but we obviously have to make that clearer or somehow convince the people who want to help continue the confusion, we can get them to be a little more focused on what we really need to do to fix the rule. >> sounds like communication is such a big issue. >> yeah. >> thank you. i yield back. >> thank you, miss kelly. mr. collins. >> thank you, mr. chairman. and i am going to be submitting for the record a letter dated may 1 that i sent to miss mccarthy and the honorable john mccue signed by a majority of the members of congress, over 230 members, republicans and democrats, simply asking this rule be withdrawn, withdrawn. now, obviously your administration denied that. i've only been in congress 18 months but i will say as i've heard you say again and again here, there is confusion.

it is our intent, we need to do a better job. we should make that clear. the problem is the public doesn't trust the epa. the farmers don't trust the epa to not overreach. congress doesn't trust the epa, and what we have here today is a proposed rule, a defective. as you've said we need to make things clearer, our intent is not clear, we need to do a better job. but the rule is out there. the very fact you intercepted our questions and thought you had the audacity, that you had that control, none of us trust for two seconds that the epa isn't going to let this train roll right down the tracks. saying all these good things and putting things on your blog doesn't make it so. especially when what you've shown is a disregard for listening. you don't listen. and if you don't listen, what's

going to happen -- so you're saying you're getting this input. frankly, congress doesn't trust you. the farm bureau or counties don't trust you. the public doesn't trust you to simply ignore all that you're hearing. and when you say that these puddles and streams aren't regulated, and then you put on your blogs they're not regulated but it's not clear. so i don't understand why, in our very simple request, withdraw the rule, send it back to the agency. then if you come out with a proposed rule as you say to take this further, at least it would be there. it's not there now. all these things you're claim are not intended -- i mean, do you agree? they are just not there now. >> there's a difference between making it clearer because others

are trying to make it unclear and whether i believe the rule we propose does what i say because i believe it does. so i -- i do. >> we don't. >> i believe it does and meets the intent of what i'm saying, but -- >> do you care that a majority of the members of congress, republicans and democrats alike, don't agree with you? does that -- apparently that doesn't -- that's the arrogance of your agency. you're just displaying right here in front of you. >> i'm not being arrogant. you asked me what i believe and you're trying to tell me what i believe. i'm telling you that i believe we need to do a better job of explaining -- >> so why not withdraw the rule and start over. >> because i believe the rule does what i'm saying. >> congress doesn't agree with you. the farm bureau doesn't agree with you. counties are all passing -- i also have a supreme court saying we need to do rule making. i have hundreds of letters say we should do rule making. >> this one is so defective, all we've asked is withdraw it. you've got a process moving. at the end of all of your fact gathering, you come up and say

we think it's just fine. if you're saying right now you think it's just fine, but then again you say we need to do better. it was our intent. we need to make it clear so you're almost contradicting yourself that you're saying the rule is fine but then you're saying we need to do a better job. if it's fine why do you need to do a better job? >> i want to say again there's a difference. i'm not being disrespectful. there's a difference between explaining and perhaps writing it more clearly than saying that what we intended to do we didn't do. we intended to exclude conservation practices. people read that differently. i think they are reading it too narrowly but we will even expand on that. >> this is what goes on in a normal comment period that you do administrative process. >> i will just state for the record the problem is we don't trust the epa. we the people don't trust the epa. conpress doesn't trust the epa the rule making is rolling down the tracks. we have a reasonable request signed by a majority in

republicans and democrats in congress that have said withdraw the rule. sent it back to the agency. if you want to come out with a new rule, have these exclusions in it. right from the get go at which point we would trust what you you are going to do. mr. chairman, i yield back. mr. collins has a uc request to put a couple of letters into the record. are there any objections? no objections heard. so ordered. >> misset miss etsy. >> thank you very much. thank you for being with us here today. i'd like to turn a little bit to climate change and the expected impact or possible impact and how that would tie into these regulations an the agency's thinking. according to the third national climate assessment. droughts are expected to intensify in most regions in the united states. flooding is expected to increase

