unit subdivision on a littoral shelf is better than moving it 5 miles to my 345-acre state-of-the-art, designed, built, constructed, monitored mitigation bank. I think the test has to be: is it ecologically better? In most cases on-site mitigation is not ecologically better. In some cases yes, most not.

    Mr. HAUSMANN. I would agree with that, and I think that's the finding of our members from 40 States that do it.

    I do think that there needs to be a preference to locate the mitigation bank or the mitigation project within the watershed or within the ecological region that the original project was impacting.

    Mr. BOEHLERT. Just a preference?

    Mr. HAUSMANN. I think you have to build that in as a preference, but as with any ecological system, any ecological thing, you have to have the flexibility to look at this in a larger context, as he was saying.

    But I think that you want to have—it makes no sense to mitigate something in Wisconsin with a project in Illinois.
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    Mr. BOEHLERT. Right. Well, my red light is on. Guess what? There isn't anyone else here.

    I want to thank all of you.


    Mr. HAUSMANN. I would just like to make one comment based on other testimony this morning. It has to do with the definition of wetlands.

    Mr. BOEHLERT. Yes?

    Mr. HAUSMANN. I have to say that I and the members of my association and the National Governors feel very, very strongly that we should not redefine wetlands. Let's adopt the 404–B–1 guidelines—that is the definition that all of our programs, both Federal and most State programs have been using since 1977—and then we must reflect the forthcoming National Academy of Science study into that and the delineation criteria.

    What I'm trying to get at is that the definition needs to be scientific. It needs to be something that is certain, and we have something out there right now that is certain.

    Our argument is: how do we regulate a wetland? It is not what a wetland is, it is how do we regulate it or what do we wish to regulate it on—on a Federal basis or a State basis or a local basis?
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    I'm fearful that if we change the definition of wetlands in this Nation you will suddenly see a Federal definition and 50 definitions of wetlands out there, and you will see mass confusion. And, as you said, if you are still here on this committee in 4 years you are going to see more screaming than you have ever seen about the program now.

    Mr. BOEHLERT. It is hard to imagine more.

    Mr. HAUSMANN. I believe it would happen.

    Mr. BOEHLERT. With that you have the final word.

    I want to thank all of the panelists.

    What I'm going to do now is introduce the next panelists, and then I've got 4 minutes to get over there and vote. Mr. Wamp is dashing. He's a pretty fast runner. As soon as he comes back he will resume.

    We'll go now to panel five, consisting of: Linda Gordon from the East Goshen Township, supervisor in Malvern, Pennsylvania; Donald Lirette from Dulac, Louisiana; Morgan Smith, who is a landowner from Wetumpka, Alabama; and Jan Goldman-Carter, wetlands counsel for the National Wildlife Federation.

    We'll have a short recess while you are getting adjusted there. As soon as Mr. Wamp gets back we will resume, and I will be back momentarily.
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    Mr. WAMP [RESUMING CHAIR]. It is my understanding that Mr. Boehlert introduced the panel, so if we could we'll start with testimony of Ms. Gordon.


    Ms. GORDON. Thank you.

    My name is Linda Gordon. I am a homeowner, a small business owner, and a township supervisor.

    In 1983, I bought my dream home on 3 acres of woods in East Goshen Township in suburban Philadelphia. I was told by the realtor and the township that a housing development was to be built on the farm behind my property, but there were no houses to be built in the forested area adjoining my property. What my husband and I were not told was that the plans called for damming the stream, cutting down almost one acre of woods, for a large water retention pond, and that the forested area was a wetland.

    In 1987, we awoke one morning to find pink surveyor ribbons in the forest. It was then that we found out about the water retention pond.
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    In the 4 years between 1983 and 1987, I became aware of wetlands and knew that skunk cabbage was an indicator of a possible wetland area. Although water was not usually present, there was a lot of skunk cabbage in the forest behind my house.

    I contacted the Pennsylvania Department of Environmental Resources, the Army Corps of Engineers, and the U.S. Fish and Wildlife to find out what to do.

    The U.S. Fish and Wildlife did come out and look at the property and confirmed that it was, indeed, a wetlanded forest. I then contact the township planning commission, the township supervisors, and asked if they would ask the developer to move the water retention pond to the high, dry farm field above the stream.

    I was appalled to find out that not one person involved in the approval of the development plan at the local level had ever set foot on the property. They had also not required that the developer prove that my property would not become flooded once the trees were cut down, the stream dammed, and the area bermed for the pond.

    Fortunately, the supervisors were able to get the developer to revise his approved subdivision plan and that the developer prove that my property would not become flooded once the trees were cut down, the stream dammed, and the area bermed for the pond.

    Fortunately, the supervisors were able to get the developer to revise his approved subdivision plan and move the water retention pond. They did this, not for concern for my property, but for their concern about their liability should a child drown in this very large pond which only I would see.
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    While this had a happy ending for me, it cost me over $3,000 dollars to hire a land planner to read the plans for me and to present alternatives to the supervisors and the developer. I knew that they would be more likely to listen to a professional than they would be to me.

    As a result of this experience, I ran for township supervisor on an environmental platform. I did not want anyone else to have to go through what I had been through. I won 80 percent of the vote over the incumbents in a hotly-contested race.

    I am happy to say that I have been successful in increasing the environmental awareness of our township boards and commissions. Our township conservancy board now walks every development site that comes in for approval in our township. We require that all wetlands be delineated on all subdivision plans. We also retain our own environmental engineer to verify any wetland delineation that the conservancy board believes questionable.

    As a homeowner and a township supervisor, I am especially aware of the effects of building on or near wetlands and flood plains.

    Prior to the Pennsylvania Department of Environmental Resources tightening the septic certification regulations, many homes in our township which were built, like mine, have wetlands in their back yards and have on-lot septic systems. Our township has had to provide public sewers for 655 homes because many of the on-lot septic systems had failed and the residents could not sell their homes or flush their toilets.

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    This has cost the township in excess of $3 million, and this does not count the personal anguish and expense that our residents have had to endure over the years.

    I believe all of this has happened because we did not know about wetlands.

    I have also had considerable problems with my own septic system, spending over $2,000 to have a well installed in the drain field to allow the field to be pumped when I have my septic tank pumped. I know that I will not be able to sell my home without public sewer which, due to the location of my house in relationship to the nearest sewer line, is estimated to cost me between $15,000 and $20,000.

    Wetlands cannot be developed unless they are drained or filled. Wetlands are Mother Nature's sponge. When they are drained or filled, their ability to retain water is destroyed. That water does not just disappear. It goes somewhere else and can flood the adjacent or downstream properties.

    I understand that it is now fashionable to want to be compensated for not being able to develop wetlands, but I do not believe anybody should have a right to develop their property in a manner which will damage their neighbor's property. The only person who benefits from the destruction of wetlands is the person who sells the altered wetland to some unsuspecting buyer who then has no recourse when their foundations begin to crack and their basements flood.

    H.R. 961 calls for compensating people for not being able to fill or drain wetlands. This will create a land rush to buy wetlands just to be compensated for not being able to build on them. This is ethically wrong and fiscally irresponsible.
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    Land speculators will have a ball, all at the expense of the American people. It will become a catch 22—deny the permit and pay compensation or grant the permit and pay through the Federal flood insurance program when flooding occurs.

    We must not allow short-term profits for a few to result in long-term expense for all. The American taxpayer cannot afford it.

    I believe it is a responsibility of Government to protect the health, safety, and welfare of its citizens. This is what Government does best. I believe if wetlands had been identified in our township, neither I, my neighbors, nor our township would have incurred the cost nor experienced the problems of flooded basements and failing septic systems.

    Thankfully, the Government now has a strong wetlands protection program which ensures that new residents will not have to deal with these problems. H.R. 961 will abolish our strong wetlands protection program.

    I am here today to urge the members of this subcommittee to oppose the Clean Water Act amendments of 1995. I urge you to maintain our wetland protection program in its current form and reject any effort to pay off individuals not to flood out their neighbors.

    While there are problems with delays in the current permit processing system, I believe that could be remedied by hiring more people for the review process, not by gutting the current regulations.

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    Thank you.

    Mr. WAMP. Thank you, Ms. Gordon.

    Mr. Lirette.

    Mr. LIRETTE. Thank you, Mr. Chairman.

    My name is Donald Lirette. I would like to thank the committee first for the opportunity to testify today on the wetland provisions of H.R. 961 because fishermen have an important stake in the debate over wetlands.

    Fishing is in my blood. I am a fourth generation fisherman and was raised on a camp boat. My great-grandfather settled on a barrier island in Louisiana when he came over from France.

    I am president of the Terrebonne Fisherman's Organization in Louisiana, which has over 300 dues-paying members who are commercial fishermen. I also serve as the vice-chair of the Coalition to Restore Coastal Louisiana Board, which is an umbrella organization of over 100 different organizations and thousands of members.

    The coalition is dedicated to the preservation and restoration of the Mississippi River Delta and the coastal wetlands of Louisiana.

