care. the results are promising individual insurers, providers and medicaid programs are working to expand this model across the state's my goal is to continue to build on the pile wet to move new hampshire away from the inefficient fee-for-service model rich weave dockery word civilization to the model that rewards good care and saves us money. as we innovate with our health care system here in new hampshire, we must also consider the impact of reform and nationally. states like utah have adopted health insurance exchanges because they benefit businesses and benefit citizens. a well-designed health insurance exchange can make it easier for businesses to compete and to compare and obtain affordable health insurance. and i certainly don't think we want the federal government to decide in exchange for us here

in new hampshire. that is why i think we must look forward now with designing our own exchange for all the people and businesses and our great state. [applause] over the past eight years we've worked together to preserve acres of space to reduce mercury pollution to protect our clean water. we are building a new energy future with an energy efficient fund to help residents cut their energy costs and new standards the spurring renewable energy projects. now we have new plants under construction as well as a new

plant that will help create 400 construction jobs and contribute enough home grown energy to power about 70,000 homes. these were bipartisan efforts because new hampshire citizens have long recognized we have a responsibility to cherish and preserve our natural resources. i strongly believe that the new hampshire environmentally give to our children and two grandchildren should be just as good if not better than the one that was given to us. [applause] that is why i will stand firm

against bills that underlie our environment. one of the biggest issues facing our state and our environment is the proposal for northern past. now i support bringing more renewable power to our state. it's in our long-term interest to diversify the power sources, and i don't think we should dismiss out of hand the idea of hydropower coming from canada. but the proponents of the northern pass need to listen better. this project cannot happen without local support, and it should not happen with eminem domain. [applause]

as lawmakers we have responsibility to think of the long-term consequences of our actions. that is why i oppose expanded gambling. new hampshire has developed a brand that has led to our economic success. i do not believe that the monetary benefits of expanded gambling outweigh the risks that it poses to new hampshire quality-of-life on our existing businesses and workers and our economic future. that is why i will veto legislation allowing casinos here in new hampshire. [applause] i am proud that new hampshire is one of the safest states in the

nation. that is due in large part to the dedicated work of the members of several enforcement community and the smart and sensible law that we put in place. i support the right of our citizens to bear arms. we have had a long bipartisan tradition of reasonable laws the balance the rights of gun owners with the need of public safety. unfortunately, there is a ration of proposed legislation the would undermine that tradition from a bill repealing the gun licenses to a bill forcing colleges to allow guns in classrooms and dorms. we should always make public safety our highest priority. these bills are wrong for public safety and they are wrong for new hampshire. [applause]

new hampshire has a long and proud tradition of fighting for the rights of all of our people and the tradition of leaving people alone to pursue their own happiness to. as governor i intend to uphold that a century-old tradition and i will stand firm against any legislation that would strip any of our citizens of their civil rights. [applause]

finally, i would like to talk about how we deal with each other and the people we serve. if there is a harshness in the air and the tone and the nature of our communications and particularly within this building, that isn't healthy for our people and it's not healthy for our democracy. we can disagree without demonizing one another. vigorous debate is important, but our citizens expect us to behave with dignity and with respect. the expect us to look for common ground and common purpose. we can find inspiration and models that follow our people who showed us every day care to come together. peterson are role models of mine because they always put public service first. we lost walter this past year but his memory and his example

live on. dorothy and walter never let political defeat lead to bitterness. delivered let politics stand in the way of service and they always looked to find ways to bring unity. please join me in the thinking dorothy peterson who is with us today for her service. [applause] [applause] our citizens have shown us over and over again that when we

stand together we can win any battle. when the federal government threatened to close the neighbor shipyard workers, lawmakers, local businesses in the communities came together to fight to keep it open. it seems like we have everybody against us. the navy, the secretary of defense, the pentagon. but we have the facts, we have unity, and together we kept open the best shipyards in the country. [applause] we have with us today to of the workers who helped lead that fight, paul o'connor and j.j..

[applause] [applause] if and now there are plans for a new round of closures while we stand ready. [applause] we are not going to let them close our shipyard. this is not a partisan issue of this on a note that all of new hampshire will stand together. [applause]

so, j.j. and paul, let's get out the t-shirts, let's get ready to showcase our wonderful shipyard workers. let the federal government tried. we are going to win, we are going to win again, and we are going to win together. [applause] i believe the interest of our people, the interest that unite the people of our state or greater than those that divide us. i'm ready and eager to continue to work with you to make state government more efficient, to rebuild a war roads and bridges, to strengthen our economy and help get our people back to work. that is where i hope we will put

our focus during this coming year. if we work together in the great tradition of new hampshire, i believe we can find areas of common ground to build a stronger future for all of the citizens of our great state. thank you very much. [applause] [applause] is 35 minutes and is

courtesy of the tennessee public television. [applause] thank you. please have a seat. thank you so much. [applause] thank you. lt. governor ramsey, speaker harlow, speaker pro tem wallsten, tim ruffini, members of the 107th general assembly particularly mcnally since it is his birthday. [applause]

justices, constitutional officers, friends, guests, fellows and my favorite first lady ever. it's my response ability to night to report to you about the state of our state. as i do that i want to begin by telling you again how honored i am to serve as your governor. in a little over the years that i've been in office i've been reminded time and again about the incredible state we live in and the inspiring people who call tennessee home. i have hope for tennessee because i have confidence in tennessee whether it's visiting with families after the last spring's deadly tornadoes sitting down with teachers for breakfast or spending time with the garden men and women in iraq and afghanistan i've been struck by the fact that tennessee in from all walks of life are willing to give of themselves to create a better state for our children and grandchildren. [applause]

so, what is the state of our state? in many ways you're doing great. in fiscal response of the i am proud that working together we are carrying on that commitment to the taxpayers. we have new jobs last year. the unemployment rate is the lowest its been since 2008. all across the country tennessee is being recognized as a leader in educational reform. but yet, all of us realize we have issues to deal with, unemployment is still too high and we are consistently in the mid 40's when the states are ranked for educational achievement. i don't think any of us should be satisfied. so i stand here tonight and ask you is the current state of our state good enough? no, i think we can believe in better. we can believe in better for how

the state government serves tennessee to be we can believe in better when it comes to the education of our children and we can believe in a better when we talk about a stronger healthier economy for our state. [applause] where shall we start? i think we start by looking in the mirror. i think we start by reminding ourselves of our purpose as a state government. it's my conviction that we exist to provide services for citizens they can't purchase themselves. our job is to provide those services at the lowest possible price, the price that's the taxes we pay. at the end of the day i think that is what people their state government to do, provide the very best services for the lowest price and the government accountable and spend their tax dollars as carefully as they

spend their own but that's the problem isn't it? it's hard for folks to spend other people's money as carefully as they spend their own room. even worse it's easy to think the tax dollars are hours. it's here that it's best for all of us to remember what mark twain said about taxpayers' dollars. in government, tennessee expect us to talk about results. it's our responsibility to identify a problem, take politics out of the equation and find a solution. people are so frustrated with washington today because when problems are identified politics are always put into the equation and there never seems to be any effort to find a solution. even when we disagree, in tennessee become together to move forward. a quick check of some of our sister states and washington shows not everyone is blessed

with this common sense. here we do things differently. in tennessee we've been able to accomplish a lot in a short amount of time. last year we thought this on a limited number of important issues to make a meaningful difference and impact. we make significant reforms to make our legal system more predictable which will encourage employers to invest in the new employees. we inform the the laws to prioritize results for our children. we expanded charter schools brittany's for students and parents and made the lottery scholarship available to students for summer school which encouraged them to finish school more quickly and help universities use their campuses more efficiently year round. in 2011 there are more than 28,000 new tennessee jobs created in over $4 billion in capital investment. [applause] our jobs for tennessee plan is working. we continue to focus on the regionalism and existing

businesses and ki clusters that make no mistake that doesn't mean we are not taking our foot off the gas and pursuing new businesses for tennessee. i appreciate how well we've worked together on job creation. a good example is amazon. i'm proud we worked with amazon to expand the company's presence in the tennessee to include in addition to hamilton and bradley, willson and brother fer counties, too, creating thousands of jobs and through that process we were able to reach an agreement with the company to get to them and to us moving forward certainty. we need help in passing legislation this session to solidify that agreement. as i said earlier, our role in state government is to provide services that tennessee isn't able to get on its own. we build roads, we all for higher education options, guard prisoners come help families about children, care for the mentally ill, patrol highways, serve veterans, propose hundreds of other services.

to make sure we provide those services and customer focus and effective way. you know, whether it is in business, government or sports team with the best players wins. unfortunately in tennessee state government. the rules always allow us to go out and recruit great players after we are like a college football team that can't recruit who plays based on who's been on the team the longest, not necessarily the best players are. whether you share for the tigers, the would-be the memphis tennessee state variety, the sky hawks, the blue raiders, the commodores, the governors or the i don't think you would be very excited about the season if your team followed that plan. you heard me say in the past but it bares repeating to might. we have to change the way we do

government of limited state and federal dollars to work with they expect us to do more with less. to do that we must be able to recruit, retain and every word that best and brightest employees so we can get the type of service our citizens deserve. that's why i introduced the team act tennessee efficiency come accountability management act. in the next five years almost 40% of our state employees will become eligible for retirement. so we embark on the challenge to recruit the talent to serve in the state governments we face a hiring system that's broken. the resource commissioner rebecca hunter posted sessions across the state to hear from state employees. but a number of issues with recruiting, hiring, managing and retaining talent. the participants representing fred agencies and have different job titles and responsibilities, differing lengths of state

service and came from the executive service and civil service perspectives. what we heard from them is what you are hearing from me. our employment system is broken. let me be clear, this is not an indictment of our work force. i visited with employees and all of our 22 departments over the last year. i seen firsthand of many dedicated hard-working and impressive people. this is about an antiquated system that limits how we can hire and limits growth opportunities for outstanding current employees. nobody else high years this way in tennessee exit the executive branch of state government. they face these restrictions and business is certainly don't. every time a citizen in trucks with state government it should be a customer friendly experience with an impressive state employee. i get a lot of feedback from across the state of employees who go over and above the call of duty. for example, there is maria

stivers, she joined state government 2007 as a firefighter with the tennessee air national guard and now works in memphis. she voluntarily deployed twice as an air national guardsmen to iraq and kuwait. maria, thank you for being here tonight and your commitment to the state and the country. [applause] and there's johnny crosby a correction officer at the special needs facility in asheville. he was recently appointed to the department's first tactical rapid response team which handles emergency situations. officer calls be, thanks for being here this evening and for

the work that you do. [applause] there's also stanford. last september while making a routine traffic stop he was shot in the chest. thanks to his arm our ability to focus on his experience, his training in his bulletproof vest he survived. trooper stanford, we're grateful you are here tonight. thank you for putting yourself in harm's way to serve our state. thank you very much. [applause]

and finally i would like to introduce you to authority year employee of mental health. doris pruitt is a counselor of the western mental health institute. she's described as strong and compassionate with impeccable character and someone who approaches her work not as a job but as a colleague. thank you for supporting our most vulnerable citizens and for being here. [applause] the five of us were talking before the speech today and i said that they represented thousands of outstanding employees across the state in the department couldn't provide them here tonight but these are the kind of people that we want to make sure we are hiring as we look at the lean and efficient state government of the future. we all understand, we are

expected to do more with less and we need the best and the brightest to tackle complex issues for the people. another challenge of our employment system is the convoluted process of managing our work force. currently when the decision is made to eliminate the career service position, it's difficult to know the eventual outcome of that decision because of a complicated process called dumping. here's how what works. the commission makes the management decision that a particular position in davidson county is no longer needed. let's say that in plea he is in that position and has ten years of service. that employee is eligible to bump another employee he in a similar job maybe even neighboring willson county we only have nine years and 11 months of service. and that change can go on and on and on which is a disservice to our managers and our employees. never once is performance a part of the decision about who keeps their job.

no one can convince me that's the best way to manage our employees and serve our customers. frankly i believe it is just plain wrong. it's important to note our legislation preserves the streamlined appeals process for the state employees. the bill also includes the mediation program. we understand the value of employee is being hurt when they have differences with their managers. joining us tonight are all 22 of our commissioners. i'm very grateful for your hard work on behalf of the state of tennessee. i think it is worthy of mention in 22 of them coming from diverse backgrounds from having a wide variety of responsibility all 22 have said the most critical thing we can do to make state government operate more effectively is to address our unemployment system. well, last year we faced a budget, we face a tough budget when we had $1 billion less to work within the prior year. but you, the house and senate members in the chamber can

together with a irresponsible realistic approach and made the tough decisions the were necessary and passed the budget unanimously. we have good news this year. revenue collections continue to be encouraging. for 16 consecutive months we've seen total tax collections coming stronger and projected over the previous year. our challenge lies in the fact that although the growing revenue collections are only just recovering to levels of to the sums of money for the recession. our current budget also included $160 million in funding legislated to go away. the cost of the fund inflationary growth areas such as ten care, the basic education perham and employee benefits consumes a large portion of the revenue growth each year. our budget this year reflects our economic realities.

savings for the future and reductions sometimes painful to balance the budget. i am pleased to say that thanks to the hard work of our employees last year's expenses ended up nearly $20 million below budget which obviously means considerable savings for our taxpayers. [applause] our commissioners have been serious about working in each of their departments to identify areas where we can save money. that kind of responsible government allows us to fund our strategic priorities while keeping taxes low. well, compensation is a key issue in state government to no one's surprise just like everywhere else. last year i was pleased we could provide a 1.6% paced stevan please move on several years without a raise. i am proposing a 2.5% pay raise in this year's budget.