in areas where total precipitation is expected to decline. the basic message being climate change will have a dramatic impact on water demand and water use. can you comment on the proposed rule and protecting the nation's water supply in light of these projected impacts of climate change. >> thank you. well, i think stepping back just a little bit, recognizing that from surface waters in the united states in the tributaries traditionally navigable waters, about 100 million people in the united states get their drinking water from surface waters. it's more than 100 million but i will just use that number. the quality of the water coming into their systems is affected by how development takes place or pollution is discharged above the streams where they receive it. this is one of the key things that the science advisory board pointed out to us that you have to look at that connection and so having proper jurisdiction and availing of the pollution control programs that are in the

clean water act to those areas is a pretty important thing to protect drinking water. on the wetland side, when you have more erratic meteorological events or weather events, wetlands provide a very effective flood control and flood mitigation function. again, well established in science. these are key things that also are very strong reason why as states and cities and counties are starting to look at how they can be more resilient in the face of climate change, that they also are looking to not only do they do some additional work with with green infrastructure but also how to maintain the existing natural systems so that they can get the attenuation from those. so those are some quick points on that. >> i hail from the state of connecticut. we both along our coastlines have been looking at these

issues as well as significant issue around borders around our streams for exactly this reason to attenuate the flooding we've been seeing with these more intense weather events. in your testimony you discussed the importance of clean water to the nation's economy. listing numbers of businesses and industries that need a reliable supply of clean water to function. can you elaborate a little bit on that how the agency is thinking not -- is the agency looking not just at health effects but also at economic impacts for those industries that actually utilize clean water. >> well, i think -- three sectors in the economy who absolutely rely on clean water is agriculture, sports -- outdoor recreation, hunting and fishing, and manufacturing.

i will say coca cola or pepsi cola or some other drink. they need supplies of clean water, and this is where there's a natural partnership with our colleagues in the agricultural community because they are stewards of the land and they need to have that same objective in mind. so, you know, our approach here is to build on their ability to do conservation work and that is what we want to be able to encourage. so these are pretty broad sectors but clean water is pretty important to them. i might add that manufacture of our developed parts of the country, cities, have turned back to the water fronts as a way to spur on economic development and revitalization of their communities. baltimore just northeast of here. the potomic river, cleveland.

all these places have had a resurgence around their community than it was 40 years ago. these are pretty important aspects. >> if you could quickly comment on the inclusion of all adjacent water rather than adjacent wet lands. this is an issue i've been questioned about at home. thank you. >> there's two -- three perhaps kinds of adjacent waters. waters is a more general term that you could have an intermittent or a perennial stream that has the characteristics of a bank and normal ordinary high water mark. you could also have wet lands which have the hydric soils and have a standing lake. all of those would be waters.

determining where they are adjacent to a navigable water are the tests we're trying to develop here in this proposal. >> my time has expired. thank you. >> mr. johnson. >> thank you mr. chairman. mr. perciasepe. thank you for joining us here today. i'd like to take off a little bit on the exchange that you had with my colleague mr. collins. let me tell you why i believe that congress in general and the american people specifically don't trust the epa. you made a statement just a few minutes ago, you said the supreme court has said that the epa needs to do rule making. i think that's what i heard you say. i think what the supreme court actually said is that under the law, you have the authority to do rule making. i think that's what the supreme court said. i think what the american people who by the way all three branches of the federal

government is subject to, the american people, i think what they expect the epa to do is to provide a responsible, regulatory environment that protects public safety, protects public health, but that does not disadvantage american businesses and american workers and cripple our economy. from the shut down of the coal industry through epa regulations, through the stranglehold that epa regulations have over our manufacturing sector, you name it. that's why the american people and congress don't trust the epa. let me go into a few questions here with you. you know there's enough new definitions and new ideas in this rule making that it's obvious that agencies will spend money figuring out how to actually implement this rule. it's clear that the epa is driving the bus even though the army corp of engineers will also

be affected. it's also apparent that other agency's programs could be affected, given the rule reaches all corners of the clean water act and not just the wetlands programs. so as the epa consulted with other federal agencies that have administrative responsibilities under the clean water act as well as considering the cost that these agencies will incur when the rule is implemented? >> in order to put out a proposal under the administrative procedures act and under the executive orders that we operate under in terms with the office of management and budget, our -- all proposed rule makings that epa or my other agency does goes through a enter agency review process for 90 days. >> what feedback have you gotten from other agencies. does the epa know how other agencies will interpret this rule or require more resources to understand how this rule effects their ability to administer their programs. have you reviewed that from