    Wetlands provide critical nursery habitat for shrimp, crabs, finfish, and oysters in the Gulf of Mexico that commercial fishermen depend on for their livelihood. Wetlands cycle nutrients out of the mud, sand, and water back into the bays, lakes, and streams, which promotes the growth of the smallest organisms in the aquatic food chain. These smaller organisms are eaten by larger ones, and then by fish.
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    Our fisheries are the most productive in the 48 States. National Marine Fishery Service scientists estimate that 98 percent of the annual fish harvest in the Gulf of Mexico comes from in-shore wetland-dependent fish and shellfish. These fisheries contribute nearly $2 billion to the Louisiana economy each year and provides between 50,000 to 70,000 jobs in Louisiana.

    In addition, the Gulf of Mexico is the Nation's most productive shrimp fishery. Fishermen from Texas, Louisiana, Mississippi, Alabama, and Florida harvested a quarter of a billion pounds of brown, white, and pink shrimp in 1991 and 1992.

    The Nation's annual shrimp harvest generates half a billion dollars for U.S. fishermen.

    Along the Gulf coast, many of the 14,000 fish processing jobs in the area are sustained by the shrimp caught by commercial fishermen. These jobs are directly threatened by the destruction of the productive coastal wetlands.

    U.S. Geological Survey maps show that Louisiana wetlands are disappearing at an alarming rate. This is especially true along the Gulf of Mexico where up to 35 square miles of coastal wetlands are lost each year. In fact, an area of coastal land the size of a football field disappears every 15 minutes in Louisiana. We have already lost over 1 million acres of these coastal wetlands since the turn of the century. Louisiana contains 40 percent of America's coastal wetlands, but we suffer 80 percent of the total wetlands loss.

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    Unfortunately, H.R. 961 will only worsen this problem. I urge members of this subcommittee not to vote for H.R. 961. I have seen first-hand how the destruction of Louisiana's coastal wetlands has directly affected fishermen throughout the Gulf coast. In fact, a fellow shrimper recently reported catching just 12 shrimp one morning. Only 12 shrimp. That's less than one pound of shrimp. It is tough to put food on the table and pay the bills when you only catch 12 shrimp.

    This little harvest is directly attributable to the destruction of the wetlands. With the changes to the coastal landscape, shrimp can no longer get into the estuaries to feed and breed. Since their access is being restricted, the shrimp are either being picked off by predators or they die because the water they live in is too salty.

    Oyster beds are also being destroyed as the wetlands are no longer available to help filter out the pollutants before they reach the oyster beds. As a result, there have been record low oyster harvests over the past few years. In addition, the low quality of oysters brought to market may pose a public health risk.

    The loss of wetlands has also resulted in the flooding of areas that were previously farmed. To show the changes to the landscape, I recently took a friend fishing for redfish. We tied our boat to a pipe sticking out of the water and we were fishing in at least eight feet of water. You can imagine the look of astonishment when I told my guest that the pole was a hoist that was used to lift cut sugarcane onto trucks and trailers in the 1940s.

    Loss of wetlands in Louisiana has also led to an increase in flooding. I was taking a television crew out to show them an abandoned oil production site. The night before, it rained very hard. When we got out to the field, the abandoned oil pit had overflowed and there was an oily film covering the ground. As we walked around in this muck, we spotted an alligator covered with produced waters that was barely alive. This oil also covered some wetlands and contributed to the further erosion of those wetlands.
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    Luckily, we have wetlands to protect Louisiana's property and homeowners from hurricanes. The storm control function of our wetlands became apparent when Hurricane Andrew hit in 1992. The wetlands acted as a buffer, absorbing some of the force of the storm. If we had not had those wetlands, people's homes and properties would have been destroyed like they were in Florida. My State sustained approximately $2.5 billion in damages, compared to approximately $20 billion in damages in Florida.

    To revitalize the fishing industry in Louisiana we must halt the loss of the existing wetlands and also try to restore other areas to wetlands.

    The Louisiana Department of Wildlife and Fisheries, Louisiana State University, and the Governor's Office coordinated an educational campaign to show fishermen the importance of restoring wetlands. This effort was very successful, and it really drove a point home: commercial fishermen will have to bite the bullet in the short term to enable wetlands restoration to take place.

    Mr. WAMP. Mr. Lirette, can you attempt to summarize so we can stay on time, please?

    Mr. LIRETTE. Two more paragraphs.

    Mr. WAMP. Thank you.

    Mr. LIRETTE. The sacrifices the fishermen are willing to make will be pointless if we don't stem the loss of the wetlands in the Gulf ecosystem. If current wetlands protections are removed or weakened, it is the commercial fishermen of Louisiana who will suffer.
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    It is my understanding that the bill before this committee would significantly weaken the wetlands provision program in this country. This is not the right thing to do. We should be focusing on protecting our remaining wetlands. Unfortunately, H.R. 961 will remove the current section 404 regulations and replace them with weaker enforcement standards.

    H.R. 961 will put even more fishermen out of business because of smaller, inferior annual yields. H.R. 961 would remove the EPA's involvement with the section 404 program. I think this would be a bad idea.

    In Louisiana the EPA has brought together user groups such as fishermen, landowners, and bureaucrats to find common ground and work towards common goals on the wetland issues. We need to make sure that EPA has a continued role with the 404 program.

    I urge the members not to support H.R. 961, which would do nothing to protect the lands that are of immense value to the public.

    Mr. Chairman, if I may be allowed, I would also like to add to my testimony something that was just given to me Friday right after I submitted my written testimony, and it is a compilation of all of the permits in the State of Louisiana that came under 404 review and Louisiana coastal use. It has a total of 1,358 permits that were reviewed in the State of Louisiana last year. Of those 1,358 permits, both coastal use and 404, no permits were denied. There are currently only 46 permits that are still under review because more information needed to be done.

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    But the point I'm making is that in a whole year there were no permits denied in the State of Louisiana, so I'm saying 404 is working at its present level. This was 1994 data.

    Mr. WAMP. Thank you for your testimony, Mr. Lirette. Sorry about mispronunciation of your name. Chairman Boehlert and myself, Mr. Wamp, and our ranking member, Mr. Borski, all understand exactly how you feel when people mispronounce your name.

    Mr. Smith.

    Mr. SMITH. Yes, sir. Thank you, sir.

    I want to thank you gentlemen for the opportunity of being here today. My name is Morgan Smith, and I've lived in Elmore County, Alabama, for the past 29 years. I am a retired professor of environmental science from the Federal civil service. I have taught and lectured at a number of colleges throughout the southeast, including the University of Alabama, Florida State, and University of Miami.

    I make no pretense here at playing god with the environment. I think it has been well put together. While I do listen, I want to add I do have 6 letters and 20 photos and several news clips I would like to include with my testimony here today.

    Wetlands are a dynamic force. We need them all. Most everyone on the panel has been drinking water during this time—clean water, we hope—and we also realize it is a dynamic force. We need the oxygen produced by the aquatic vegetation and that surrounding the wetlands.
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    Today, I want to tell you about how my neighbors and I were affected by a development who drained and filled in over 40 acres of wetlands in the Tallopoosa River Valley and flood plain in Alabama.

    This wetland was some of the most pristine and ecologically vibrant land in the area. Some of the people in the neighborhood and I used to take long walks in the area, children caught fish, others hunted ducks and waterfowl, bird watchers are drawn there. They spend their money at the local stations. Bald eagles used to roost and feed there. It was permanent water. We never dreamed that it would ever be ditched and drained.

    Even a novice would have recognized this area as a wetland. It was permanently filled with water, with majestic old cypress trees, willows, marshmallows, cattails, and marsh grasses. Soil Conservation maps clearly indicated it had hydric soils and hydric vegetation found in a wetland. In fact, the area I am talking about is an ancient ox bow of the Tallopoosa River, which has gradually changed over time. The previous owner knew it was a wetland and knew he couldn't develop under section 404 of the Clean Water Act.

    No one is quite sure when this draining and filling began last winter because the drainages could not be seen from the road. In my personal opinion, it is quite a clandestine operation. A local contractor alerted me to the drainage. By the way, that contractor does a lot of development, and it is all environmentally sound.

    I spoke directly with the current developer, telling him it was a wetland. I tried to work with him to find an alternative to his plan—mitigation, also a plan on how to avoid pesticide contamination from his proposed golf course, etc.
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    He told me he had a permit from the Corps of Engineers and he planned to build a golf course and road once he had drained the wetland.

    It turns out he had applied for the permit under somewhat questionable pretenses. The Corps had granted a verbal permit to get rid of a beaver dam and 4 to 5 acres of water. Instead, the trench dug through this wetland is over 4,000 feet long. I alerted the Corps to the violation on June 23, 1994. They issued an oral warning to halt the project on June 24. When that did not produce results, they eventually issued a written cease and desist order on July 14, 1994.

    Unfortunately, most of the damage has been done. The wetlands are gone. The eagles are gone. The bird life is gone. The kids cry, ''Where do we fish?'' In addition, the ditch disgorged muddy, silt-laden water into the Tallopoosa River two miles upstream from where the city of Montgomery, Alabama takes its drinking water.

    The U.S. Corps of Engineers official responsible for the wetlands investigation has publicly stated that construction of this channel was clearly a direct violation of the Clean Water Act, and also assisted some who have destroyed or disposed of unrinsed, sunken gallon containers that have this label on them, clearly marked ''poison,'' are now flowing through. They are not being filtered through this wetland. They are flowing into the Tallopoosa River a mile and a half from where the city takes its water.