[applause] however, i also think we need to do a true salary survey comparing the state salary to those in the private market and those of the federal and local the from a salary. this budget includes the money to fund the survey and includes funding to be set aside as a first step towards addressing any major seller of the discrepancies that might otherwise as a result of the survey. [applause] budgets should be a reflection of your priority. this budget is no different. we are asking for continued support of the fast track and grant program in the amount of $70 million, some of which will be available in this budget year to provide incentives and a very fast paced global economy. we are also continuing our

commitment to the west tennessee site by including $25 million in this year's budget. [applause] this is the only site still left in the state inventory, and it's critical that we finish the infrastructure so it can be a prime location for major employers who are looking for a great place to locate. it's worthy of mention in while many states have cut funding for the k-12 education in the last several years due to the recession, tennessee hasn't done that. we are not only not getting the education budget, we are continuing to fund the cost increases for the vp. [applause] must be another priority for the state of tennessee. while college isn't for everyone, it must be for more tennesseeians in the future than it's been in the past. [applause]

with 21% of our population has a degree compared to the national average of 30% and over half of the new jobs being created over the next decade will require degrees encouraging more tennesseeans to aspire to higher education as one of our key roles as leaders of the state. for most of the last two decades, higher education has received less funding for the operating budget. that changes this year. [applause] in addition, we are increasing the amount of money available on the need based scholarships. we simply have to keep tuition increases in tennessee to a minimum so we can encourage more access for more students. [applause]

access is critical to a successful education program. let me speak plame the last several years we haven't been funding higher capital plans to the degrees necessary to meet the growing student demand. we need more space to train students in science, technology, engineering and math, critical subjects in which we must provide more trained graduates. this budget will finally provide the state funding for the long overdue science building at ntsu. [applause] the science laboratory at the university of tennessee box velte, the new patient diagnostic center of the university of tennessee health science in michigan as well as planting money for new buildings of the national steel community college, northeast state community college and the university of memphis and the university of tennessee

chattanooga. [applause] as many of you remember the budget two years ago included cuts to critical services as a result of the economic downturn. the state was able to believe those cuts by finding them with onetime federal money. however, 160 million of those cuts were slated to go into effect this year. it included many critical programs for the state programs like the coordinated school program, extended teacher contract, alcohol and abuse treatment programs, child care benefits, juvenile justice grants, diabetes prevention and matching dollars for the 401k programs for state employees. i'm proud to say this budget restores over $100 million of the cuts to protect vital services for our citizens. [applause]

finally, any good budget in tough times is a balance of strategic cuts and reinvestment leal making certain we are keeping taxes as low as possible. else prepares in to raise the level on the estate tax in tennessee. [applause] this year's budget would raise the exemption from $1 million to a million, $250,000. the goal of reaching the federal exemption level of the $5 million while i am governor. [applause] i am convinced our current estate tax is cheesing people and capital out of our state and it discourages people who don't live here from investing here. quite simply, the only way that new jobs created is when people

are willing to invest capital. in a time like this when the economy is still struggling to rebound and i'm going to do everything i can to encourage people to invest their capital in tennessee. we've done that by making our legal system more predictable, reviewing the state rules and regulations and focusing on strengthening our attractive business climate. likewise many of you have long expressed the desire to decrease the tax on groceries in tennessee. [applause] this budget proposes to do just that, taking the state portion of the attack from the 5.5% to 5% over the next three years we are also putting $50 million into the rainy day fund this year which brings up to

$356 million. while it's important to return tax payer dollars to the taxpayers every chance we get, we have all seen the importance of a healthy rainy day fund to pay for critical services during difficult times. i will continue to make it a priority to build the reserve steadily while i am in office. [applause] our budget also reflects the process that each department spent the last year going through the top to bottom review. you may remember at the outset of our administration asks each commissioner to evaluate his or her agency as if they were starting from scratch. if he were beginning state government all over again, would your department look the same? the work on these reviews was extensive. for example, children services sought input for more than 4,000

people including staff, shareholders and focus groups which resulted in 11,000 comments. the commissioner and deputy commissioner of human services cost more than 600 employees across all divisions. as a result, the departments have identified millions of dollars in savings from restructuring of their organization and we expect additional savings as implementation ochers. several departments found through the process the cost advantage to eliminating outside for example, looking at saving money by selling some full-time positions with state employees instead of using consultants in several areas. [applause] last year you may remember me talking about focusing on our driver's license centers. commissioner gibbons and his team have been a great job of standardized hours of operation across the state will the kiosks

in all of the divisions by summer a total of 40 kiosks to be rolled out soon. our final report on the process will be available of the end of february and out line which each department is in the process of doing or will be doing to implement their plans. we also applaud the top to bottom review process to the 200 plus boards and commissions and state governments by falsely reviewing their history, mystery and cost to make sure in 2012 they are fulfilling the purpose they were originally intended to when they were created. as a result we proposed several changes. we are recommending the tennessee regulatory authority to be changed from the full members and five part-time members of a full-time executive director. we believe the new structure will be more efficient and effective and attract highly qualified and experienced candidates. we are also recommending some executive directors of the agency's report directly to the

governor. for example, i believe that tennessee higher education commission should have a more direct tie to the governor's office. they function as a policy arms for higher education issues and like the policy chief for the cattle education reports to the governor it makes sense that higher education should have a similar structure. we are also recommending consolidating extreme agencies to limit overlapping functions. one of those proposals is also part of our public safety action plan. we propose moving parole oversight from the board of probation and parole to the department of corrections for the more seamless process. a national study shows that tennessee ranks fourth in the nation for four alleged crimes per capita. i'm proud 11 different state agencies have joined together to create a plan that i believe will change the trend. they are working to implement a

multi-year strategy that includes restriction drug abuse legislation aimed at improving the current database to make it easier to identify abusers. tennessee ranks second in the country behind only west virginia and prescription drug use. tennesseeans averaged 27 prescriptions every year versus the national leverage of nearly 12. in the emergency room visits for the prescription drug overdoses now equal the number of the visits illegal and over-the-counter drugs in tennessee. we are also recommending placing more non-violent drug addicts into the drug court treatment programs. this will better serve those offenders by focusing specifically on their addiction. [applause] it also saves the state money because the department of corrections pays $35 a day for the care of an offender and drug

court and $65 per day for the same person to be in prison. we are proposing the sentences for certain gang-related crimes. tougher sentences for gun possession for those with the felony convictions and calling for mandatory incarceration time for the peak domestic violent offenders. [applause] too many times repeat offenders aren't facing any consequences under the current law. in 2010 domestic violence offenses made up more than half of all reported crimes against tennessee and according to an annual study by the violent policy center, the rate of women killed by men in tennessee is the fifth highest in the nation. keeping our citizens safe is a fundamental responsibility of state government. the public safety also plays a significant role in assuring

that tennessee continues to be an attractive place for businesses to locate and grow. many of us in the chamber spent a lot of time focused on job growth in tennessee this past year. i travelled across the state of visiting with employees and business leaders, hosted a group of the capitol and the governor's residence, called on companies outside of tennessee for in-depth discussion about the strength and weaknesses as a place to locate jobs. after hundreds of conversations with businesses, large and small, companies the located here and those that we wish would locate here i am convinced of this. tennessee can continue with anyone when it comes to attracting jobs. [applause] the work environment, quality-of-life tax burden and committed workers and is a great place to do business.

there's one consistent white -- problem on here, there's the concern about the death and birth of employees with specific skills. if we are going to be a state that attracts companies to locate here and grow here, a state that keeps its best and brightest graduates here with good paying high quality jobs, there is nothing more important that we can do to focus on education. when a plant manager in jackson hires workers from kentucky and a chattanooga manufacturer imports workers from georgia because they say they can't find tennessee graduates with strong enough skills and mouth and science that is unacceptable. those are our jobs, for our graduates and we have to get them that. we have to believe in better. [applause] we have to believe in better for our children. as we all know there's been a

lot discussion over the past year about the politics of education and accusations have gone back and forth and fingers have been planted about who cares about students and teachers. tonight i ask all of us to set those aside and focus on the things we all know to be true. first the world is changing and we must raise expectations for students, teachers, administrators, parents and ourselves. second, after decades of lagging behind the country when it comes to education results for, tennessee is on the right path to education. we got on that path through historic bipartisan commitment that led to tennessee leading the race in the funding and commitment to raising standards with the new core curriculum and the institutions of higher education to focus on the edge graduating students to complete

college program. we are doing this hard work because we all believe in better for our students. i'm highly confident that tennessee will be one of the first states to receive a waiver from the federal government's no child left behind a wall. under the outdated federal rules, tens of thousands of hard-working teachers have been going to work everyday often leaving their students to sycophant improvement only to be told that the schools were failures. that's wrong. and with this waiver we can build a tennessee accountability system that measures growth and improvement and gives every school a chance to succeed by getting better each year. [applause] virtually every state wants a waiver from no child left behind. but make no mistake, we expect tennessee will be one of the first states to receive this waiver because we are already

taking on the hard work of education reform. we must continue to build on our momentum to make our schools better. we can't put off until tomorrow what we should be doing today using data to measure student performance. and i believe if we are willing to evaluate 10-year-olds, which we have been doing since we started sending home report cards, then there isn't one good reason that adults shouldn't be evaluated, too and there isn't one good reason to wait. it's important of course we keep working to make our evaluation process better. the state collaborative on reforming education will be spending the year talking to teachers and principals statewide to evaluate our evaluation system and after gathering and analyzing the information, we know there may be changes that need to be made. but we cannot slow up the tremendous progress this state has made in recent years. there's too much at stake for our kids and for our economy. you know, there's something deeply concerning that's changing in the country right

now. today, 70% of americans would say that their lives and economic prospects have been better than their parents. but only 33% of us believe that there will be true for our children. the american dream is at stake. when people asked who they attribute the blame to, the answer is not big business, it's not unions, it's not educators, the answer is government. the truth is americans haven't lost faith in americans they've lost faith in those who lead. they don't need it to be like washington. they can be better for tennessee. [applause] all of us ran for election and we were to be here because we wanted to make a difference. i think we have a chance to do that in tennessee, to move tennessee for word.