other agencies. >> we took it into account when we did the proposal. for instance, the work we did to try to identify the conservation practices that would be clearly exempt from having to have a clean water permit was something we worked on directly with the department of agriculture. >> what did the army corp of engineers say? >> they were coauthors of the rule. >> so they provided you input? >> they helped write it. >> okay. if small businesses have never obtained a permit under the clean water act before, how do they know if they will need to get a permit under this new rule? >> well it depends on what their action is. are they discharging pollution. >> how will they know whether their action requires it. >> if you discharge pollution, you have to get a permit. i mean it's the current law.

>> well, they may know that now but have never had to do it before. how will they know if this additional rule will require them to do a permit. >> well, if you do not have -- if you're not regulated under the clean water act now under the existing -- existing regulations, you will not be regulated under this proposal. >> say this again. >> we're not expanding the jurisdiction of the clean water act. >> okay. >> unless they are operating illegally under the current regulation, they would not have to -- >> how long on average will it take the agency to determine -- let's say a business comes to the agency and says we think we need a permit. how long on average will it take the agency to determine whether a permit is required? >> you know, the -- i don't have any information on that right

here. our estimate is that there will be a reduced time because we will have better definitions of where the jurisdiction is and so that step of trying to determine whether or not there is jurisdictional water or not which the currently goes on under the 2008 guidelines that were put out in the 19 -- 1984 regulations that are in place would be reduced. the number of those analysis would be reduced. so the corp of engineers clearly feels that they would have a reduced amount of time doing those because they would have a reduced number of those jurisdictional determinations that they would have to do. but i don't have an estimate from them right now or i don't know what their estimate is on that. >> okay. mr. chairman i yield back. >> thank you mr. johnson. ms. edwards. >> thank you very much mr. perciasepe for being here. i just want to say for the record that i am one of the members who actually both appreciates and respects and values the work of the

environmental protection agency and the hard work that the folks at the epa do every single day to protect our water, to make sure that our air is clean and that our health as a result is safe. so it is not a forgone conclusion that the members of congress don't like or respect or value the epa. i think it's important for us to clarify that for the record and then other members who feel otherwise can speak their piece but i've spoken mine. i want to go to some of the questions that you tried to address earlier in your testimony. i want you to describe, if you would, the very ability that exists across the country in interpretation of the scope of the clean water act following the supreme court decisions. tell me, if you would, whether other areas were considered

jurisdictional by some states and not by others that has resulted in what you describe in your testimony as a lack of clarity following those decisions. >> the clarity issue -- again we've defined in this proposal clear hydrologic science oriented approaches to determining jurisdiction, as opposed to the general one under the current regulations which is will it have an effect on intestate commerce. i think it's really important. it will really instruct the field people who do this work, mostly in the corps of engineers, to have a more consistent approach and a more consistent sense of how they get the work done. i think that that is my primary reason why i believe that this would be of significant improvement over the existing situation and i am highly

confident that the comments we're getting through the normal administrative process will help us even further improve that. >> let me ask you about that normal administrative process. you issued the proposed rule. let's be clear it is a proposed rule. in april. you did extend the time period, i believe, for response because you heard from people from states and from affected individuals, companies, et cetera, that they wanted to be able to respond. so you've extended that. so now, comments are due by october 20th. is that correct? >> yes. i think it's 20th. 21st. >> around then. needless to say it's from april, now extended october 20th. we still haven't gotten to a place where you have begun to assemble all the comments. sift through comments. review the work of the sab and thenening rate -- then

incorporate that into what might then become a final rule. is that correct? >> that's correct. again i'm being open here in saying that we have seen patterns already from our own conversations. mine personally where i think there's some things that are just people are not reading it or whatever. some are where we need to do the work that you normally do in an administrative process to improve how things are written. i think we will have more of it. i want to also mention because i think this is important to this committee, one of the other reasons we extended the comment period in addition to the fact we're getting a lot of comments is that we wanted to make sure as i've committed that the work on the final rule would be not only aided by some of those comments but also aligned with the science advisory board process. they are going to rule at its -- rule itself and look at the connectivity report associated with it. their work will be done in the

fall time frame as well. so we want to make sure that we get aligned with the science advisory board. >> just to go back to an early point. do you have some estimate of how long it takes under current guidelines to make a jurisdictional determination? >> i apologize to everyone who asked this question. i don't have some information on that. i'm happy to get whatever information we have with the corps of engineers on the current amount of time it takes to generally go through the jurisdictional -- >> i think that would be useful because i think it would help to underscore why it is that we need to bring some clarity that would begin to refine the jurisdictional determination period because that again would help in terms of moving forward decision making. anything that you could do in that regard would be helpful. i want to further ask you if you can elaborate on the role of clean water in supporting the american economy.