    I will invite you to review these photographs to review what—methylparathion was developed by the Nazis in World War II to kill people. It is in our drinking water. And you want to weaken it.
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    The loss of these wetlands has been catastrophic in permitting poisons and silt to flow into this river where a large city takes its water supply. Dead fish are found throughout the drained area. The bald eagles that used to soar over the area have not been seen since. Mosquitos now breed in the puddles from the rainwater.

    All of the aesthetic and recreation opportunities this area provided to the community are gone. We have also lost the natural filter function of the wetlands. It kept the silt, pesticides, and fertilizers out of the local streams. It is no longer there to absorb dangerous floodwaters.

    This destructive project has also affected landowners in the area. My neighbors who live in the lowlands are fearful that their houses will flood this spring—and it is approaching that as I left this morning—since there are no longer wetlands to act like a sponge to absorb excess water.

    In addition to the loss of the wetlands, a new bridge access road within one-half mile of the wetland forms a dam across the flood plain. This dam will, of course, back up water into the housing areas.

    A creek has been bulldozed, which has led to allowing more silt-laden water.

    Calls and letters of inquiry to the Corps have gone largely unanswered. They are very short-handed—seven people to cover the entire State plus parts of Mississippi. We have lost over 4 million acres of wetlands in Alabama, alone, and less than half of our original wetlands still exist. We just simply can't afford to lose more if you want a drink of water for your grandchildren.
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    The majority of the wetland losses are for short-term greed. We are seeing first-hand the destruction of a precious natural resource. All wetlands are inter-connected, gentlemen. There are no separate wetlands. Everything we need to drink is down there. They are vital for the good health of all of our citizens. They are breeding grounds for many species of wildlife. Mostly the wildlife that they are breeding grounds for are homo sapiens.

    The Corps of Engineers is charged with this wetlands protection in my area. They are woefully understaffed. Their regional office is in Mobile, rather than Montgomery, and they only have seven full-time staff members to monitor all of this. Even the projects that they are currently working on they are under-staffed to take care of.

    They need more resources, gentlemen. They need stronger regulation. They need stronger enforcement.

    I use my example to urge members of this subcommittee not to weaken current wetlands protection under section 404 of the Clean Water Act, as is proposed in H.R. 961. My story merely illustrates the need for maintaining the permitting program and strengthening the enforcement.

    These men are good men trying to do their job—men and women. They can't do it.

    It seems to me that the permit program is designed to protect landowners like me and my neighbors from the consequences of wetland destruction. As I understand it, H.R. 961 will only increase the incidence of wetland degradation and destruction by eliminating current wetlands protection. H.R. 961 would weaken enforcement, something we cannot allow to happen. H.R. 961 would do nothing to prevent what happened in my back yard from occurring repeatedly across the State and Nation.
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    I hope this subcommittee will carefully consider the wetlands provisions of the Clean Water Act and not hastily abolish a program that is vitally important. Clean water is essential for all good health. Availability of clean water encourages investment and proper development.

    Thank you.

    Mr. BOEHLERT [RESUMING CHAIR]. Thank you very much, Professor.

    Ms. Goldman-Carter.

    Ms. GOLDMAN-CARTER. Good afternoon.

    Thank you for allowing me to speak to the subcommittee. I'm from Westchester, Pennsylvania. My name is Jan Goldman-Carter. I'm testifying on behalf of the National Wildlife Federation and Trout Unlimited.

    I have been in this section 404 program in one manner or another, as a biologist and as an environmental lawyer, off and on since about 1978.

    There are three main points I would like to leave you with.

    The first one has really been made most eloquently by the other members of this panel, and that is: the wetlands that remain scattered on the American landscape are working hard and they are serving us in many ways that we often don't recognize.
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    Over half of our written testimony is devoted to a detailed and thoroughly-cited documentation of these specific functions and their economic as well as their ecological value.

    You have heard from the members of the panel that these losses of wetlands result in real harm to real people.

    I urge you to inform yourselves about the very real economic and ecological contributions of wetlands and to think twice about voting to dismantle the 404 program.

    Earlier today there was a lot of discussion, and it seemed second-guessing, about the value of nontidal wetlands. I found this in my file, and I would just like you to know of its existence. This is a treatise about wetlands and water quality specifically related to agricultural wetlands. It is not written by the environmental groups, and it is not written by EPA, and it is not written by the Fish and Wildlife Service. It is written by a scientist at the Purdue Co-op Extension Service in West LaFayette, Indiana, and it specifically is about the role agricultural wetlands play. If you would like a copy of that, I'll have copies made and submitted to the committee.

    But I think it is important to recognize that it is very easy to talk about just the cypress swamps and just the——

    Mr. BOEHLERT. May I ask you how lengthy that document is?
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    Ms. GOLDMAN-CARTER. It is about four pages.

    Mr. BOEHLERT. Could we have staff make a copy of it right now? We'd like to have it.

    Ms. GOLDMAN-CARTER. That would be great.

    Mr. BOEHLERT. Please continue. Thanks.

    Ms. GOLDMAN-CARTER. I'd also like to make one comment about one wetland function that hasn't been discussed by the panel at great length, and that is the flood storage functions of many wetlands.

    It is estimated that wetlands save $30 billion a year in repair costs related to flood damage annually. The flood damage that occurred in the upper midwest in the summer of 1993 has been estimated at $10 to $15 billion, at least $6 billion in emergency relief funds from the Federal Government. The link between the 1993 flooding and wetland drainage in the upper Mississippi and Missouri River basins has been demonstrated. Iowa, Missouri, and Illinois have all lost more than 85 percent of their wetlands. A total of 19 million wetland acres have been eliminated in the drainage basins of the Mississippi and Missouri Rivers north of St. Louis.

    I suggest that if you are going to take the Federal Government out of the business of protecting wetlands and streams and rivers, then take the Federal Government out of the business of funding flood control and paying for flood damage, as well.
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    The second major point I would like to make is that the basic structure of the Federal 404 program should be kept intact and not dismantled. A couple of things have been said this morning that I feel I should respond to. One we have heard a lot of is—I believe we heard that no reasonable person would interpret 404 as being a wetlands program. I would just like to read a little bit of legislative history for you.

    A quote from Edmund Muskie, who was one of the authors of the legislation: ''In 1972, the Congress broadened the traditional definition of navigable waters in recognition of the fact that pollutants migrated into the Nation's waters from water courses, swamps, creeks, and underground sources, many of which were simply not 'navigable' in the traditional sense, but the pollutant impact was sufficient to merit regulation.''

    That is from the ''Congressional Record'' in 1975, a statement of Edmund Muskie.

    Later, in 1977, when Congress reaffirmed its intention to regulate wetlands through 404, a quote from the ''Senate Report'': ''There is no question that the systematic destruction of the Nation's wetlands is causing serious permanent ecological damage. The unregulated destruction of these areas is a matter which needs to be corrected and which implementation of section 404 attempted to achieve.''

    This subcommittee and the Merchant Marines Fisheries Committee and others have reviewed this legislation periodically in the last 10 years. The Supreme Court has reviewed it in the Riverside Bayview case, and never has a statement been made that, among those reasonable parties, that this legislation was not intended to regulate wetlands.
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    In terms of these horror stories, it has already been said but I would like to reaffirm that most of them have a very important other side of the story, and that what you are hearing is one side. I would ask that you ask the question of what is the other side of these horror stories. Often they have been enforcement actions similar to the O.C. Mills case. The National Wildlife Federation would be happy, as I'm sure the Administration would be, to answer any questions and do some investigation into these stories.

    With respect to the Beveridge & Diamond report, the report that was testified to by Virginia Albrecht and Bernie Goode, I would ask that you allow us to submit the National Wildlife Federation response to that report. We did not accuse them of cooking the numbers, but what is true is that this is a complex program and you can choose your scope of analysis, depending on which numbers you pick. What we are saying is that the study looked at a very narrow picture. It did not look at a random sample of individual permits and it did not look at general permits, and that is essentially a very narrow picture of what is going on with the 404 program.

    Mr. BOEHLERT. We can insert that at the end of your statement. I hope you are about ready to wrap up.

    Ms. GOLDMAN-CARTER. I will wrap up.

    My third major point is that a vote for H.R. 961 is a vote for big environmental losses, and these are not just losses of wetlands. These are losses of creeks, streams, rivers, and lakes, as well as wetlands. Section 404 is repealed by this legislation and virtually nothing is put in its place with respect to the other public trust waters of the United States.
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    It is also a vote for big Government and big bucks. It cannot be disguised as a balanced environmental bill. It would be a lot cheaper and a lot more honest to simply repeal 404 without replacement.

    What we would ask the subcommittee to do is to focus instead on measures that make the existing 404 program more user friendly for small landowners and measures that reward private landowners for voluntary wetland conservation, not to focus on measures that turn back the clock on the Nation's efforts to protect its wetlands and waters.

    Thank you.

    Mr. BOEHLERT. Thank you very much.

    I once had an aunt who used to, when I was a youngster, say to me, ''Patience is a virtue. Possess it if you can. Seldom found in women, never found in men.'' But I have been patient today, and finally I found a panel that is saying some things that are in general agreement with what I have said right along.