i think tennessee can be a place we are about results and not about rhetoric triet so here are my final promises to you. first, i promise to be relentless when it comes to providing the very best service to our taxpayers for the lowest price they deserve it to be the second on the issue or policy, our administration will always work to get the right answer, not just hour own answer. [applause] so many people today are working hard but they are worried about their future and our country's future. we await to them to get it right. let's not waste this chance to get it right for tennesseeans for today, for next year and many years to come. as i stand before you this evening i challenge all of us to believe in better. if the elected leaders of this great state it's what

tennesseeans expect from us and that's what we owe to them. working together we are going to achieve a better tennessee. thank you very, very much. [applause] of wcev in

richmond. [applause] >> thank you. thank you. you've obviously come back well rested.

mr. speaker, mr. president, justices of the supreme court of virginia, judges of the state corporation commission, ladies and gentlemen of the general assembly, my fellow virginians, good evening. it's both my duty and my privilege to join you tonight on the set of steven spielberg's b5 epic feature film. [laughter] for the annual state of the commonwealth address. i hope it's all right with everyone because i invited some of your neighbors to night. the first lady and four of the mcdonald children and my new son-in-law are with us here in the gallery. [applause] now i think this is why i believe, 21st commonwealth only

the first i've delivered and set very special night when all three branches of the government are gathered in a building designed by thomas jefferson from which are centered lady as promoting liberty and opportunity. i want to congratulate all of you newly elected men and women to the general assembly and also the new leaders elected in each today. thank you for your service to the people of virginia and i also want to thank all of the families and spouses of the newly elected members because they are in it with you as well. i also want to commend the members of the virginia senate, particularly the members of the democratic party for passion yet statesmanlike organizational matters in the senate today. over the past years we have shown that while we heal from diverse regions we align with different political parties and

subscriber to the competing philosophies we can still come together to make progress on the issues most important to the 8 million people we serve. ladies and gentlemen, that has been and must remain the virginia way because it was. this session we must remember that while seating charts and committee assignments have changed, the virginia way he cannot. so to the members of the majority tonight i say to you don't be arrogant, don't overreach. to the members of the minority party, i say don't be angry, don't obstruct. and to all of us in putting the exit of branch i say let's be civil and let's be productive. we are blessed to live in a commonwealth with an unemployment rate that is the lowest in all of the southeast. we are the best state in american business. we have the nation's best public

university system. and over these years we have weathered the economic storms better than most states. and i think we owe the success to a number of factors. we kept taxes low, regulation and litigation to a minimum and we made prudent and wise investments and economic development in education, in transportation and in our people. but perhaps more importantly, we have found a way daily to rise above the partisan politics to solve problems and get results. our representative democracy stood the test of time as the most effective and the most fair form of government on all the planets. america was born on the bank of the james river. from virginia came four of the first five presidents, eight and all, the author of the

declaration of independence, the father of the constitution. governor patrick henry, first governor of virginia attended the cornerstone of the building in 1785, and yet, 205 years later, the same capital welcomed douglas wilder as governor of virginia, the first african-american governor in the country. the early leaders who guided this young republican group into the mature global power that we are today came from here in virginia. now it is our collective duty to lead the great republican to a prosperous future and i say to you i think that virginians are ready. every day they show their exceptional character. a few of those exceptional virginians have joined us tonight.

.. we pledge to you that his great sacrifice will never be forgotten. [applause] [applause]

[applause] at almost that exact same time of the tragedy in blacksburg, another military veteran turned law enforcement officer was facing a similar situation in carolina county. after detaining a suspect found along i-95, senior virginia state trooper michael hammer had placed the suspect in the car when suddenly the individual grab for his weapon, forcing it to discharge into chipper hammer's upper leg. bleeding previously in the midst of a violent struggle he was able to reach another weapon that he kept nearby and was able

to subdue the suspect. trooper hamer was washed to marry washington university hospital where hospital where he underwent emergency surgery. tonight, mike hamer is still recovering from his injuries but he and his wife natalie are here with us in the gallery and i want to say trooper hamer europe or avery and your commitment to the safety of the citizens of virginia will not be forgotten. [applause] [applause] [applause]

[applause] that heroism demonstrated by the officer krause and trooper hamer is why i'm supporting a review of a necessary amendment to the virginia line of duty act so that all qualified first responders and their families receive all the key statutory benefits in their time of need and not later, and i ask you to support that this session. [applause] that same spirit of service has also been displayed by virginians on the battlefield in foreign lands. since september 11, 2001 nearly 14,000 members of the virginia national guard have left their families and their jobs to

defend freedom. over 230 virginians have given their lives to the service of their country and the global war on terror. on december 18, the last convoy of american soldiers left iraq, ending nearly nine years of struggle in iraq. eight days before that, i had the honor of welcoming tom stanton over 200 members of the virginia army national guard from the second assault battalion 224th aviation regiment who had been serving in iraq since april. with us here tonight are the battalion executive officer major carl engstrom and his wife, joy. we also have members of that unit a father and a son who were deployed together. first sergeant calvin franklin joined by his wife michelle and first-class franklin. gentlemen, thank you for you deep commitment to freedom.

[applause] [applause] [applause] [applause] the brave men and women who volunteer for the virginia national guard are a great -- and so that is why propose we provide in-state tuition regardless of how long they have lived in virginia. [applause]

we have more veterans than any other state in with your help this session we will continue to make this the veteran friendly state in america. you sir virginia, we serve you. we serve all virginians well when we run a wise and frugal government defend individual liberties and the rule of law and care more about enacting good policy then make me a good quote. simply put, our people want results, not rhetoric. they want solutions and not sound bites. over the past few i say that is how we have governed together working across party lines last year we put the most new funding into transportation in a generation and i want to thank the leadership of speaker bill howe and the senate. as a result over $4 billion in new funding was provided in our six year plan to support rail projects across the state. the funding is supported hundreds of projects in the advertisement and awarded nearly

$2 billion in new funding in contracts in 2011. it has also made possible public/private partnerships like the midtown downtown tunnel in hampton roads, the coalfields expressway, southwest virginia, wrote 58 between hillsdale and stewart and the i-95 hov hot lanes in northern virginia. we have also created a complex awarding 100,000 more degrees in the next 15 years to young people and important disciplines. i want to thank delegates kirk coxon rosalynn danson senator tommy norman. because of their work colleges were able to submit 5800 additional students this last fall, well done. [applause] together we have also created nearly $100 million in new economic development for job

creation. companies like bechtel, amazon, green mountain coffee roasters, albany industries and amazon are all coming to virginia. i want to tank the lieutenant governor bill mullen our chief officer senators jeff colgate and jerry kilgore for their leadership in making this happen. over 56,000 more jobs have been created in virginia since our first full month in office. [applause] overseas visitors are coming here at a record pace, $321 million in 2011 and i was on hand this past year to open up trade offices in agricultural offices in new delhi, in mumbai, in shanghai and in london to be able to sell virginia products around the world and create more good jobs here in. trade missions are getting

results. just last month alone one ship left chesapeake virginia and deliver $25 million worth of soybeans to china. two weeks ago another vessel began the same journey with another $25 billion with the soybeans to china. from brunswick to beijing that is how we are going to grow our economy in this global marketplace. i want to thank delegate steve landers for his leadership in getting those new funds to grow our agricultural exports and create new jobs. working together we have eliminated $6 billion in budget shortfalls not by raising taxes but by reforming government and reducing spending. we turned to massive budget deficits into nearly a billion dollars in surpluses during these last 10 years. [applause]

i would say these are all collected bipartisan accomplishments. virginia is charging a fiscally responsible course to a brighter future. but ladies and gentlemen it is no time for victory laps. our global economy still in certain. the actions of the federal government are still very unpredictable. van employment the employment rate is still unacceptable. this is not a status quo period and the lives of americans in virginia and so i suggest to you but should not be the status quo session for the virginia general assembly. dallas and i can't ask you to fix every problem in the short time that we have together this session but i can ask you to fix some big ones. we must do more to score job creation. we must reform our pension system now. so that it will be there for the hundreds of thousands of virginians depending on it. we must make our k-12 education system more accountable and innovative now so all of our students get a world-class

education. we must complete higher education reform and investment now so that more students can get access and afford college. we must improve our transportation maintenance system now so that citizens can get to their jobs and to their families, and we must pass a fiscally responsible structurally balanced budget on time that provides the stability and liquidity that we need to navigate the in certain years that lie ahead. [applause] and i want to applaud the work of delegate putney and senators donned in the leaders of both parties for proposing much-needed reforms to the budget conference committee process to facilitate timely and reduce drama. thank you, well done.

[applause] isiais you'd better work together starts in finding work for 260,000 virginians who are currently unemployed. it is the most threatening issue facing our state. virginians need good paying private-sector jobs of the session i'm asking you to invest another $38 million to the targeted programs that spur job creation. i propose initiatives for tourism, for film, for agriculture and forestry products for technology, modeling and simulation, cybersecurity, international markets, workforce development, advanced manufacturing and life sciences. why? because these are proven job and revenue generators for our state. i'm also proposing a new investor tax credit to provide working capital for small businesses that create 70% of all the new jobs in america.

and foreign extension of time during which that major business facility job tax credit can be taken. states are competing not just against other states but against other countries around the world for jobs. when deciding where to move our where to expand businesses tell me that they are first and foremost looking for a well-educated and well framed workforce. i think we owe every student the opportunity to be career or college-ready when they graduate from high school. [applause] my dad always told me you need a good education to get a good job and that was right so i propose an increase for funding for k-12 education of $438 billion to strengthen the system for teachers and school employees but also to increase dollars going to the classroom to hire

more teachers in science technology and math, to improve financial literacy and strengthen virginia's diploma requirements. we will also provide new funding for the successful communities and school programs as well as funding so that all tenth-graders can take the s.a.t. test early and the start of a new health science categories and our commonwealth. however well we put more funding into the k-12 budget more funding alone does not in and of itself guarantee greater results. over the past decade total funding for public education in the state has grown 41% while student enrollment has only increased 6%. this budget will provide significant new funding but it will also take more accountability, more choice, more rigor and more innovation in our school system. i think providing flexibility is important. i have suggested it's time to reveal the state mandate the

school divisions begin their school term after labor day unless they receive a waiver. already 77 of 130 have these waivers so the exceptions authority become the rule. i think local communities can best balance the teaching in calendar days against the important concerns of the tourism and business leaders because they know their situations in their localities far better than we know it here. our teachers are well-educated and motivated professionals that deserve to be treated as such. just like workers in most every other job reviewed annually and are therefore able to more accurately be promoted and rewarded for their success, so too should teachers. i'm asking that we remove the continuing contract status of teachers and principals and provide in its place an annual contract. this will allow us to implement

an improved evaluation system that really works and give principals a new and much needed tool to manage their schools. along with a merit pay pilot program that you helped me find last year we will provide more incentives and more accountability to our education system so we truly can attract the very best and the very brightest to teach our young people. and i know you agree we have got great teachers in virginia. people like stacy, fourth-grade teacher at john adams elementary school in alexandria who was recently named the national history teacher of the year. i happen to think my sister nancy who teaches in amherst county is a pretty gosh darned good teacher and your house majority leader is a pretty good schoolteacher. we all know teachers. [laughter] mr. speaker i don't thing would be can vote in the middle of my

speech can we? we on the teachers who deserve to be better recognized for the invaluable role they play in the development and the learning of our young people. so we will also fund policies to ensure that all young people can read efficiently by third grade so that they are ready to become lifelong learners. social promotions are not acceptable. when we pass a student who cannot read well and is not ready for the ninth grade we have failed them. our public education system has also embraced multiple learning venues and opportunities. i agree with president obama that we need to expand charter schools in our country. i'm proposing we make our laws stronger by requiring a portion of the state and local share of the as a few funding to follow the students and approves charter schools and make it easier for new charters to be approved and for them to acquire property to get up and running. i also think we need a fair funding formula for the

fast-growing virtual schools sector so i propose a portion of the state and local share of the s&p funding should also follow the students in this area and we will implement new regulations for a crediting virtual schools and their teachers to make it easier for this technology to be deployed. now we should also increase the choices for low income students and their parents. so i'm asking you this session to provide a tax credit for companies that contribute to an educational scholarship fund to help more of our young people get their education of their choice. [applause] [applause] i want to thank delegates walters dosh and mark for their leadership the session on that

issue. here is the bottom line. the child's education should not be determined by their geography or their zip code but by their god-given abilities and their hard work. -- should be the formula for success. we will also propose innovations to promote greater school enrollment in high school and community college so those motivated students that want to get a headstart on a their college education can do so. the goal of all these proposals are very simple and that is when you walk across the stage at her high school graduation and you you receive that diploma you should be able to be career ready or college-ready. when our students are ready for college, colleges should be ready for them. the american dream becomes more attainable when there is more access and lower cost to a college degree. our sweeping legislation you passed unanimously last year i

believe set a visionary blueprint for reform and reinvestment in our colleges and our universities. but now we have to put our money where our policies are. i'm asking you this session to invest over $200 million in new funding for our colleges and our universities. additionally i am promoting a dynamic new funding model for higher education to replace the of old adequacy formulas. achieving the goals that we approved last year. institutions will be rewarded based on increasing the number of degrees particularly in the stem fields, improving graduation rates, expanding practical research and other fat terse. it will also require colleges to be more efficient and more accountable themselves by reprioritizing 5% of their current general fund dollars by