what does it mean when we have clean water in terms of its economic impact? >> i think we've had an opportunity to talk about this a little bit. but i will summarize here. i think there are a couple of key areas where clean water is pretty essential in addition to human consumption is agriculture. agricultural productivity in a country depends on clean water and the ability to move it around in an unimpaired, unnecessary regulations. many manufacturers require clean water or they end up having to spend money to treat it themselves to use it. i want to say also that many communities and their quality of life in a community is improved by having water bodies nearby that people feel comfortable that they can recreate in and

around. i will point to the potomac river as an example. >> thank you. thank you mr. chairman. >> thank you ms. edwards. >> mr. brown. >> before i start my time. i have unanimous consent request. administrative perciasepe made a comment that agriculture and business are in favor of this new rule. i've got two letters, one from gary black, our georgia commissioner of agriculture from department of agriculture in georgia opposing this rule as it has been presented. the other one is from chris clark, who is the president and ceo of the georgia chamber of commerce, again, opposing this rule. i ask unanimous consent that these be entered into the record. >> with that objection, so ordered. >> since i haven't started my question, please restore my time. i'd appreciate that.

administrator perciasepe, i have to hand it to you, in four terms of congress, you're one of the very best witnesses i've ever seen at filibustering a question and not answering. it's not only to republicans but it's democrats also. now the chairman showed you a map, the connectivity report map. you made a statement that you already had control over all of that property. is that correct yes or no? >> we do not control the land. >> you said you control the water on all of that area in that map, correct? yes or no. >> you know, i'm not going to do that. >> well, you did say that. are you expanding your authority here with this proposed rule? >> no. >> none whatsoever. >> why have the new rule then? >> because the existing rule, as i mentioned, is based on flawed approaches to determining jurisdiction.

it's actually more broad than the supreme court has asked us to go. >> let me ask you this, do you believe this rule improves the overall clarity of epa's jurisdiction or authority. yes or no? >> yes. >> you think it does. >> you're absolutely incorrect. you can see the questions we're asking here. this rule is not needed. the supreme court didn't dell you to make a new rule, it says you could. to me it's expanding the authority and reach of the epa. that's the reason there's so much discontent all across this country, not only in my state of georgia but in every state in this country because you all are expanding your authority. you talked about if anybody wants to put a pollutant into water, they have to get a permit. the epa has recently, fairly recently, said that co2 is a pollutant. we're all breathing out a pollutant according to your determination.

now given the importance of this issue, why has epa not done more original research on this issue and looked at a number of questions such as significant nexus? quickly, please. i don't have much time. i have a number of questions. why have you not? >> we've looked at over a thousand peer reviewed studies that have already been -- >> you just looked at the literature, is that correct? you've not done any more research than looked at the literature. >> our scientists compiled a synthesis report on the existing research that exists -- >> but you've not done any original new research is that correct? yes or no. >> not -- >> no, you have not. it looks like the epa has been cutting corners by not doing a new study. shouldn't the epa's rule making be based on sound science as determined independently by the agency. >> it is based on sound science. >> no, sir, it's not. in fact, you even intercepted

our questions against the law as the chairman and i guess mr. cramer was talking about. you have gone against what should be done. why did epa not do a new study given the supreme court's rulings that previously rejected epa's reliance on bad banks and high watermark? why only a literature review? >> i'm not aware that the supreme court rejected bed banks and ordinary high water mark. i know they rejected in the swank opinion making jurisdictional calls solely on the basis of migratory birds which gets me back to the interstate commerce problem of the existing regulation asking field biologists and hydrologists what's interstate commerce. we need to get away from that. the supreme court would like us to get away from that. i want to clarify for the record, mr. chairman, that chief justice roberts did suggest that