    But let me challenge you. I hope none of you who are advocating that we retain the basis system are wiling to embrace the basic system as it is without change. We've got some real problems in the basis system. There is not a single Member of Congress, including Members like me—and I probably wear the badge of green—who haven't got horror stories about the 404 permitting process.

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    So when Mr. Hayes and I sit down, for example, and swap stories, he's got some real baddies and so have I. We need some change.

    Tell me what is the most egregious thing wrong with the present system and what you are willing to do to address it.

    Ms. Goldman-Carter.

    Ms. GOLDMAN-CARTER. I think the most egregious thing wrong with the system is probably its responsiveness to people. By that I mean I think the environmental community is treated even more poorly than the regulated community by certain folks in the field.

    I think that does stem, in large part, from a kind of seige mentality. I tend to agree with Mr. Smith that I don't think there is anything bad about the people running this program. I think that maybe we all under-estimate how big a task they have at hand and how inadequately they are prepared to perform it in terms of resources.

    I think a lot can be done in terms of directing the agencies better to do their job in a more user-friendly way.

    Mr. BOEHLERT. I think we all can agree to that.

    Does anyone else care to comment on that?

    Mr. SMITH. I agree wholeheartedly on that. I watched these men in the field. I spent hours with them assisting where possible. My goodness, you have men with tears in their eyes because of the overwhelming disaster they see coming forth in front of them.
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    They need help. They don't need artificial limitations. They need help in handling the mountains of paperwork for each thing they investigate. The whole investigative process is enough to discourage them. They are being discouraged—good, civil servants—by the overflow of work they have to do.

    All I know is the Corps. The EPA and the Fish and Wildlife I'm not familiar with.

    Mr. BOEHLERT. I can guarantee you this: we're not going to build up the civil service. We're moving in the opposite direction, so they are not going to get more bodies to help them with the assignment, they're going to have fewer, and they've got to do it more effectively.

    I think, from my own observation, the moment President Bush uttered the statement, ''no net loss of wetlands,'' I think the decision-making process almost ground to a halt because people were afraid to make a decision. They weren't quite sure what was meant by the statement.

    I've been less than enamored, quite frankly—and the next panel will include the Corps of Engineers—with some of the activities of the Corps.

    One time I had a case involving a delay of 2 or 3 years in a problem I'm trying to resolve—a very small problem. I view it as a small problem. And I was told that I should feel some comfort in the fact that I'm better off than a lot of other people who have been waiting a lot longer for a decision. That is unacceptable.
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    Professor, do you want to follow through?

    Mr. SMITH. If I might add, in all fairness to the man who drained this particular instance and is creating a terrible thing, he did that without any knowledge because he was frustrated with the delays in getting no permit or a permit, so he took a verbal okay from a neophyte staff member, and here we all suffer for it—the taxpayers more perhaps than anyone else.

    Mr. BOEHLERT. Let's talk about mitigation banking. I'm enamored with the concept of mitigation banking, and a lot of my friends in the environmental community caution me. They say, ''Don't get too enthusiastic because it is not for real. There is no way you can substitute something artificial for something that's real.'' I say, ''Gee, a lot of people are walking around with artificial hearts, and they seem to be functioning okay.''

    Does anyone care to address the subject of mitigation banking?

    Ms. GORDON. How I feel about it is that the big problem I see with allowing permits when they want to talk about a small acre here and a small acre there, the problem is you fill in—like a developer comes in with a plan, and all you see is his little section. You don't see what has been filled in downstream or upstream.

    If you want to do mitigation banking but it is not in the same watershed, that's not going to help the people. So you fill this one in, and now the water is just going to go downstream.
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    Mitigation has to be done so that it is mitigating the water problem that is going to develop because you have drained or filled that wetland in that area. Putting it somewhere else isn't going to help those poor people who are now going to get flooded who never were.

    Mr. BOEHLERT. That's logical.

    Ms. GORDON. And when you asked about the Army Corps and the problem, several times we have asked the Army Corps to come out and look at different sites in our township. The frustrating thing was every 6 months there was a new person. We'd say, ''What's happening?'' and the guy would say, ''I'm quitting. I can't deal with this any more. I have got 64 cases, and I don't have enough time to see them or do them right.''

    These people wanted to do it right, they just—and you are saying you are going to cut down the staff? The problem is more and more people want to develop wetlands. There is more and more work that has to be done with fewer people, and you can't retain quality people and work them to death. They just quit and they'll go into private industry, and that's where a lot of them go.

    Mr. BOEHLERT. Yes. Does anyone else care—my time is up, but I've still got the same question, so we can finish this up.

    Ms. GOLDMAN-CARTER. I would like to respond to the mitigation banking question.
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    I have been looking very closely at—the Corps has done a recent, quite extensive study of some of the existing banking projects that are out there, and you may well want to ask them about those.

    What it told me was—and I think I may be not representing all members of the environmental community on this, but what it told me is that mitigation banking can be a very positive thing. It can only work better than some of the dismal history we have had with on-site mitigation.

    The problem is that in order to do it right it has to be done very carefully and very responsibly, and by that I don't mean just that someone follows a permit. There are very complex questions involved about whether the Corps even has the authority to enforce a mitigation banking agreement.

    They are not simple questions. How do you bond or obtain financial assurances from a Department of Transportation? That may seem like a silly question, but what the Corps' own studies show is that many of the—at least a handful of the Departments of Transportation who have been the leaders in this banking area have simply shrugged their shoulders and turned away from their own banking commitments saying, ''We don't have to issue a financial bond. We are good for the money,'' but then they turn right around and not follow their own promises about what they are going to do.

    So I think the environmental community at base is not opposed to banking if it is done responsibly, but doing it responsibly is not inexpensive and it is not easy.
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    Mr. BOEHLERT. Yes.

    Thank you all very much.

    Mr. Borski.

    Mr. BORSKI. Thank you, Mr. Chairman.

    Mr. Chairman, first, if I might, we received a correspondence from the Sierra Club which states, ''For the record, the Delta Chapter of the Sierra Club, which is the State entity, and the National Sierra Club do not agree with statements made by Mr. Palermo. Mr. Palermo quoted a Mr. Harold Schoeffler as representing the views of the Louisiana Sierra Club. Mr. Schoeffler is not head of the Delta Chapter and does not represent the views of the Louisiana Chapter or the National Sierra Club.''

    I would like that statement to be included in the record at the end of the first panel, if that's possible.

    Mr. BOEHLERT. Without objection, the correspondence you have just quoted from will be included in the record at the conclusion of the first panel's testimony.

    Mr. BORSKI. Ms. Goldman-Carter, let me start with you, if I may.

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    You have heard today that a number of groups support a statutory definition of wetland. They argue that the definition is a matter of policy, not science. What is your reaction to that?

    Ms. GOLDMAN-CARTER. My reaction is that the definition should clearly be a matter of science first. I tend to really—I believe Mr. Hausmann put it quite well. The definition of wetlands should be a scientific matter. The question of how we regulate those wetlands is a matter of policy, no question about that.

    In terms of the definition of wetlands, I think it is really important—we have heard continually throughout the day, ''We've just got to have a definition of wetlands. I just don't know what a wetland is. It is just not clear to me as a lay person what a wetland is.''

    Well, we have had a definition of wetlands in the Corps' regulations since 1977. It hasn't changed. It is a good definition.

    The fact that some people may not understand why an area is being delineated that is dry some times of the year does not, to me, justify legislating a definition that is a lot wetter. And it is going to disrupt a lot of things in this country.

    When you look at the takings issue, the last Lovelady's decision basically was based around, ''When did this landowner buy this land, and was it regulated at that time?'' If this Body goes and turns around and redefines wetlands and changes the law, we have now completely sent a new signal to the people of the United States about what is regulated and what is not and what the value of property is.
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    Mr. BORSKI. Do you think we should wait for the National Academy of Science to report on a definition of a wetland before we move forward with legislation?

    Ms. GOLDMAN-CARTER. I do, and the reason is not, I think, as simple as it might appear. The wetlands definition has been the same. What the NAS study is looking into, I believe—it is my understanding—is not so much whether that definition is valid, because the definition is somewhat broad, but how it is actually going to be applied in the field.

    Now, we are not just waiting around sitting on our thumbs while we are waiting for the NAS study. We are currently using the 1987 Corps Manual. It has been used for almost 10 years. People seem to be—everyone but some environmentalist tend to be relatively comfortable with that manual. So it seems to me to only make sense to wait and see what the NAS study comes up with before you make another change.

    Mr. BOEHLERT. That report was due out the 13th of March. I'm advised that there is going to be a delay until ''later this spring.''

    Mr. LIRETTE. Mr. Borski, to back up what she is saying, I just submitted a document from Louisiana showing that 1,358 permits were applied for last year. This is the most recent summary we have of permit applications. None were denied using the 404 process.

    So everyone is learning to work within the 404 process, and everyone that has submitted applications have worked through it. And out of those 1,358 permits, only 40-something of them are still under review, which may have been submitted back in December which are still under review.
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    Mr. BOEHLERT. That was last year 1,358 permits were applied for under 404?

    Mr. LIRETTE. Yes, sir, and none of them were denied.

    Mr. BOEHLERT. And how many are outstanding at this juncture?