2014 to meet those same key policy goals that we approved last year in the statute such as year-round use of facilities and greater use of technology to leverage more programs and more courses for our students. these actions all do an important thing and that is that they cement the direct between higher education and job creation and they begin to reverse this unacceptable trend over the last decade during which the average college tuition in virginia doubled. and i say to you the parents and students in virginia can no longer afford those days of doubling tuitions are over. [applause] ladies and gentlemen are county

can't grow -- last year's transportation construction funding bill was significant but a lot more has to be done. we all know that increased fuel efficiency in the use of alternative fuels have caused tax revenues to decline, a trend that is likely to stay with us. our growing deficit in transportation maintenance is the result and it must be addressed now. transportation is a core function of government so we have got to treat it like one. so i'm asking you to increase transportation's share of the year and unassigned surplus balance to 75% and also to dedicate the first 1% of our economic growth over 5% to transportation. now, to seriously address the transportation deficit i am also requesting that you increase the

dedicated transportation allocation of the state sales tax from .5% 2.75% over the next eight years. the introduce budget starts that process to show it can be done by increasing that percentage to .55% over the biennium and that will generate $110 million in the transportation maintenance dollars. let me put it into perspective for you. that amount is one-eighth of 1% of an 85 billion-dollar budget, the largest in the history of virginia. so i say to you if we can't find the resolve to use one-eighth of 1% of the budget for additional transportation maintenance funding than we are not serious about maintaining our transportation infrastructure. i will also propose other reforms the virginia department of transportation reduced timelines for construction and

motorcades to make our road projects go smoother. we will reform and promote new expansions in the port of virginia, great asset for us that can be a global leader in international shipping and a growing commercial -- on the eastern shore. i think it is time we take gone the woefully underfunded state retirement system. as of the june valuation of funding status of the system was 70% were state employees in 66% for teachers. bay said that those numbers will go to 63 and 61% respectively in 2013. that is unsustainable. so, i do not want to pass this problem onto another governor and you should not want to pass this problem onto another general assembly.

so i say to you our responsibility is clear and that is why i've proposed have proposed the largest employer contribution to the virginia retirement system in history recommending $2.21 million in total funding to the systems for state employees and teachers including $876 million from the state's general fund. this more than doubles the amount of money we put into our retirement system during the last budget. the state is now going to do its part. localities will have to fund their share of the teachers retirement. teachers are local employees and local governments have the duty to fund their share of them. doing the right thing at the state level is not an unfunded mandate. the rates have been set and the bills are now due. this cash infusion by itself

will not fix the problem of the retirement system. jointure and stable retirement system in the decades ahead state employees who do a phenomenal job for us every day will be asked to accept changes and adjustments to the crs plan. in the days ahead i i will announce a number of very specific reform proposals to ensure long-term solvency of the system and i look forward to working with you to enact some of those. i also want to continue the success we found in bringing private sector management to state government. you remember in 2010 working together we enacted a 3% performance bonus for a state employees contingent upon them achieving a specific amount of savings and their agencies by the end of the year. it worked. their great efforts save taxpayers over $90 million after the bonus payment was made. that is good government.

so i'm asking you to do that again this year. i've propose another 3%, one-time bonus for state employees in december of 2012 contention again upon a specific amount of savings being achieved and employees individually meeting specific performance measures on their performance review. this will again report good performance. last summer we all collectively held our breath as we watch the debt limit fight in washington. today we see the year and the international unrest. i will say to you that uncertainty for us. while we cannot control what congress or what europe do, we must prepare as well as possible here in virginia for the future changes that are certain to

come. that is what i to do in this budget. the budget i propose is not raised taxes but forces the government to set priorities and live within its means and plan for the future, something i wish our federal government would also do. [applause] i am asking you this year to put $50 million into a newly created federal action contingency trust fund. this fund will help us to handle and pecks from a necessary and likely future federal spending cuts, and to take prudent acts and to diversify our common me that depends on spending. i'm proposing we enhance our cash reserves by doubling the rainy day fund to $600 million by the end of 2014.

we will also eliminate the accelerated sales tax policy this session for 96% of all merchants by allocating $50 million towards that purpose in fiscal year 2012. like gold is to get rid of that unfair policy before i leave office, but not before. together these budget strategies provide structural balance that reduce unfunded liabilities and they invest in job creation and transportation and in higher education. these ideas were well received last friday when i travel to new york with the money committee, leaders to be with all three bond rating agencies. we continue building a commonwealth of opportunity. i will also ask for partnership in critical areas of government. this budget provides $5 million for additional land conservation

to continue our bipartisan effort to conserve more open space to protect the environment. we have far to been able to add in the last two years 100,000 acres of land to the protected status category during these two years. we are also making progress in restoring that great jewel that is the chesapeake bay. striped bass production was at an all-time record in 2011. the blue crab population is at its second-highest level since 1997 and even the eagle populations are often in the bay watershed. the recent budget surplus has allowed us to contribute over $85 million to improving water quality. this brings more business to virginia farmers and is a significant contribution to the water quality improvement fund. providing for public safety is one of the top duties of government at every level.

that people aren't safe and secure in their neighborhoods, businesses won't relocate here and our communities will not prosper. thanks to some of the smart policies would have all had over the years and the selfless service of first responders and law-enforcement officers like derek krause and mike crime in recidivism are actually down in virginia. but you know we still face challenges. repeat drug dealers are a major perpetual cause of crime so this year i'm proposing tough new laws to put away repeat drug dealers or longer periods of time and i put the money in the budget to make sure we can accomplish that. because of these dealers are behind bars they can't sell drugs to our kids and they can't steal from their neighbors, and they can't contribute to the tragic cycle of addiction that has stolen the lives of too many people.

we can break that cycle when we combine tough sentences with other effective policies. said this year in the budget i provided localities with a mechanism for obtaining authorization for new drug courts. as long as they meet certain requirements that provide data necessary to evaluate their success. for those released from prison who have learned from their mistakes and want to be productive citizens, we will provide them greater positive opportunities for change and more effective prison re-entry policies. we are a remarkable nation. over 90% of all offenders that we incarcerate get out of resin. they are going to be back on the street and we don't want them to go back to prison. what we want is more good citizens and fewer victims. this year's budget maintains critical 599 funding for local

law enforcement, fully funds our sheriff's and adds 40 new swats in our future trooper schools. a more secure society is also a more prosperous society. we are going to step up our effort to make virginia the energy capital of the east coast. that starts with pursuing and all of the above red white and blue approach to energy using all of our own natural resources here in virginia. more domestic energy production equals more american job creation and greater energy security, something we should all support. an important part of our nations -- is right here in virginia. just 50 miles off the shore are oil and gas deposits that can be accessed in a responsible manner. you all remember we passed legislation in 2010 by strong bipartisan support approving offshore drilling. america needs the energy and

virginians need the jobs. [applause] [applause] so i'm urging the obama administration to end the delays and that now to include virginia in the 2012 to 2017 at her continental shelf plan. if they want, then congress will act and i want to thanks senators warner, senators webb and congressman goodlatte for leading that fight in our nation's capital. must also continue to demand that the federal government stopped the overreach and over regulation of our important job creating coal and natural gas industries here in virginia. [applause]

[applause] and congress must also act to revitalize the nuclear industry which capital is in lynchburg virginia by setting reasonable policy on the storage and disposal of fuel rods after 30 years of inaction. we will also pursue the development of alternative sources of energy like wind and solar and biomass as long as they are cost competitive for our consumers. in october we had an exciting announcement and that is the nation's first facility for the certification of large offshore and land-based electricity reduce by a wind turbines will be developed on the eastern shore. wind energy is a developing industry in virginia is now the forefront of its so that's why i've included $5000 in the fy13 budget for research and development to accelerate the

private development of the virginia wind energy area. we are also evaluating some meritorious private sector proposals to move the commonwealth substantial vehicle fleet to alternative domestic fuel so we can reduce our reliance on foreign sources of oil. making the virginia the energy capital will create more jobs and revenue for our citizens. we must also continue to reform state government and make it more efficient and more effective or as jefferson said more frugal. over the past decade state spending has grown 23% faster than the rate of growth so we have room for improvement in managing our finances. i'm proposing that we close the prisons, cut and effective programs abolish unnecessary

agencies, and memberships in how site organization to make our government work smarter. [applause] and this is the session ladies and gentlemen where we should honor our founders by putting into our state constitution a strong property rights amendment that protects the private property of every virginian. we will continue our recent work to dramatically improve funding for individuals with intellectual and developmental disabilities. [applause] last year together we invested $60 million in new funds to strengthen the capacity.

i've already authorize 60 new home and community-based for individuals to transition from institutions back to the community and i want to thank delegates kirk scott and chris jones for their leadership. in this budget i'm recommending we put another $30 million into mental health funding because we must transition more individuals from institutions and community-based care. is the right thing to do for them and for their families. [applause] medicaid funding has improved 1600% over the last 29 years. during the 2011 session substantial ways to improve the quality and cost effectiveness and integrity of the medicaid anymore and acted.

we are now moving forward with the statewide adoption of caring coordination. this will allow state government to better manage or medicaid expenditures while ensuring virginians receive a high-quality health care that they need. as you arrived here tonight ladies and gentlemen and at a particular suitable time in the life of virginians and the life of our nation, the world around us is changing with incredible speed. gone are the old regimes of iraq, libya, egypt and afghanistan. china and india are on the rise. facebook and twitter replaced text which replaced e-mail which replaced phonecalls. iphones rule products and procedures are obsolete quickly.

even one term governor's, but not too quickly. in the midst of all this uncertainty and structural change i think virginians want government to provide some measure of stability by funding and providing its core services well. they want good jobs. they want safe neighborhoods and successful schools. they won a modern transportation per -- system and an equal opportunity to achieve the american dream. we are a nation that rightly guarantees equal access and opportunity. we don't guarantee outcomes. that is why we are free people. that is the kind of government we have brought two centuries ago. it is made united states the most prosperous nation in the world has ever known and we are we are blessed to be americans. in the mid-1840s and fifties,

during the irish potato famine millions of my irish heritage fled to ireland -- from ireland to the united states. having little idea what to expect on the other side of the ocean but hoping for survival. in the galleys of the ships that sail from those ports in england and ireland to places like dublin and cork, the errors government posted bulletins with the heading quote in the united states wealth is not idolized but there is no degradation connected with labor. and industrious youth may follow any occupation without being looked down upon and he may rationally expect to raise himself in the world by his labor. over 100 years ago that same promise of america led my

grandfather to come from ireland to ellis island and then to massachusetts in search of his own dreams and in pursuit of his own opportunities. back to to me typifies the america and the virginia we all believe and. that is the america that we are blessed to call home. over the next 60 days our job is to enact policies that will ensure that this remains a a robust commonwealth of opportunity for any man and any woman of any race and any creed from any beginning and anyplace will always have the opportunity to raise themselves up in the world by their god-given talent and their labor. [applause] [applause]

so working together i know that we will do that. thank you all for your work together this session and may god continue to shower his blessings on this great commonwealth of virginia. thank you. [applause] [applause] >> in january the white house blocked a permit for the company transcanada to build the keystone xl oil pipeline from alberta to the southern coast of the u.s. a house panel looks at the pipeline project next. the senate is in at 10 a.m. eastern for speeches and legislative business. harry reid hopes to bring a surface transportation bill to

the floor for debate today. live senate coverage here on c-span2. >> i don't her fundamental disagreement in the philosophy that if people, that enhances their lives and that enhances the ability for them to get a job down the road. i don't hear a disagreement with that. i hear an excuse as to why not to do it but rather the fundamental philosophy of trying to re- arm people with an education so that when they go into the workforce they have an additional tool. >> to link the social interest proposal program designed and or 70 pushers functioning to provide financial support when you loose your job, to a

requirement that you have to be in this training, i think first of all it won't work from the practical considerations. but second i don't think it contradicts the notion that you're suggesting. i agree with the more education you have today, the better off you'll be in this economy. >> watch the rest of this meeting online at the c-span video library. archived and searchable at c-span.org/video library. >> next hearing on the obama administration's decision to deny a permit for construction of the keystone xl oil pipeline. that would've carried oil from canada to the u.s. kentucky congressman ed whitfield chairs this hearing which is two hours and 15 minutes.