    Mr. LIRETTE. About 40-something. I sent up a copy of the summary. I think it was 46.

    Mr. BOEHLERT. Is that appended to your statement?

    Mr. LIRETTE. It was added to my statement because I just received it Friday, and it has all the numbers that does support that 404 is working in Louisiana.

    Mr. BOEHLERT. This is a family affair, with just the two of us here, so if I may interject a little bit——

    Mr. BORSKI. Yes.

    Mr. BOEHLERT. What about the previous year? Do you have any figures? Was this an aberration or is it something that on a regular basis most of the permits in a timely fashion are approved?
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    Mr. LIRETTE. We receive these things on an annual basis, and we received this report. I think I probably do have 1991-1992's, but what I'm saying is 404 process is working better now. This is a result of it. This is a summary that I turned in today as part of my testimony that shows that 404 is working in Louisiana.

    People who are not asking for permits know that they won't get them. That's why they are not applying for them. They are working within the parameters of 404. That's why we have zero permits denied last year.

    Ms. GORDON. May I say something?

    Mr. BOEHLERT. Yes, ma'am.

    Ms. GORDON. I have been amazed that people think that we should have a definition of wetlands so that a lay person can identify a wetland. I cannot determine whether or not my soil is suitable for an on-site septic system. I hire an expert. I hire an expert if I want to build a house. That's why you have experts, because there are certain things every lay person should not be able to know.

    Like I said, in our township we require that any subdivision—that wetlands be delineated on the plan. All people have to do is hire—if they are going to subdivide their property they have to put in a plan, it has to show the elevations of the land, it has to show the types of soils, so all they have to do is one more step, which is delineate the wetlands.
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    I think it is ludicrous that people think that we should have a definition that a lay person can go out and walk around and say, ''Yes, I do,'' or ''No, I don't.'' You hire a professional.

    Thank you.

    Mr. LIRETTE. And, again, in the State of Louisiana the governor has taken steps to help the public in this aspect. They've hired an ombudsman that works with small businesses and works with the public in helping them through the 404 process. So we have gone a step further than what 404 was originally intended for, and we have helped people hands-on in determining whether they would even have a shot at getting a permit. So I think those numbers that I gave you all today reflect the efforts also of the governor's office in trying to help the citizens of the State of Louisiana.

    Mr. BORSKI. Mr. Lirette, let me stay with you for a second, if I may. H.R. 961 would place a limit on the amount of wetlands which could be classified as most valuable. No more than 20 percent of any county or, in Louisiana's case parish, could be so classified. How would that affect coastal Louisiana, and specifically your business?

    Mr. LIRETTE. In Terrebonne Parish we depend on the majority of the land mass in Terrebonne Parish as a critical nursery habitat for fisheries. Fisheries in Terrebonne Parish is the number two revenue-maker for local government, so we are very dependent on the wetlands. And if only 20 percent is classified, whereas the whole coastal zone all the way up to Baton Rouge is classified as wetlands in the determination of 404.
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    Mr. BORSKI. Would you send us a list of the organizations that make up the Coalition to Restore Coastal Louisiana?

    Mr. LIRETTE. We sure could provide that for you.

    [Information to be supplied follows:]

    Mr. BORSKI. And could you elaborate either now or in writing for me on the process you said was taking place in Louisiana where you said EPA had brought together groups such as fishermen, landowners—and I'll government employees, I think you said bureaucrats—to work together towards common goals on wetlands issues?

    Mr. LIRETTE. I think Mr. Whelan from the EPA is here. He has been spearheading this. This was an idea that I brought forward back in 1988 asking the governor at that time to do this, and it didn't happen, so I pushed EPA.

    What we are doing now—we are on our second workshop. I am a member of that work group. We are in the process of helping EPA, along with the National Science Committee, in developing some guiding principles on marsh management in Louisiana. I think Mr. Whelan will testify for EPA this afternoon on that process.

    Mr. BORSKI. Ms. Gordon, let me sneak in a quick last question, if I may, Mr. Chairman.

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    Are you aware of any recourse that you may have against the Government to recover the money you spent to ensure that the wetlands adjacent to your house were not destroyed? Or, assuming you didn't fight that and they were destroyed, is there any measure you could take in that instance?

    Ms. GORDON. No. I don't believe there was any. I guess the only thing I could have done was, had it happened and I got flooded, I guess I could have taken the township to civil court, which would have then cost me more money. I'm just fortunate, like I said, that it was in such a location that the only reason they asked was that it would have been at the bottom of a steep, 20-foot embankment, and my house would have been the only one who would have seen that large lake. But no, I would have had no recourse.

    Mr. BORSKI. No further questions, Mr. Chairman. I just want to thank our panelists. It was very helpful.

    Mr. BOEHLERT. I want to thank all the panelists.

    Ms. Gordon, I want to tell you that I agree with you that we should consult experts in all that we do. Let me tell you what the political experts are telling us. Political experts are telling us that H.R. 961 is on a fast track and it has probably majority support. It doesn't have the Chair's support, and I'm trying to work with the authors of it to see if we can fashion something that I think is more responsible than I think the original version is, but we've got our work cut out for us. So I would hope that all of you would think seriously on what we can do to—give me your suggestions on improving the existing system, which I agree with the authors of H.R. 961 is not passing the test in terms of being responsive to the problem and responsible in dealing with it.
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    Any suggestions you might have I would welcome, because I might say I'm now in the majority. I sit in this chair. But let me tell you I'm also in the minority of the majority in the instance of this particular issue.

    Thank you all very much. We really appreciate it.

    Mr. BOEHLERT. I'll introduce the next panel and then I will go over to vote and we will resume in about 10 minutes.

    The next panel can assemble.

    We have: Mr. Robert Perciasepe, assistant administrator for the U.S. Environmental Protection Agency; Mr. John Zirschky, U.S. Army Corps of Engineers, Assistant Secretary of the Army for Civil Works, acting; Tom Hebert from the U.S. Department of Agriculture, Deputy Under Secretary for Natural REsources and the Environment; and from the Fish and Wildlife Service, Robert Davison, Deputy Assistant SEcretary for Fish, Wildlife and Parks.

    Gentlemen, if you will get assembled we will recess for about 10 minutes and resume as soon as the Chair can get back.


    Mr. BOEHLERT. This is a self-serving declaration. We may not have quantity, but we've got quality.
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    Why don't we start? Mr. Perciasepe, would you commence, please? Excuse the informality, but it has been a long day and it is warm in here. If you feel so inclined, you can remove your jacket. No one is going to be offended.


    Mr. PERCIASEPE. We appreciate that, Mr. Chairman, and I want to thank you on behalf of the Administration panel for the invitation and the time to talk a little bit about what the Clinton Administration has been doing on the wetlands program, how we are working together to make improvements, and also to answer your questions.

    I am going to issue a joint statement on behalf of the EPA, the U.S. Department of Agriculture, the Department of Army, Department of Interior, and Department of Commerce, I'll issue an opening statement and Dr. Zirschky will cover some of the performance measures that we have in the program, as well. And then, of course, we'll all answer the questions.

    This joint statement is indicative of the team approach this Administration takes to working on this program and the wetlands policy. We work quite closely together, in a coordinated way.
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    When the Administration started several years ago, there was controversy over the wetlands program. There were a number of pending issues, many of which you have heard about already today. This prompted a serious review by the Administration of the entire wetlands program, from top to bottom.

    The goal was to have a fair wetlands program, a predictable wetlands program, and an efficient wetlands program that protected wetlands but, at the same time, reduce the burdens on landowners.

    Before I talk about that plan I want to mention very briefly what we are talking about here. We are talking about some extremely valuable and productive resources in the United States. We're talking about wetlands that perform vital flood control functions, that are essential for habitat, that provide a useful and very important pollution control function across the board in our watersheds in the United States. They also are the source of recreation and commerce in the United States.

    From a recreational standpoint, there is a $600 million per year waterfowl hunting economy in the United States. Without wetlands there wouldn't be any waterfowl. It is like A equals B there. Regarding fisheries, you have heard testimony that 90 percent of the southeastern United States fisheries depend on coastal wetlands. Fisheries in the United States that depend on wetlands generate $15 billion annually.

    From a pollution control standpoint, studies have shown wetlands can reduce phosphorous loading to rivers and lakes by almost 80 percent, and nitrogen loading in the upper 80 percentages range.
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    When we started to look at the wetlands program back in 1993, we had a number of inter-agency meetings, a lot of stake-holder involvement. In August 1993, we came out with a wetlands policy for the Administration that emphasized streamlining, increased cooperation with landowners, improved science, and improved participation by the States. This was developed by an inter-agency work group, and you still see such cooperation here this afternoon. We took the views of Congress, views of farmers, views of environmentalists, scientists, developers, and State and local officials.

    I want to talk a little bit about where we are in implementing that program. Immediately upon completion of the action plan in August 1993, we clarified in regulation that 53 million acres of prior-converted wetlands are not regulated by the 404 program in agricultural areas.

    We put guidance out to the field in August 1993 reflecting that all wetlands are not the same. We call this our ''flexibility guidance,'' and it directs the field folks on how to look at the values and the commensurate impacts at the permit level.

    The Natural Resources Conservation Service, United States Department of Agriculture, is the contact point now for wetlands jurisdictional determinations on agricultural land for both the 404 program and the swampbuster program under the Food Securities Act.

    We have expanded mitigation banking. Since we're doing this as a combined statement, can I have a little extra time?

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    Mr. BOEHLERT. Go ahead.

    Mr. PERCIASEPE. Just in the time that the action plan has been in place, we have almost doubled the number of mitigation banks in the United States from around 100 to almost 200, and in yesterday's ''Federal Register'' draft guidelines on mitigation banking were published jointly by the agencies.

    We have increased State funding for wetland conservation programs. We have done work in Alaska to reflect unique circumstances of that State. And we have had more funding for the wetlands reserve program in the Department of Agriculture.

    Summarizing what we released yesterday, the mitigation banking guidance is out for comment, and it will set up a good framework for further encouraging mitigation banking in the United States.

    We have provided additional landowner flexibility. We have announced a nationwide permit tp be propsed for homes with an impact of a half acre or less. Individuals already owning a wetlands tract would be covered for a single time use of the general permit, and it would be for not only the home but also ancillary facilities like driveways, garages, and septic tanks.

    Just yesterday the Corps of Engineers and EPA signed guidance to the field, a copy of which I have here for the record—to provide small —effective immediately as of today—to provide small landowners flexibility for up to 2 acres of impact a streamlined alternatives analysis. For landowners building or expanding a house or farm building or expanding a small business, the alternatives to be looked at are generally limited to property already owned by the applicant.
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    We have increased our State emphasis since August 1993. I call your attention to the map over there—the red, white, and blue one. The States in red have either assumed a State program—Michigan and New Jersey—have State programmatic general permits. Under such a general permit from the Corps of Engineers, they have assumed major roles and responsibilities in the wetlands program. This reduces the Federal day-to-day activity and pushes it down to the State level.

    The States in blue are States that have done studies with or are doing studies, either on parts of the State or on the whole State basis, on how they can get further involved with the program.

    Another thing that we have been advocating is watershed and advanced planning. Watersheds are the right level to take a look at anticipated impacts and values of wetlands. They are the right level to be thinking about mitigation banks. And they are the right level to tie in preservation of these resources with local needs.

    We have over 40 of these going on right now in the United States, and we want to have more.

    This tailoring at the watershed level is more scientifically sound than broader national schemes to classify values of wetlands. We encourage more of this at the watershed level, and we would like the Congress to endorse the programmatic general permits that we have been pushing with the States.

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    From the agricultural perspective, I already mentioned that USDA and the Natural Resources Conservation Service are now the point of contact for the 404 and swampbuster jurisdictional determinations. The Corps is working on a nationwide permit to authorize minimal impact conversions, and EPA is working to clarify that wetlands created solely by irrigation and other artificial means are not regulated under the Clean Water Act.

    Let me say something about the 1987 delineation manual. We have looked at the different manuals and we have held with the 1987 manual. This is of the compilation of expert advice on how you determine a wetland, but we also understand that may even be flaws in that manual. We continue to await the results of the National Academy of Sciences report, and as indicated a little earlier we are expecting it in late April or early May. I think that's the time frame I have been given.

    We have absolutely committed that when we get that report we will look at it, we will field test parts of it, and where appropriate we will adjust the manual based upon those scientifically-based determination.

    We are also hoping that the report will give us insights into some of the regional aspects of wetlands.

    I have also mentioned that we have encouraged partnerships with private landowners. We've been working with States on guidelines for private landowners—here is one from California and one from Maryland—that show how we have been trying to reach out to landowners on how they can work with wetlands on their property.

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    We have increased funding for the wetlands reserve program, and the partners in wildlife program in the Department of Interior is also forming strong partnership with private landowners.

    Let me say, in summary, that in 1993 this Administration saw some controversy. We saw and considered a record of uneven implementation. Many of the stories you have heard today were on the table when we were considering these problems a little over a year and a half ago.

    We listened. We listened to the case histories that you have listened to, and we developed a plan of action. The success of our approach shouldn't be judged on a rehash of the things that we've already looked at and are dealing with, but we should be looking at where we have come since 1993. What progress are we making? And how are we making a program fairer, more predictable, and more efficient and effective in protecting wetlands and responsive to the concerns of the private landowners of the United States?

    To give you more insight into what the numbers say and how program performance has been improving over the time we have been concentrating on this, I'm going to turn now to John Zirschky, the Assistant Secretary for Civil Works in the Department of Defense.

    Mr. BOEHLERT. Mr. Zirschky.

    Mr. ZIRSCHKY. Mr. Chairman, Mr. Borski, thank you for the opportunity to be here.

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    As mentioned, I'm John Zirschky, the Acting Assistant Secretary of the Army for Civil Works.

    Mr. Perciasepe talked about the President's wetlands plan and some of our efforts. I'd like to talk a little bit about our performance.

    I am not going to claim that we make everybody happy. You and I both know that we have had problems in that area. But I don't know of a retail chain in America that makes every customer that walks in the door happy, yet they stay in business, they maintain profitability, they do their job.

    We think, in the overwhelming majority of cases, that we treat the customers fairly.

    I'd like to talk a little bit about our programs. There are about 90,000 activities a year, but about 40,000 require some kind of a permit, a general permit. That's the top part of the pyramid. And the permits are generally issued, on average, in 16 days.

    Only 4,000 permits require an individual permit—4,000 activities. We get 74 percent of those done in under 120 days, but we do have some that drag on a while, so our average is about 127 days.

    In the white part of the pyramid we have about 1,600 applications withdrawn. I can give you some statistics on what happens to those. Some of them are withdrawn because they don't need an individual permit—they are covered by a nationwide permit or they can get a general permit.
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    We only denied about 358 projects during fiscal year 1994, and none of the projects were vetoed.

    In terms of our entire regulatory program, in fiscal years 1992 and 1993, we denied about .5 percent of the total activities. In 1994, we denied about .4 percent across our regulatory program.

    The more important chart is the average processing time in days. For all the permits that we have, on average in 1994 our permits took 26 days from the time the customer came in. That's an 11 percent increase just from last year. We're pretty pleased with the progress we are making.

    In just July of last summer we had over 200 permit applications that were over 2 years old. In January of this year we have 81 that are over 2 years old. That's a 60 percent decrease in the number of old permits we have languishing around. We still have a few that I think members of the committee are familiar with, but we have made some significant progress.

    We are now trying to put together a plan to address these 81 permits and to keep the number from getting higher again in the future.

    Mr. BOEHLERT. I think I have one of those 81.

    Mr. ZIRSCHKY. I'm afraid so, Mr. Chairman. I do believe we are making progress on that front, though. We've been working with the State of New Jersey. In fact, we sent a letter to them recently trying to make sure that they are on board with the current proposal. We were a little disappointed with some confusion when we were on the site, that the State was not represented, so we are trying to work with them sort of after the fact to make sure that they are comfortable with where we are headed. But I hope we have a solution to that case now. I plan to be kept regularly informed about the progress of that permit in New Jersey.
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    Mr. BOEHLERT. Doctor Zirschky, I would hope that on all 81. That is not too many to monitor on a regular basis. I hope somebody is really looking at them very closely.

    Mr. ZIRSCHKY. Yes, sir.

    Mr. BOEHLERT. Okay.

    Mr. ZIRSCHKY. In fact, we have a special book set aside for our problem permits, controversial ones, that we can leaf through occasionally and make sure that things are moving along.

    I have a few more minutes left.

    We are in the process of getting a draft regulation out on the administrative appeal process for permits. On March 3rd I signed a proposed regulation on the wetland delineator certification program. We are working to try to get procedures in place to get our permit time down to an average of 90 days or less to get our permits out in 90 days. And we are committed to working with the other agencies here at the table and with the State agencies in making the program work better.

    With that, I'll stop and be pleased to answer any questions.

    Mr. BOEHLERT. Fine. Thank you.
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    That concludes your formal presentation? All right.

    Let me ask you—give me the two or three most serious objections you have to H.R. 961.

    Mr. ZIRSCHKY. I have some general concerns, Mr. Chairman, about the——

    Mr. BOEHLERT. General concerns? I want two or three of the hot button issues.

    Mr. ZIRSCHKY. The takings provisions, that part of the bill. The delineation requirement that we can just classify wetlands in advance. The mapping requirements associated with that and the cost will be, we believe, tremendous. Once you map something you don't know about all the development that is taking place after that fact, so you have to continually go back and rework it. We believe that the individual permit process allows us to sort of judge things as they are at that time, while also monitoring some of the cumulative impacts.

    Those are some of our key concerns.

    Mr. PERCIASEPE. I would add a couple of things.

    First, again on the categories, I don't think the categorizing or setting of values and functions of wetlands is a bad idea. We agree with that idea. But on a national scale it is very hard to see how we will be able to do that scientifically or even procedurally. We'd much rather focus on wetland values at the watershed level and taking regional differences into account and working on a scientific basis as we do that.
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    But even more importantly, there is a definition of wetlands in the bill that would remove 30 to 50 percent of the wetlands that are currently defined by parameters similar to the 1987 manual from the definition and out of the program. We don't think that is based completely on a scientific basis. We ought to look to learn from the scientists when we get their advice in another month or so.