[inaudible conversations] .. >> and at this time i'd like to recognize myself for five minutes for the purpose of

making an opening statement. like many people, i was quite disappointed when the president decided the keystone pipeline was not in the national interest, and the reason that he gave for making that decision was that there was not enough time to collect and review information regarding the route through nebraska. we all are very much aware, however, that the application for the permit was filed in september of 2008. that was almost three and a half years ago. as a matter of fact, as far back as october 2010 in a speech at the commonwealth club of san francisco, secretary of state hillary clinton in response to a question said that she was inclined to approve the permit for the keystone pipeline based on the information she had. i also want the public to know, and i'm sure they're or very much aware of this also, that

five major labor unions support it and still support the building of this pipeline. in an article entitled "labor civil war over keystone xl," the author reported some of president barack obama's labor supporters are fuming over his decision. unions representing construction workers that would directly benefit from building the pipeline, as he said in his article, feel stabbed in the back by unions that joined environmental groups to kill the project. labor's international union in north america general president terry o'sullivan said the decision was so repulsive and disgusting that he was going to pull his union out of the blue-green alliance a coalition of environmental groups and labor unions that represented nearly all of the groups that signed a statement, a joint statement supporting the president.

mr. sullivan said unions and environmental groups that have no equity in this work have kicked our members in the teeth, and be anger is an understatement as to how we feel be about it. we will not sit at the table with people that destroy our members' livelihood. the labor unions supporting the project issued a particularly forceful statement condemning the decision as politics at its worst. and mr. sean sweeney who was the director of global labor institute at cornell university who did a study about the jobs that this would create made it very clear when he said that this decision was really about the president being reelected. the president's re-election is at stake, and he said there is certainly more at stake here than a simple pipeline. in closing, i would simply like to quote from an editorial in "the chicago tribune." keystone should be approved. this is a good project, it will

give us energy and give us jobs. you want stimulus? this is it. this is a $7 billion project to be done with private dollars, taxpayer dollars will not be used. president obama made a decision that we think is the wrong decision. and with that i would -- does anyone seek recognition for a minute and 48 seconds? no, i'll recognize you later. all right. >> sure, mr. chairman. >> i'll yield my time to you -- >> i thank the gentleman for yielding, i appreciate his comments. i was just reviewing the testimony by, i believe it's mr. poole from the bureau of land management, and i just find it interesting that how much our government rules and regulations come into play here for so little land. he says in his testimony the total permanent right-of-way of blm-managed public lands for the

keystone project would be approximately 50 feet wide and comprise a total of approximately 270 acres. now, let that sink -- i mean, you think about how minor a role the federal government's playing in terms of this land, and yet they've issued their approval, it's my understanding. final biological assessment has been issued and shows no jeopardy under the endangered species act. federal government, blm at least, 270 acres, 50 feet wide. we've got a horrible unemployment problem. it's getting a little better, but, you know, 8.3%'s nothing to brag about. you've got a private sector investment that could create thousands of jobs and a new property tax base payments to local governments throughout that region, and i just think it's time to get this done. so i yield back. >> thank you, mr. walden. at this time i recognize the

gentleman from illinois, mr. rush, for five minutes. >> i want to thank you, mr. chairman, for holding this important hearing. the minority side requested in order to hear from some of the important take holders who were not invited to participate in last week's hearing and to shed light onto some of the ramifications of the legislation before us, h.r. 3548. mr. chairman, this bill is simply another bite at the apple in the majority's attempt to back door the obama administration and green light a project that has not yet been fully vetted. what would amount to being an application of the federal government's oversight responsibilities. in fact, why don't we call this bill for what it really is?

instead of the north american energy assets act, this bill should be renamed the republican s in congress -- [inaudible] through transcanada act. this bill does not make sense legally or technically because it shifts the responsibility for approval of the cross-border pipeline from the state department to ferc, an agency which has no experience in siting this type of binational project specifically or oil pipelines generally. this bill does not make sense, frankly, and it does not make sense morally. as we heard from the assistant secretary of state carrie ann jones last week, she of the

bureau of oceans and international environment and scientific affairs, the recommendation to deny the permit was made simply because there was not sufficient time for the agency to complete its due diligence and perform its legal oversight responsibility mainly due to the fact that currently there's not even a proposed route for the state department to review. it would have been an act of gross negligence and recklessness for the obama administration to approve a permit for a pipeline that will cut through the heart of the country when the policymakers in those very states that are mostly affected like nebraska haven't even identified the most

appropriate route for the pipeline to go through. while the language the republicans passed in their initial effort to force the administration to come up with a decision was in 60 days of enactment of the middle class payroll tax extension was ill considered and irresponsible, i must say the language in this new bill was transferring a decision to a different and completely inexperienced agency, ferc, and also required the commission to make a decision within 30 days or the project would be automatically approved and even more irrational and more irresponsible. as assistant secretary of state carrie ann a jones stated at last week's hearing regarding her agency's recommendation, and

i quote: that decision was based on the fact that the exact route of the pipeline has yet to be identified in critical areas. as a result, there are unresolved concerns for a full range of issues including energy security, foreign policy, economic effect, health, safety and environmental impacts among other considerations. ms. jones went on to say the legislation raises serious questions about legal authorities, questions of continuing -- [inaudible] and all of the state and local and environmental and land use management authority over the pipeline and, mr. chairman, i want to emphasize this, it overrides foreign policy and national security considerations

indicated by cross-border permit which are properly -- [inaudible] by the state department. mr. chairman, with such dire warnings against this bill, i think we owe it to the american public to fully explain the consequences of this legislation to insure that the public interest is protected. and with that, i yield back the balance of my time. >> thank you, mr. rush. at this time i'd like to recognize the gentleman from texas, mr. barton, for the purpose of making an opening statement, fife minutes. >> i'm not -- i won't use that much time, mr. chairman, but thank you. um, this is a continuation hearing. everything that can be said about keystone has been said. but sometimes it needs to be repeated. this is a extremely important project for our nation's future. just in the last month or so we've had a number of

announcements that refineries in the united states in the northeast and in the virgin islands are going to be closed, several in pennsylvania, one in the virgin islands, i think one in ohio. altogether they're taking about a million barrels of refinery production off the books. and while keystone pipeline is not building a new refinery, it is bringing additional crude oil to the gulf coast where we still have refinery capacity. that crude oil will be used to be refined into products that then can be transshipped up into the midwest and the northeast. if you shut down refineries in the midwest and offshore that serve that market and if you don't build keystone, that's a double whammy. the absolute certainty is that prices will go up, shortages

exist, our economy will suffer. on the other hand, if we build the keystone pipeline, we're going to have additional crude coming into the united states, approximately 800,000 barrels a day. it doesn't offset in totality the closure of these other refinery facilities, but it will alleviate them. and as my good friend from oregon, mr. walden, has just pointed out, to have to go through the bureaucratic red tape that this project has gone through for the reasons it's been subjected to it just doesn't seem to make good sense in any way, any way. so, mr. chairman, i look forward to the hearing. there's another hearing downstairs on the chemical facilities act, so i'll be shuffling back and forth. but i do appreciate you holding the hearing, and i, obviously o, appreciate being allowed to speak. >> mr. barton? >> i'd like to yield the balance of my time to mr. terry of

nebraska who's been a strong voice for this project. >> thank you, mr. chairman emeritus. just clarify a few points. the state department issued three statements over the summer that they would have all of the information and they were doing all of the due diligence to have a decision made by the end of 2011. and we took them at their word for that, and it turned out to be not true. i think one of the key points here that's been missed in the state department's testimony in particular in the basis for their decision is that they're using nebraska as the excuse to deny the permit. and the reality is in the legislation that the president signed specifically exempting nebraska out of this, this was going forward on the other parts of the pipeline and the other states. it carved out a time that, where

a trigger that would review the nebraska portion, the 30 or 40 mile that is the pipeline would be moved based upon when the governor certified that it was ready. so i'm amazed at why that hasn't been brought out. now, i'm glad that the corps of engineers is here today because they do play a vital point, and their testimony raises a valid point that we had already vetted and had planned to change, and that's we want to make it clear that what the legislation does is remove the presidential permission part and gives it to the agency, the federal agency that actually has experience in pipelines. we thought that was a rational approach with this bill. so i want to let the corps know that we aren't usurping, and we will change the language of issuing permits of any project that crosses a waterway under your jurisdiction.

so we knew there were other permits that they would have to file and receive once the presidential authorization was made. um, i am disappointed that we invited the corps of engineers and the blm to our hearing last week, and they denied or refused to come, but yet when henry waxman asks to testify in opposition, you're here loaded for bear. so that concerns me. one last point, my six seconds, i think the message that the president's denial of this permit sent the world is that the far left of the environmental community is now in charge of our energy and foreign policy. i yield back. >> this time i'd recognize the gentleman from california, mr. waxman, for five minutes for the purpose of opening statement. >> mr. chairman, today we're holding a legislative hearing on a bill to mandate approval of

transcanada's tar sands pipeline keystone xl. this tar sands pipeline is hugely controversial, and for good reason. the american people will bear the risks and big oil will reap the rewards. with this pipeline we get more carbon pollution, more dangerous oil spills, land seizures by a foreign country and higher oil prices in the midwest. big oil gets the ability to extract more profits from the midwest, a conduit for exporting tar sands products to china and the green light to exploit the tar sands at maximum speed regardless of the consequences. president obama listen today differing view -- listened to differing views of american citizens and made a responsible decision. he would not approve the pipeline through the ecologically-fragile sand hills area of nebraska, but the state

department would consider an alternative route. nebraska is taking the time to find a route that is acceptable, and the president is making sure that he has all the information he needs to make the right decision. this bill takes the opposite approach. it gives the pipeline an unprecedented regulatory earmark. it directs the federal energy regulatory commission, directs them to approve the pipeline even though we don't yet know what route it will take through the state of nebraska. it exempts the pipeline from the requirements to obtain permits from the corps of engineers before crossing rivers and wetlands. it takes away the department of interior's authority to protect sensitive public lands. for a year i've been asking a simple question; who benefits from this extraordinary congressional intervention in