    Under the definition that we see in the bill, portions of the Everglades would be excluded from the definition of a wetlands. Portions of the Great Dismal Swamp would be excluded from the definition of a wetland. Even a layman understands that the Everglades is a swamp, a wetland.

    We have got here an idea to create a definition that will be helpful but, on the other hand, we have to base it on scientific fact on the functioning nature of these wetlands.

    We have places in floodplains that are wet for a week or 2, and most of the spawning of fish takes place there, and in other parts of the year you might be able to kick up dust there. Yet, that's a high-value wetlands. It is not a low-value wetlands just because it isn't wet for certain parts of the year.

    So we have to be careful and rely on scientific understanding of these functions, but we are not opposed to finding schemes to take values and functions into account in the wetlands program. We think that's important.

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    In some of the decisions we have recently made in terms of half-acre cut-offs and other things of this nature, we are recognizing some de minimis point where the impact is not commensurate with the amount of regulatory response. That's another way that we are trying to get to some kind of a classification system.

    I'll turn this over to anyone else who wants to add to that.

    Mr. BOEHLERT. One of the complaints that we often hear is that there are simply too many Federal agencies involved in the management of the 404 program. With the Administration's announced emphasis on streamlining the program, reducing regulatory burdens and delays, and applying the program in a consistent, even-handed manner, wouldn't it make sense to give control of the program to a single agency? Wouldn't that really be reinventing Government?

    Mr. PERCIASEPE. A lot of people continue to try to invent the perpetual motion machine, and they never quite get there, so they reinvent it every time. But let me say that the existing program is complex, and no one is going to deny that, but there really are specific, non-overlapping responsibilities that we each have.

    First, the Corps is responsible ultimately for the permit issuance. EPA is responsible for the environmental guidelines. Under the normal review processes that we have on many Federal programs, not just wetlands, the USDA, Fish and Wildlife, and the National Marine Fisheries Service are involved.

    Under memorandums of agreement to organize our roles, we have partitioned the work out in a non-overlapping way. We should look at how that works.
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    Mr. DAVISON. I would just add, Mr. Chairman, that from the perspective of the Department of the Interior, wetlands obviously are important fish and wildlife habitats, and the fish and wildlife that inhabit those wetlands are also an important economic resource in this country. You have heard the figures of the roughly $600 million waterfowl hunting industry and billions of dollars in fisheries.

    The Fish and Wildlife Service provides technical expertise on the impacts to those fish and wildlife resources from various wetland activities and ways of minimizing those impacts so that both the activity can go forward and the fish and wildlife resources are protected.

    I think in a time of—if we want those resources to be protected and those economic resources to be protected, then I think that would either have to be done as it is currently, with the Fish and Wildlife Service providing that technical expertise, or by having one of the other agencies develop and hire that technical expertise so they can make those decisions.

    At a time when we are trying to reduce the size of Government, I think it makes more sense to work on an efficient inter-disciplinary approach to these questions so that we address the water quality impacts, minimize the fish and wildlife impacts in an efficient manner without asking each agency to develop its own expertise.

    Mr. BOEHLERT. Mr. Perciasepe, would you concede that some of the previous panelists—National Homebuilders, the realtors—had some legitimate concerns and complaints about the program? And assuming that you would concede that, because obviously you are trying to improve a program that you have indicated needs improvement, do you feel your initiatives announced yesterday address the overwhelming number of concerns advanced by people that we are interested in working with—the homebuilders, the realtors?
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    Mr. PERCIASEPE. Let me say something briefly, and perhaps some of the other panelists will want to respond.

    The term ''overwhelming'' might be too strong, but I definitely agree, and I think everyone on the panel does, that efficiency and streamlining are appropriate in the program. We have to focus on the highest risk, focus on the most valuable resources, and re-tool the regulatory system to do that. And we have to push the non-regulatory approaches that I mentioned in my testimony.

    We to strive for continuous involvement of the stake-holders and make adjustments as we go along from the original plan that we came out with a little over a year and a half ago.

    I think a lot of the stories and a lot of the concern that we continue to hear are from long ago. That's not to say that there still aren't problems. But the preponderance of them are older than newer, and the program is changing as we are sitting here. We are trying to address some of the major concerns that the stake-holders have presented to us.

    The efforts over the last 18 or so months have been designed specifically with that in mind—to deal with the majority of the concerns—the overwhelming concern that the different groups have.

    Mr. BOEHLERT. The map you showed up there—I think there were as many white States as there were red and blue combined. What are you doing to facilitate and encourage delegation of major parts of the 404 program to the States?
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    Mr. PERCIASEPE. Again, we have increased the amount of funding in our grant program to States up from, around $1 million a year in 1990 to $15 million a year in this year's President's budget request to Congress.

    That money is seed money that goes to the States to do planning to achieve the programmatic objectives.

    We have increased the number of States with State programmatic general permits, included in the States colored red. Although it is not many, we have doubled the number of States that have assumed the program in the last 18 months. And we continue to push very hard.

    I would be remiss if I didn't say lack of money is an impediment, but I also would be remiss if I didn't say we feel strongly that the more State involvement in this program the better it will be over the long haul. So we are looking at a number of ways to get States more involved with the program, not just the full assumption.

    We are looking at programmatic general permits, we're looking at State general permits, we're looking advanced wetland planning through the grants program, and a number of other State-specific kinds of improvements.

    Mr. BOEHLERT. Doctor Zirschky?

    Mr. ZIRSCHKY. Mr. Chairman, as part of our fiscal year 1996 budget we also proposed, again, as part of the President's plan of following up with our budget, to help the States assume the 404 program. Hopefully, beginning by 1998, to have that in place, if nothing else, to help us achieve our budget targets.
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    Mr. BOEHLERT. I'm going to assume that's with a lot of strings and a lot of restrictions from on high?

    Mr. ZIRSCHKY. We hope to work with them to make it an effective program that they want to assume. I don't think States will want to assume it with a lot of strings, but we also want to make sure that good decisions are made.

    On the homebuilders question, if I might?

    Mr. BOEHLERT. Sure.

    Mr. ZIRSCHKY. The people that own land, most of them the only land they own is where their home is. We hope that some of the new guidelines, the one that we signed today, and a new general permit we hope to come out with in the next 2 weeks will help that situation. We hope that a general permit for half-acre or less house lots—those are the kind of permits that get done in 16 days. We think that will remove a big burden for people wanting to build a home.

    For those who have an existing home or an existing farm, we hope to—we have new guidelines that will let them do more if they have up to 2 acres or if they want to expand a small business. So we think we will address most of the concerns raised by the homeowners, the National Homebuilders Association.

    Mr. BOEHLERT. Have you had a chance to consult with them yet?
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    Mr. ZIRSCHKY. I personally have not.

    Mr. BOEHLERT. Mr. Perciasepe?

    Mr. PERCIASEPE. The gentleman who testified here today I spent two and a half hours with yesterday consulting—the homebuilders representative.

    Mr. BOEHLERT. And the outcome of that? How would you characterize the parting, if you will, as you shook hands?

    Mr. PERCIASEPE. It was an ongoing process that we have with our different stake-holders, and this is a group of homebuilders that we meet with periodically to review where we stand with our President's plan and to get new ideas from them on where they see some tugs and pulls. We also included discussions on storm water and other programs. It wasn't just wetlands. But we spent a great deal of our time on wetlands.

    They actually have a process where they are going through and trying to develop some further recommendations on further improvements to the program, and so we continue to have dialogue.

    Mr. BOEHLERT. This is an ongoing process?

    Mr. PERCIASEPE. I would say that it is a—we have a good understanding of what we are both trying to do, but I wouldn't say we have total consensus of what needs to be done.
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    Mr. BOEHLERT. Sure. I understand that. And one wouldn't expect that.

    Mr. Borski?

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

    I guess one of the good things about being the last panel is you get to comment on what others have said already today. I'm not sure that's the way you would prefer it, but that's the way it is today, and I think sometimes that works better. So let me start with you, Doctor Zirschky, and just ask a general question. I believe you were here today. If not, I know your staff was—about the testimony we received this morning from Mr. Palermo, could you tell me the Corps' view of the Palermo case?

    Mr. ZIRSCHKY. From having listened, I think our views probably differ significantly. We processed his permit within 90 days of getting his completed application. He talked about affecting 28 or so acres. It was really only about five that we determined to be high-value wetlands that couldn't be built on. That was not only us, but the State of Louisiana concurred that those wetlands were of high value.

    Mr. BORSKI. And my friend and colleague from Louisiana who is very eloquent, and was today again, talked a little bit about the questions that the Corps asked that seemed totally out of line. How would you respond to that?

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    Mr. ZIRSCHKY. Sometimes we ask questions because we know that they will—everyone has a chance to comment on some of the kinds of permits. By asking those questions, we give the applicant a chance to put in the record his response to the kind of questions that will be asked during the comment period. It is his chance to present his information, to use our experience based on past comment periods to ask the kind of questions that the public will ask.

    Mr. BOEHLERT. Mr. Borski, may I just interject here?

    Mr. BORSKI. Yes.