the regulatory process? last year reuters reported that coke industries -- koch industries would be one of the big industries from this earmark, and there's evidence to support this. we know that koch is one of the large crude oil exporters in canada, we know it owns an oil terminal in hardesty, canada, where a pipeline would begin. and we know it has a refinery in texas near where the pipeline is going to end. last may i contacted koch to inquire about the nature of its interest in the pipeline, and koch responded that despite this evidence to the contrary, it had no financial interest in whether the pipeline was built orbit. and -- or not. and i accepted that answer. but then i learned that koch had told the canadian government that the company had a, quote, direct and substantial interest, end quote, in the pipeline. i want to know why koch would

tell the u.s. congress one thing and the canadian government the exact opposite. so i asked chairman upton and chairman whitfield to invite koch industries to testify today. well, they refused, and koch refused to appear without an invitation from the chairman. so we are left with unanswered questions. why is koch industries being placed in a witness protection program? what does the company have to hide? and why does the company get special treatment while the american people get left in the dark? i also asked the chairman to invite the operator of the pipeline, transcanada. members on our side want to ask transcanada reasonable questions like what route it plans to follow in nebraska. we also want to know about these claims of jobs. the state department testified that we would get 5-6,000

temporary jobs if this pipeline is approved. these jobs would be around for two years. transcanada said it's going to be 20,000 jobs over 100,000, and where did they get the number 100,000? well, that's looking at the lifetime of the pipeline for 100 years. this is the republican jobs bill. 20,000 jobs, they say. maybe 100,000 jobs. yet the state department did an analysis, and they're saying 5-6,000 jobs for two years. i regret that koch and transcanada are not here today, and i ask the chairman to refrain from moving this bill until they are available to testify. i'm glad we have excellent witnesses here today who are going to give us their views. the department, two departments that are going to be excluded from giving their usual review of the project. that might change, i'm pleased to hear. and two gentlemen who have

special insight at what this project will mean. thank you, mr. chairman, for the seven seconds beyond the time, and i yield back whatever time i have left. >> thank you, mr. waxman. today we have two panels of witnesses, and on the first panel if you, those of you on the first panel would come forward, that's ms. margaret gaffney who's chief regulatory for u.s. army corps of engineers and mr. mike poole who's depp te director of the pure low of land management, u.s. department of the interior. we appreciate both of you being here with us this morning. and as you know, we're going to ask each of you to give a five-minute opening statement, and at the end of that time then questions will be asked. i might also point out that west virginia been told that there will be five or six votes on the house floor somewhere around 11:00 or so. but we're going to proceed as long as we can and then we'll vote, and then we'll come back.

so thank you all for being with us this morning. at this time, ms. gaffney-smith, i'd like to recognize you for five minutes for the purpose of an opening statement, and be sure and turn your microphone on. and i guess that little box there on the table, a red light will come on when the five minutes is up. so you're now recognized. >> thank you, sir. chairman whitfield and members of the committee, i am meg gaffney-smith, chief of the regulatory program for the u.s. army corps of engineers. thank you for the opportunity to discuss the corps' regulatory authority under section 404 of the clean water act and section 10 of the rivers and harbors act realitied to you -- related to utility line projects and to discuss our involvement in the proposed keystone xl pipeline. section 10 of the rivers and harbors act requires authorization from the corps for the construction of any structure such as the keystone pipeline in, under or over any navigable water of the u.s.

section 404 of the clean water act requires authorization from the corps for the discharge of dredged or fill material into waters of the united states. utility line projects may require 404 permits for temporary fills such as access roadways, storage and work areas as well as temporary or permanent impacts associated with grading, bank stabilization or the crossing it. itself. when discharges of dredged or fill material are associated with activities of a similar nature and are expected to cause no more than minimal effects individually or cumulatively, they may be authorized by a general permit. activities that do not meet the criteria for a general permit are typically processed through the corps' individual standard permit procedures. when implementing the corps regulatory program, the corps is neither an opponent or a proponent of any specific project. our responsibility is to make fair, objective and timely decisions that protect the aquatic environment and are not contrary to the public interest.

the authority to make the final decisions on permit applications rests with our 38 district commanders. nationwide permit 12 is a general permit promulgated under section 404e of the clean water act that may be used to authorize utility line construction. the permit authorizes the discharge of dredged and/or fill material in association with temporary or permanent activities related to the construction, repair, maintenance and removal of utility lines provided the activity does not result in the loss of greater than one-half acre of waters including wetlands for a single and complete project. under nationwide permit 12, there are seven notification requirements, and if any one of these are triggered, a project proponent must submit a preconstruction notification request to the appropriate corps district office before they begin work in waters of the united states. other statutes impact the ability of the corps to authorize activities under a nationwide permit. in accordance with the

nationwide permit rules and the end dangered species act, no activity may be authorized that would be likely to jeopardize the continued existence of threatened or endangered species or destroy or adversely modify the critical habitat of such species. in addition, no activity may be authorized by a nationwide permit until the requirements of section 106 of the national historic preservation act have been fulfilled. further, the corps nationwide permits do not obviate the need to obtain other federal, state or local permits, approvals or authorizations that are required by law. in september and october 2011, transcanada submitted preconstruction notifications to our corps districts in galveston, fort worth and tulsa and requested that in association with the keystone xl pipeline be verified under nationwide permit 12. in november and december, each of the three districts made decisions to exercise their discretionary authority and

suspended nationwide permit 12 for all work or discharges associated with the keystone xl pipeline application. these decisions were made because of concerns identified by the department of state that could not be addressed until a final decision was made on the pending presidential permit application. the president has since determined that based on the state department's view that 60 days is an insufficient period to obtain and assess the necessary information that the keystone xl pipeline project as presented and analyzed at that time would not serve the national interest. should circumstances change in the future, our districts will process any future requests that are submitted for department of the army permits in accordance with the appropriate procedures based on our statutory authorities and implementing regulations. if h.r. 3548 is enacted, only the federal energy regulatory commission and not the corps would be responsible for issuing any permit required in conjunction with construction,

operation and maintenance of the pipeline. at present only the corps has a statutory mandate to review projects like keystone xl for the permit under the provisions of section 10 of the live is the and harbors act and section 404 of the clean water act. however, none of these statutory reviews would be allowed for this project under the language in section 4a of this bill, and no corps permit would be required. i appreciate the opportunity to be here today, and i would be happy to answer any questions you may have. >> thank you very much, ms. gaffney-smith. mr. poole, you're now recognized for five minutes for the purposes of making an opening statement. >> thank you, mr. chairman. and thank you for inviting the department of interior to this hearing on h.r. 3548, the north american energy access act. the legislation directs the federal energy regulatory commission to approve the keystone xl pipeline project. the department has concerns with several provisions of the legislation. the proposed $7 billion pipeline project would spend more than

1700 miles between hardesty, alberta, canada, and multiple destinations in oklahoma and texas. under executive order 1337, all proposed oil pipeline projects that cross u.s. borders require a presidential permit, including a determination that the proposed cross-border pipeline is in the national interest. the state department reviews applications for a presidential permit and consults with eight other agencies including the department of severe your in its -- interior in its review. state received an application from transcanada keystone pipeline in september of 2008. the proposed 1700-mile pipeline crosses through eastern montana for 228 miles and includes approximately 42 miles of scattered parcels of federal land managed by the blm. the blm was a cooperating agency with the state department as was the u.s. fish and wildlife service and the national park service in the preparation of an environmental impact statement to address the effects of the

proposed pipeline construction and operation activities. the blm identified pipeline routes across federal lands in montana that would minimize environmental impacts of pipeline construction. the final eis was issued on august 26, 2011. in addition, under the mineral leasing act, the blm is authorized to issue rights of ways across federal lands. filed applications with the blm in 2008. the keystone project would include a permanent 50-foot right-of-way along the scattered 42 miles in montana and comprise a total of 270 acres. applications were also filed for temporary use permits and for electrical transmission lines on public lands in montana to supply power to the proposed pumping stations. temporary rights-of-ways for construction purposes were comprised of a few hundred additional acres dispersed on blm46 managed tracts of lands.

these permit or applications have not been withdrawn, but processing is on hold. the north american energy access act appears to make the federal energy regulatory commission the sole federal agency responsible for the project. the bill would also give the commission sole authority to permit or construction, operation and maintenance for the pipeline and related facilities. the legislation's not clear on how the pipeline construction, operation and maintenance would be carried out on federal lands and what role, if any, the blm would have with regard to spills on federal lands from the pipeline. this departure from current law would also preclude the blm from covering rents and cost recovery related to the pipeline and rights-of-way on federal lands. thank you for the opportunity to testify before the subcommittee, i am pleased to answer any questions. >> mr. poole, thank you very much. at this time i'll recognize myself for five minutes of questions. there has been a lot of discussion on the keystone

pipeline about the koch brothers. and the koch brothers have indicated that they have no financial, direct financial interest in this pipeline. and for that reason we've never really called them as a witness, and i might say that we know that the burlington northern santa fe railroad has direct routes right into canada and alberta and that if pipeline is not built, maybe some of that oil will move by rail into the u.s. and, of course, the owner of that railroad is warren buffett, berkshire hathaway. we have not made any effort to call warren buffett to testify in this hearing because even though his company might benefit if pipeline is not built, we do not think he has a direct financial interest in it. and i believe in my view, do not view warren buffett and the koch brothers any different on this

situation. is so i simply wanted to mention that. i would also say that the state department when it issued its final environmental impact statement in august of 2011 actually made the comment that it would be better to build this pipeline than to not build the pipeline. if you were looking at these two options, it would be better to build it than not to build it. and so other pipeline projects requiring a presidential permit usually take 18-24 months to review and approve. keystone is now in its 40th month. so when these additional delays appear to be mounting early in 2011, the u.s. house passed bipartisan legislation with 47 democrats voting yes that simply instructed president obama to make a final decision one way or

the other on the presidential permit by november 1, 2011. at the time the white house stated the legislation was unnecessary because the state department would be making a decision by the end of 2011. but as president obama's campaign began to warm up for president, the president's political advisers realized that the environmental groups would be quite upset if president said yes to this pipeline. on the other hand, the labor unions were going to be quite upset -- at least five or six of them -- if president said no to the pipeline. so at that time the president instead of making a decision said that he would wait until after the election to make a decision. so from our perspective this really was nothing but a political decision. and since we've had 40 month of

detailed study and analysis on this, we felt like that there was no reason to delay anymore because we do need to be less dependent upon foreign oil. we can bring in this oil from our friendly neighbor to the north, canada. and we can create jobs as well. so i wanted to just make that comment about the koch brothers the -- and the fact that i don't see they're in much of a different position than warren buffett is except on different sides of the issue, perhaps. and i'd yield back the balance of my time and, mr. rush, i'll recognize you for five minutes for questions. >> mr. chairman, i would suggest based on your view that maybe you should invite warren buffett and the koch brothers here. [inaudible] >> that would be. we'd get a lot of -- [inaudible] >> right. right. i want to ask mr. poole

regarding the bureau of land management's current role in the permitting process, how was -- you hit on it, but i want you to expound on this. how will this effect the role of your agency? >> pardon me? >> how will this bill effect the role of your agency? >> um, it does raise concerns. the blm has a long history of issuing rights-of-ways in the leasing act, approximately 32,000. we have experience, we have the practitioners in the field that are familiar with the right-of-way program and the importance of working through nepa and taking into account any cultural and biological concerns. so, and we've got that experience, we've dealt with pipelines many times in the past, so the bill, the way it's worded, seems to confer all of

our responsibility under the mineral leasing act to ferc. and some of the accelerated time frames in the bill, um, it begs the question whether or not there's any additional consultation requirements under section 106 of the national archaeological protection act or any additional consultations may be required through the fish and wildlife service that that's possible. i think the other thing that i think is very important is that blm has established relationships in the west. of we have many offices geographically in the west, we are accustomed to working with county, local governments, state governments. we work with our federal counterparts as well. we've been in this process for three years as it relates to our right-of-way, the right-of-way application montana. so we have an already-established relationship with our federal and state entities as we work through, you know, this particular project and future projects. and i think that helps insure