    Mr. BOEHLERT. You said in the Palermo case, upon receipt of the completed application it only took 9 days. One of the complaints is that people submit an application in good faith, and you say, ''Well, wait a minute. We want more information,'' and then 2 weeks later it is more information, and 2 weeks later it is more information. So many months can pass before you have what you consider a complete application, but the constituent out there says, ''I've been involved in this thing for 6 months.'' So it is a little bit disingenuous to say just 9 days. It makes a case for your side, but would you concede there is another side to that?

    Mr. ZIRSCHKY. Yes. It was 90 days. That works sort of both ways.

    Mr. BOEHLERT. Ninety?

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    Mr. ZIRSCHKY. Ninety. Yes. When the applicant comes back in and has to get more information and more information, there are also those that the applicant comes in and then drops the project and never lets us know, so we use the time, for bookkeeping purposes, of when the application is complete. But you are correct—there are sometimes delays involved in getting that complete application.

    Mr. BOEHLERT. Thank you, Mr. Borski.

    Mr. BORSKI. Doctor Zirschky, I want to follow up on that.

    If Mr. Palermo had strong public interest, meaning economic reasons for his development, that would aid his case, wouldn't it?

    Mr. ZIRSCHKY. Yes, sir.

    Mr. BORSKI. Isn't that the purpose of the questions that are asked of him?

    Mr. ZIRSCHKY. We do ask some questions about: is the project needed? For example, it is the chance for the person to show economically that there is a justification for this project.

    Mr. BORSKI. Can you tell me what the environmentalists and the environmental community think about that review or preview, if you will?

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    Mr. ZIRSCHKY. I would prefer to let the environmental community sort of present their views.

    Mr. BORSKI. My understanding is that they are not very happy with that. Maybe that's a fair assessment.

    How about the testimony earlier by Mr. Goode and Ms. Albrecht? Let me just throw it to you and you can respond to it.

    Mr. ZIRSCHKY. The general comment we would have on that is yes, there are problems. If you wanted to describe our problem by the 81 2-year-old or older permits, you would have a very different view of it than if you describe it by the 40,000 people that walk through the door. You're familiar with that chart.

    During the 2 years that the 81 people have been waiting, we have processed over 80,000 to 100,000 people coming in the door. Overall, the program works well.

    If you were the manager of Sears, would you describe your performance by your profit or by the small percentage of people that walk out the door mad because some sales clerk was having a bad day and wasn't as nice as they could have been? Obviously, we have to address the sales clerk who isn't treating the public properly, but overall the program is working well, we think.

    Mr. BORSKI. As you know, under H.R. 961 EPA would be eliminated from the wetlands program. I know Mr. Perciasepe responded to this already, but I'm really more anxious about hearing from the rest of the agencies. What do you think about that provision?
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    Mr. ZIRSCHKY. Many of the new guidance that we are coming out with—the flexibility for the small homeowner or the expansion of housing lots—came about because of good coordination with EPA.

    We have a very good working relationship, I believe, with EPA. We work things out when there is a problem. The fact that there have been so few permits vetoed shows that we have a very good relationship, and it is getting better. We could not have gotten to that kind of success without help from EPA.

    Most of the time I think we do a very good job of balancing the environmental concerns, but nobody is perfect, and I guess I see EPA as a valuable sort of check and balance. Sometimes we will make mistakes and another set of eyes looking at it can help prevent a mistake.

    Mr. BORSKI. Does anybody else care to comment on that? You don't have to.

    Mr. DAVISON. I would just reiterate my earlier point, I guess, that I think that a strong team approach that you see here is a very cost-effective way of making sure that we address water quality and fish and wildlife impacts and minimize those and find ways whereby both the project can go forward and those impacts can be minimized. I think this is the most cost-effective way of ensuring that that's done.

    Mr. BORSKI. Mr. Davison, what would be the impact on your resources performing the advanced classification that would be required under the bill? Do you do the advanced classification of wetlands? Is that EPA?
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    Mr. ZIRSCHKY. That would be Fish and Wildlife and Agriculture.

    Mr. DAVISON. I'm not sure. It would obviously be quite costly. I have only looked at the national wetlands inventory to see that. I think more problematic from our standpoint is the actual process of trying to do that in some kind of abstract sense and deciding which wetlands or functions are of—putting in place a classification system that adequately protects wetlands values and functions. I think I would just agree with what Mr. Perciasepe had said previously, that really needs to be done within a watershed or on a case-by-case basis.

    I think the impacts on our resources would be tremendous. I don't know quite what the magnitude of those would be.

    Mr. PERCIASEPE. I would just add that we are continuing to work on methods to get better at this values judgment process and the functions of the wetlands. Again, the National Academy of Science we hope will provide something, but we are also working—the Corps of Engineers has a process in their Vicksburg facility where they are looking at techniques. When we are doing these advance identification projects, mostly on a watershed basis, there is not only Fish and Wildlife involvement, but we involve the State agencies and others, as well. So it is a multiple process to do that.

    Mr. BORSKI. Mr. Perciasepe, I also wanted to thank you for responding from the previous hearing for our request for your views, the Administration views on the bill before us.
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    Mr. Chairman, I'd ask that this be made part of the record at this point.

    Mr. BOEHLERT. Without objection.

    [The information follows:]

    [Insert here.]

    Mr. BOEHLERT. Doctor Zirschky, excuse me, but I can't—my eyes aren't quite as good as they used to be. The chart there, Corps of Engineers applications over 2 years old—the 202, is that July of some year?

    Mr. ZIRSCHKY. July 1994, sir.

    Mr. BOEHLERT. July 1994?

    Mr. ZIRSCHKY. Yes.

    Mr. BOEHLERT. And the 81 is?

    Mr. ZIRSCHKY. January 1995, just 6 months later.

    Mr. BOEHLERT. All of us know how to manipulate, and I'm not suggesting you manipulate, but is that a steady trend—the number that are 2 years or over in the pending status of going down? Or did you wisely select July 1994 for a purpose?
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    Mr. ZIRSCHKY. No, sir. We didn't pick. We did a data call in June that said we've got to fix this problem of old permits, and we started the effort in July. That's when we got the data in, and that's how many there were. We said we wanted to take a look 6 months later and see how many you had left.

    Mr. BOEHLERT. What happened in that 6 months? That's a rather dramatic drop. What changed?

    Mr. ZIRSCHKY. Two things. There were some that we went back to the applicant and said, ''Are you still interested in this process?'' To be honest with you, some of them said no. Others were. We got the people to actually focus on working with the applicant, sorting out the problems.

    Mr. BOEHLERT. How many of them said no? If they all said, ''To hell with it. I'm tired of it,'' that would make your charts look really impressive.

    Mr. ZIRSCHKY. I don't have the exact numbers with me, but I don't believe it was——

    Mr. BOEHLERT. A small number?

    Mr. ZIRSCHKY. Relatively.

    Mr. BOEHLERT. Is there a common thread that ties together the 81 that are 2 years or older?
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    Mr. ZIRSCHKY. Not that I know of. We are in the process now of sort of dissecting the data, which districts have this problem, why do they have that problem. We have a notebook that has the controversial permits. The major trend I have noticed so far is a lot of them seem to be in Louisiana.

    Mr. BOEHLERT. What?

    Mr. ZIRSCHKY. They seem to be in Louisiana.

    Mr. BOEHLERT. That's the problem area where you've got the most outstanding?

    Mr. ZIRSCHKY. That seems to be the controversial ones where most of the ones I have read—they have given me a case study on all of them, and——

    Mr. BOEHLERT. Then one could understand Mr. Hayes would be concerned about this. Those are his people he is trying to represent. If the Government isn't being responsive——

    Mr. ZIRSCHKY. In July the problem was primarily in the northwest part of the United States—Oregon, Washington, Alaska. Now it seems to have moved to the southeast. Let me get you the specific statistics for the record.

    Mr. BOEHLERT. What is the appeal process when a permit is turned down?
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    Mr. ZIRSCHKY. At present there isn't an appeal process within the Corps.

    Mr. BOEHLERT. That's the problem, isn't it?

    Mr. ZIRSCHKY. Yes, sir. We're working on an administrative appeal process now. What it looks like one might be denied, generally we get a request from the applicant to come and talk about it, and we try and work things out then. So we have a sort of before-denial appeal.

    Mr. BOEHLERT. Do you like the appeals process in H.R. 961? I kind of like it. It is from Mineta-Boehlert. Have you looked at it? Would you comment on it?

    Mr. ZIRSCHKY. Could I do that for the record, sir?

    Mr. BOEHLERT. Please.

    [Information to be supplied follows:]

    [Insert here.]

    Mr. BOEHLERT. Mr. Borski, anything more?

    Mr. BORSKI. No, sir.
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    Mr. BOEHLERT. We may have some subsequent questions that we'll submit in writing with a request that we get responses in writing.

    Let me do the same to you as I have done to the previous panel—apologize for the attendance here this afternoon. There are a lot of things going and people are off in several different directions. You'll be hearing from us.

    Thank you all very much.

    The next hearing will be on Thursday. Members of Congress will be testifying on regional issues in the Great Lakes initiative.

    And then on Saturday, for those of you who are so inclined to travel to beautiful upstate New York, in that magnificent city of Utica we will have a hearing dealing with the subject of nonpoint source pollution.

    [Whereupon, at 3:40 p.m. the subcommittee was recessed, to reconvene at 10:00 a.m. on Thursday, March 9, 1995.]

    [Insert here.]