ourselves with the involvement of our federal agencies that we're fulfilling, you know, our congressional mandates. >> does -- excuse me. as far as you're concerned, does ferc have the same vast footprint in the west to make some of the decisions? >> well, i know from a jurisdictional ownership standpoint, they do not. they are a regulatory entity. you know, when it comes to transcontinental natural gas lewin, ferc usually -- line, ferc usually assumes that lead. and when they're in that role, we are a cooperating agency. but it's important to point out, you know, the more recent example being the ruby pipeline in the west, they had the lead, but all our other mandates regarding cross-public lands or

jurisdictions, that was administered under the authorized mineral leasing act, and all other mandates were required as well. >> ms. gaffney-smith, the army corps of engineers have a role in the implementing process, and -- [inaudible] so your responsibilities and some of your normal activities regarding this matter. would you care to expound more on how this will effect your role? >> our interpretation and understanding of the bill as it's currently proposed would eliminate any opportunity for the corps of engineers to process any applications related to section 404 of the clean water act or section 10 of the lives and harbors act. so we would have under the current language within the bill, we would have no authority to regulate the activities and waters that are under our jurisdiction under those two laws. >> so this is -- [inaudible] your traditional

responsibilities and the power and authority and the experience that army corps of engineers have built up over centuries? >> yes. it would remove all our authority and remove any existing experience that we could lend to the review of the proposal. >> all right. can either of you tell the committee of the provision on this bill which agency or agencies would then be responsible for enforcing the terms on the environmental impact statement? >> from the corps of engineers' perspective, it looks like the entire responsibility would be provided to the federal energy regulatory commission. >> do you agree, mr. pool? >> that's the way the bill comes across to us as well. it's a transfer of authority that we currently have at blm in terms of, you know, issuing isse rights-of-ways of the leasing act, and that would be conferred to ferc. i think it's also important to point out that in terms of, um,

you know, blm's rights-of-way program, that these are cost-reimbursable programs. so the work we perform, the studies that may be necessary depending on where any pipeline may be run across public land, industry provides a cost-reimbursable account. so that account under this bill would pretty much, you know, we would not have it anymore. we would be out of the picture. >> thank you, mr. chairman. >> at this time i'll recognize the gentleman from oklahoma, mr. sullivan, for five minutes. >> thank you, chairman whitfield. during his tate of the union address, president obama turned his back on the keystone pipeline. he actually rejected the advice of his own jobs council who recommended an all-in approach to energy policy that included expediting energy projects like pipelines. like many americans, i was surprised at the primary reason the president stated for his denial saying congress forced this decision with an arbitrary deadline. if excuses were barrels of oil,

this administration would have filled our strategic petroleum reserves several times over. the truth of the matter is the administration had three years to reach a decision on keystone xl but failed to do so. if more than 1,100 days is not enough time, then exactly how much time do you need to secure our energy future, mr. president? this begs the question of just who is in control of our nation's energy agenda? time and time again we hear about president obama's commitment to american-made energy that creates jobs and reduces our dependence on foreign oil. yet he rejects a no-brainer like keystone xl. the truth is he made a calculated political decision to reject it to keep his anti-jobs environmental base happy in an election year. by rejecting the pipeline, president obama turned his back on american jobs. what logical reason could there be to say no to 20,000 new

private sector jobs and potentially 100,000 indirect jobs while our nation's unemployment rate remains above 3%? -- 8%? it is in both our economic and national security interests to use the oil and gas reserves right here in our own backyard. mr. president, why not embrace, embrace -- why not embrace bolstering our energy supply with a stable source of oil from canada and north dakota instead of politically tumultuous opec nations? unlike the trillion dollar failed stimulus law, the keystone project is privately funded and does not cost the taxpayers one dime. the keystone xl pipeline is a game changer for energy security. the pipeline, when fully complete, would transport nearly 1.3 million barrels of oil per day from alberta and north dakota to refineries in the midwest and gulf coast. i believe this is in our national interest to move forward with this pipeline, and

the state department's three-year delay is considering -- in considering this pipeline is a national travesty. three years into the obama's presidency, he has severely limited access to both on and offshore oil and gas reserves, pushed the most expensive environmental regulatory agenda in history and sent a half billion dollars of taxpayer money to solyndra, a now-bankrupt solar company. the fact of the matter is that our country needs all the energy we can get to continue growing our economy. with gas prices expected to rise in the coming months, his decision to reject the keystone pipeline means that our energy security is now in the hands of china, iran and other peck nations. not a good choice. mr. chairman, the keystone pipeline is the right thing to do to create jobs and make our nation more energy secure, and i'd like to yield the balance of my time to congressman lee terry from nebraska. >> if gentleman doesn't mind, can i reject that since i only

have a minute 0 left? >> yes, you can. >> but i appreciate that opportunity. >> yes, sir. >> gentleman yields back his time. at this time, i'm going to recognize the gentleman from california, mr. waxman, for five minutes. >> mr. chairman, the topic that we're discussing is the keystone pipeline. but i must say the republicans are like keystone cops in the way thai handled -- thai handled this whole issue. they have been going way out on a limb to get this pipeline approved, even to the point where a tax cut for middle class americans and unemployment benefits and money for physicians was, a bill was held up to make sure that there was a provision to give special treatment to the keystone pipeline. but these brilliant people put in a provision that says the president has to decide the issue within a certain period of time. they forgot to tell him how he had to decide it, and the president said i want to get all the facts first, and i'm not

going to approve it in this time frame. so now they've come up with a bill. this is a remarkable bill. this bill says, and i wish people would read it, it says this -- the pipeline in this bill is the keystone xl pipeline, no question about it. and they are exempted from review except for 30 days. but if the ferc doesn't give them a permit in 30 days, then it will be deemed approved. they're not taking any chances now. and in addition, they say that the two other agencies and all the other agencies that might be involved in reviewing this bill are will no longer -- no longer have the power to review the bill. so we we have witnesses here frm two of the agencies that ordinarily would review the legislation -- not legislation, any application for something that would go over public lands,

over waterways. suddenly, they're out. they can't review it. so when we found out, when mr. terry found out that was the case, he just said to us for the first time this morning, oh, we're not going to do that. we're going to put them back in the bill. so the application has to preapprove the 30 days or it's approved. if they want to make a modification, they can ask for review for 30 days, but if it's not approve inside 30 days, it's approved. for this one project. now, we wanted to find out what interest the koch industries had. now, why did we want to find that out? well, the koch industries is one of the largest crude oil exporters in canada. the koch industries own the terminal in canada where the pipeline would begin. the koch industries has a refinery near where the pipeline would end. and the chairman said they, he'd take their word for it, they don't have any interest.

even though there's evidence to the contrary. but then he throws out a real herring, as no one better than a keystone cop could do. and his argument, oh, well, wait a minute, this is another guy who agrees with the democrats some of the time who owns a railroad, and they might put the coal, tar, sand on the railroad. so really what the democrats are doing is fronting for another industry. boy, does that make sense. you've got the crude oil other than with the pipeline and the refinery, and we should just take their word for it they have no interest. but we should then point the finger at warren buffett's company. and then what do they do? they say at hearings, well, we know what's going on. we're attributing the worst possible motives to the president of the unite. it's all pretty -- to the president of the united states. it's all political. well, that's quite a statement. how do they get into the president's head? what the president said is i want to get information before i

i approve it. and they say, aha, what is really going on is the president is trying to take care of the environmentalists, and he's going to annoy -- they've got it all written out. they could be on 24-hour news radio. they've figured it all out without getting more information. well, we have two witnesses right now, and before acting we should get some further information about this special interest bill. it directs the ferc to deal with the matter, but ms. gaffney-smith, under the section 404 of the clean water act, the u.s. army corps of engineers has a permitting process to assure that wetlands are protected from discharges of dredged or fill material. now, doesn't this bill take away jurisdiction of your agency over this pipeline? >> it appears to do so, yes. >> and, mr. pool, the, um, your agency has to do with wildlife. tell me what your agency would ordinarily review and whether

you have that ability to review it. >> congressman, all these type actions we review them for land use plans, that's the congressional mandate -- >> and are you, is that jurisdiction being taken away from you? >> it appears we would no longer apply those -- >> we used to have a party in this country called the know-nothings, and the people that are pushing this bill want us to know nothing about this pipeline except what the proponents want us to know. and if koch brothers are proponents and are going to benefit, i'd like to know about it, and the american people ought to know about it as well. my time has expired, and i hope we have another round. >> at this time i'll recognize the gentleman from oregon, mr. walden, for five minutes. >> well, i thank the gentleman very much. mr. pool, tell me again the agency you're with. >> bureau of land management. >> and tell me how many acres are at play that you've reviewed as part of the keystone pipeline review process. >> congressman, the majority of

that acreage is in montana -- >> yes, sir. >> about a little over 42-mile segment, and it comprises given the linear width, 50 feet, it comprises about 250 acres with an additional 900 acres that would be needed probably for staging during the construction phase. >> yeah. i was thinking, i was looking forward to hearing your testimony. i thought it was actually 270 acres is what your testimony -- the same, 52/70. and you've done the environmental work on that, right? the review process already? >> our segment was reviewed through the nepa process that was led by the state department. and the segment that we're associated with through our mandates was evaluated. and as a result of the final eis that came out in august, we didn't identify any major constraints toss that segment in terms of pipeline authorization. >> so you've done the full review, you've been through the eis, the seis, the final environmental impact statement,

and this was all about a 50-foot-wide swath that covers 278 -- now, the other poland that you talked about, did you say 900, roughly 900 acres? >> [inaudible] >> temporary, in and out? >> it is. it's, you know, temporary use permits or grants to facilitate staging during the construction phase. >> and then that would revert back -- >> it would. that's for a three-year period. >> okay. and then talk to me about any issues related to the work that your fine agency did on the biological opinions related to the endangered species act. did you find any, any threat to threatened or endangered species? >> i think the initial biological opinion that was provided indicated there would not likely be a jeopardy to the existence of threatened and endangered species. obviously, it was subsequently withdrawn, and, um -- >> but it was an feis as well,

right? i mean, it had gotten through the full -- >> that's correct. it's issued after the issuance of the feis. >> right. so your agency, your biologists have thoroughly reviewed the keystone part that would cross federal land over which you have jurisdiction -- >> that is correct. >> -- and found no, not -- no likely jeopardy of any threatened or endangered species, and you're talking about a total of 270 acres rough hi for the -- roughly for the full pipeline, correct? so the state department has all that -- >> yes, they do. >> on the public lands. >> we're a collaborator to the state department, one of many. >> right. >> that's the area that we're responsible for is it crosses public land. >> all right. >> i think we've got a sliver, a mile, mile and a half in south dakota, but the majority of that crossing on public land occurs in montana. >> all right. all right, i appreciate that. i think that's important for the record because we've heard a lot of spin-up rhetoric here, and i

just want to get to the facts. i went through some to have feis in the last hearing we had and, you know, the -- we hear about this jobs number. it gets batted all over, you know? i think we'd want private sector investment, and this is seven billion, i believe, in shovel-ready, private sector construction jobs. and there are estimates of 20,000. now, i think what mr. wax match referenced was, actually, only the construction jobs during the phase of the construction. but i know having been a small business owner for more than two decades that when you get involved in a big project, it's not -- i mean, we were just in the radio business, but, you know, if i bought a transmitter, somebody had to build that thing. and i had to hire an engineer to install it. and i had to go through a lot of other efforts. there were a lot of other indirect jobs associated, and i think that's maybe where the difference of opinion here is on the jobs. if you only look at just exactly the, you know, several thousands of jobs that'll be there for two years in an industry that's been

devastated over the last three years, i'd take whatever jobs we could. and if there's no environmental impact on the federal lands and doesn't appear there would be, i think we can make the change mr. terry recommended to deal with the issue that ms. gaffney-smith -- if we change this bill to allow you to continue to have your statutory authority, that wouldn't be a problem, would it? >> no. we'd evaluate all the crossings and the impacts under the current authority, statutory authorities -- >> but have you done that already? >> no, we haven't done it. we've only received preconstruction notifications for certain aspects of the pipeline. >> i see. my time's expired. thank you very much. >> i'd like to recognize the gentleman from texas, mr. gonzalez, for five minutes. >> thank you very much, mr. chairman. welcome to the witnesses. we had a witness from ferc, and the way i recall his testimony was, one, they weren't really

equipped to do it, two, the time hawaiian that's being imposed by this particular bill, 3548, was not realistic. and i believe what you proprovide and what you bring to the equation of building this pipeline safely is invaluable and essential, and i don't believe that this bill is the best method of accomplishing the bill being out of the keystone pipeline which i support. i just don't think this is the way to do it. my greater fear, and we're going to have some other witnesses that may address some other implications, and that is unrealistic expectations of what this pipeline is going to provide this country. i'm going to do this as briefly as i can. first of all, when it comes to price. fuel prices reduces economic growth at a very, very sensitive time in this country. high gas prices reduced economic growth in this country in 2012

by 0.5% when we know for total growth for the year we're looking at around 2%, so it was substantial. i do not believe that the keystone pipeline will reduce fuel prices, and that's what we're telling the american public. and we keep going -- i wish we had a hearing that would really explore the impact on price. because eventually it will be our constituents that will be dumbfounded when we complete the pipeline, and they're still paying an extraordinary amount of money for a gallon of gasoline. gasoline supplies are being exported to the highest bidder. i said this last week. leading all exports in this country was fuel last year. so it is a global market. that's what we're in competition with. and this is from tom kloza at oil price information service which he said, it is a world market and will go to the highest bidder. at a senate hearing, the

president of shell back in may of last year said, simply stated, oil is a global commodity, and oil companies are price takers, not price makers. that is the same lesson that is going to be imposed on refiners. it is a global market. so who owns all the oil that is coming and is going to be stored somewhere? well, that's really curious, and maybe we can understand global markets and how the prices are arrived at. this is a story in the "dallas morning news", 15th of may last year, some 70 % of contracts are now bought by financial speculators, largely big investment banks and hem funds who never -- hedge funds who never take control of the oil. they just flip the contract for a quick profit. only about 30% of oil contracts are bought by a purchaser that actually intends to use the oil such as an airline. that's according to the commodity futures trading

commission which regulates trade in those contracts. michael mcmasters, wall street investor, testified before congress repeatedly that speculators are pushing prices well beyond what the supply and the demand warrant. and then i want to end this with -- until the early 1990s the ratio of speculative trades to trades made by commercial users of oil was tilted heavily towards the users of oil. but from 1991 forward the big financial players such as goldman sachs and jpmorgan want exemptions that free them from limits on how much they could speculate in future markets. now, we've attempted to do something about that, but the majority party has fought us tooth and nail on this whether it's dodd-frank or anything else that addresses some sort of a regulatory scheme that will now allow the plan of futures and commodities to the detriment of

the american consumers. this is all part of it. but we seem to be ignoring a holistic approach. now, what really concerns me is we're going to have a witness that's going to tell us that this may not be the answer to national security. now, i think that it can be depending on how we use the raw product and the refined product that we derive from oil. but if, in fact, it is a global market, the only way you maintain that edge is somehow making sure that there's available, accessible and affordable supply in the united states. but if you have investors that are charged with the fiduciary duty of making a good profit for their investors and that is the american way and i have no problem with that, what do you do? do you keep it in the domestic market? or do you export it? so there's not just about the safety of the pipeline. i believe that i'd rather be dependent on mexico and canada than saudi arabia and venezuela.

i mean, there's no doubt about that. venezuela. but the problem we have is not a realistic approach, and i guess that's what really concerns me. and i'm hoping to return for the witnesses that are going to be touching on some of the subject matter that i just touched on. i appreciate your testimony today. i think you are invaluable to this whole equation of building a safe keystone pipeline. thank you, mr. chairman. >> at this time i'll recognize the gentleman, mr. terry. >> thank you. and i guess i'm one that likes to submit items for the record, so, mr. chairman, i ask unanimous consent that i may submit for the record a memorandum from the u.s. state department, mr. keith bennis dated june 22, 2011. and on the issue that my friend from st. louis -- san antonio, a little further south --

mentioned. it is on the record from the state department's review of this pipeline that eliminating transportation constraints from cushing to houston would not adversely effect midwest gasoline consumers. in fact, it goes on and says that it would help crude prices decline considering that the transportation is consistent, reliable and less expensive. let's keep in mind that what we're talking about is around 700,000 barrels initially going up to a million barrels that would completely offset the need for us to send tankers to venezuela and fill up with their heavy crude and ship it up here. um -- >> [inaudible] i might just say without objection -- >> thank you.

and i submit that. i'll put it up here. but it simply defies logic to me that when you have a transportation system that the state department even testified was safer, the safest means of transport, the most environmentally safe transport, that there'd be arguments that it would not add to our energy security. and then secondly on the jobs, you know, it befuddles most americans as polling has shown that this president denied the permit and that jobs that would be created if you look into the union hall at the, for the laborers or the iebw, there's people sitting on the bench waiting, have their names on a list to be called that when this starts, they go to work. right now in nebraska there's an engineering company that has

ceased doing work because of the denial of this permit on the nebraska route. um, and, yeah, it befuddles me and most of americans when my friends on the other side of the aisle say that, jeez, 6,000 direct jobs out on the pipeline is not enough for them. and by the way, it's only temporary. well, i don't know an infrastructure project that isn't temporary. so evidently, we're against all infrastructure now. it just, it befuddles me. why they would oppose it. now, ms. gaffney-smith, i appreciate your testimony here today and with the help of the state department you've made some valid points that we realized and have decided before this hearing today, even after last week that we needed to make sure that we are clear in the fact that the intent of this

bill was the presidential authority. needed to be moved away from the white house to an agency that had expertise in pipelines to make a decision on whether it's safety and soundness of a pipeline versus the politics that seem to have overwhelmed this. issue. now, with that, making that correction that recognizes that we aren't usurping the corpses of engineers' -- the corps of engineers' powers, we want you to make that review. do you have any objections to this legislation? >> i can't speak to legislation where i haven't seen the actual language. but it would be, it would be appropriate, i think, for us to look at that and see if it, in fact, puts us back. >> can i ask why, why when the

corpses of engineers testified last week -- [inaudible] >> your microphone. >> the light's on. that you did want to be here, but you were here to be an opposing, hostile witness -- [inaudible] >> i'm not aware that an official invitation was provided. >> let me ask you, mr. pool, in the state of nebraska -- thank you. i hear it now. in the state of nebraska, what federal lands do id the original route -- did the original route take? the original route go through any federal lands? >> yes, congressman. there was a small piece of landed a mored by bor, bureau of reclamation, had to do with a canal area -- >> that was south dakota, wasn't it? >> no, that's nebraska. >> okay. >> yeah. um, and so -- >> all right.

my time is up. i'm sorry. i'll have to get -- i'll submit that one for the record or for you to get back to me on. >> will do. >> at this time, i recognize the gentleman from michigan, mr. dingell, for five minutes. >> mr. chairman, i thank you for your courtesy. i'd like to make a couple quick observations n. -- in 1970, spok jackson and i wrote the environmental national policy act. it was to depoliticize the approval of projects and to see to it that we had the information we needed when we were going into those kinds of questions. so it required an environmental impact statement. that can be speeded up and properly so. but i would caution that if you speed it up too fast, you're going to repoliticize this and make a fine mess out of the thing. and cause no end of trouble and litigation. so i would beg you not to do this. i say that parenthetically i want to support this legislation. i think that the canadians are going to do this whether we like it or not, and they're either

going to build a pipeline going west or going south. and it's better n my view, that if that pipeline goes anywhere, it goes south to the united states because it'll be a much more dependable source of energy for the united states. so i would urge my colleagues not to drive away members like me by moving too fast on this because if you do, you'll just simply create a wealth of litigation. the lawyers will have a fine time, make lots of money, and the business of the country will be, in fact, delayed by carelessness in this committee. having said that, um, first question here to mr. pool. did state department refer the application to your department or to the blm? yes or no? >> say again, sir? >> did the state department refer the application to your department or to the blm? which? >> well, the application that we received was from the applicant for the segment of public land that was coming across montana.

of that's a right-of-way application. >> now, ms. gaffney-smith, did the state department refer the application to the corps? >> no. like the department of interior, the application came from the applicant. >> okay. did blm provide view on the permit application? answer yes or no. >> provide what, sir? >> did blm provide views on the permit application? please answer yes or no. >> the -- we were part of the environmental impact process that was led by the state department, and so the mandates that we have obligations with in terms of issuing a right-of-way grant in montana, then we did review the application. in the context that the overall nepa product. >> ms. gaffney-smith, did the corpses provide views on the permit application? >> in three core districts in galveston, fort worth and tulsa districts we received a preconstruction notification for

nationwide permit 12, we initiated coordination with other agencies, and we did provide a response to the applicant in accordance with our nationwide permit rules based on comments we received from the department of state. >> so the answer's yes? >> are yes. >> under h.r. 3548, the environmental review process would need to be completed within 30 days even though blm would no longer be involved in the permit review process under this bill, is 30 days enough time for blm to do the necessary due diligence on submitting its views for the keystone pipeline, yes, or no? >> congressman, i would say, no, it's not enough time. >> very good. ms. gaffney-smith, the same question to you. is 30 days enough time for the corps to submit its views? >> no, i don't believe so. >> do you believe -- this goes to both, yes or no. do you believe that ferc has the

experience that blm has to review a permit of this scope? please answer yes or no. >> i don't believe they do. >> thank you. ma'am? >> no, sir. >> all right. now, ms. gaffney-smith, do you believe that ferc has the experience that the corps has to review a permit of this scope? that's practically the same question as the prior one, but it's a little more subtle. yes or no? >> no. >> now, i want to thank you and apologize for the fact that i curtailed you in your time. mr. chairman, we can hurry this process in a way which is going to create lots of trouble and wind up, ultimately, with a delay or veto or profound litigation that could go on for years. if that occurs, we will then

find ourselves in the splendid position of having to reenter this issue with all of the politics that goes to it and all the difficulty. or we can begin moving to try and work this thing out. i would like to move in that direction. i hope the committee will exceed to that -- accede to that kind of view, and we can begin working on this in that way rather than getting ourselves in if a splendid fight which will general mate monstrous ill will and create a situation where there will actually be more delay rather than less. thank you, mr. chairman. >> thank you, mr. dingell. we do have votes on the floor, but we do have about six minutes left. so, ms. capps, i believe you were here, so i recognize you for a period of five minutes. >> thank you, mr. chairman. because i know mr. markey also was here and wants to speak, i'm asking mr. markey, do you want some of my time? would you like some of my time?

maybe it's not -- okay. i'll do it. i'm, i come from an area that is energy producing as well, and i am very impressed with -- i have one image in my mind because it was you, many pool, when you were in charge of the blm for the state of california, and i was newly elected who escorted me for the first time to see what we call the shangri la of the west, the chor rizzo plain, eastern portion of san luis obispo county, a remnant of the way the land was 300 years ago in which all of the vested interests, the mineral rights, the cattle ranchers and all of the stakeholders have found a way to preserve the natural history under the leadership of the blm. and also make that an economically-viable area. um, oil and gas industry have

all, have their role there. and i picture this pipeline going through the chorizdo plain, and i'm very concerned that we take the time that's needed to preserve in the midwest what i know from my area to be the possibility of protecting the land as well as furthering economic interest. and i see this latest attempt by house republicans to short circuit the review process, and i want to ask you because i know your expertise, mr. pool, and i also have a number of army corps projects in my district as well and have had the pleasure of working with that agency. mr. pool, would it make sense for the bureau of land management or the fish and wildlife service to issue permits for a pipeline with an unknown route? which is what we have before us today? >> um, congresswoman, i can only speak to the segment