the agency conduct a rule making. >> but what your proposed rule is so unclear that everybody, farmers, businessmen, landowners, politicians, democrats, republicans alike are requesting you all to take away this proposed rule to abandon it and do something else. i request that you do the same thing. it's beyond me why you all are continuing to do so. you're cutting with your coal rules, the president has been very clear. he wanted to shut down the coal industry. he said he will bankrupt any company that puts out a new coal plant. he and y'all, through the epa, is doing just exactly that. in fact, you're shutting down 15 power plants in georgia. it's not fair to poor people and senior citizens on limited income, because as the president

said, his policies are going to necessarily sky rocket the cost of the energy. that's exactly what you guys are doing at the epa. that's unfair. unfair to poor people. it's unfair to senior citizens who have limited income. what you're doing now is expanding the jurisdiction and scope of the corps of engineers as well as the epa. would you agree one question -- one final question since my time is up. would you agree that every drop of water that falls on this country is going to eventually wind up potentially in a navigable stream. yes or no. >> that's the science of hydrology. >> yes or no. >> it could end up in ground water -- >> you're going to control every piece of land and every landowner. mr. chairman, i yield back. >> but those are not jurisdictional. the back yard water is not jurisdictional. mr. chairman, can i please -- >> no, we'll come back to that. mr. broun, thank you. mr. hall. >> i think this is a very

interesting hearing, mr. chairman. i thank you. i've learned a lot about arrogance. i agree with mr. collins. i think dizzy dean always said it ain't bragging if you could do it. i've always heard that the professor asked one of his students did he know the difference between ignorance and apathy. he said he didn't care. i have an idea what you're going through. mrs. edwards enjoys and sees the best in you. she's a lady attempting to do what all of us are doing, trying to get you to tell us the truth and do what you say you're going to do. i thank you for holding this hearing mr. chairman. it's a controversial proposal, raises a lot of questions about

the rules, potential impact on property owners, businesses, states. i want to examine some of these as long as i have the time. first i'd like to submit a letter and resolution from the record from the morris county commissioner's court in my district. morris county judge linda murkris writes that morris county is against any action by the epa and army corps of engineers that would infringe on the sovereignty of texas to appropriately regulate water for the state of texas. she continues, if adopted, this could increase the costly permitting requirements and infringe on private property rights and circumvent the legislative process and the will of the people of texas. now to go on in february, this committee heard testimony, president of the texas farm bureau, expressing farmers concern with the proposed rule and would mean more permits, more permit requirements. the threat of additional litigation against farmers and ranchers. he also expressed concern that

epa seems to routinely ignore the requirement that science advisory board panels be fairly balanced. mr. administrator, as you know the epa administrators office is responsible for appointing members of the agency, scientific advisory panels, including the science advisory board. last year epa assembled a panel to review the agency draft connectivity report. a highly influential assessment that you stated would inform epa's expanded interpretation of its power under the clean water act. well, your office appointed 27 experts to this panel. many were state, local or tribal regulators. how many do you think there were? my understanding the answer was zero. nine highly qualified state and local experts from the arizona department of water resources, the north carolina division of water quality and elsewhere were nominated to serve on this panel. why did the epa not appoint any of these state and local

experts? >> similarly last year epa assembled a scenes advisory panel to review the agency on ongoing study of hydraulic fracturing. thirteen qualified scientists from state and local agencies were nominated including two from the texas commission of environmental quality, despite their vast experience mr. administrator, their experience with oil and gas regulation, none of these nominees were appointed to the 39 member board. i wonder why they weren't. would you explain in some area, like local water quality of regulation of gas, state and local officials have more expertise than the epa. would you agree that the states have decades, if not centuries, of experience in some of those areas. former chairman of the railroad commission is so testified before this committee. i ask you, will you commit to

appointing geographically diverse state and local experts on the epa's scientific panels in the future. finally in view of the cost of the epa's proposed rules. shouldn't the states have more opportunities to provide input and shape a rule because it will bear so much of their cost? epa says it's consulted with states regarding a proposed rule but in your recent testimony before the house transportation and infrastructure committee, you could not name a single state infrastructure committee that had come out in support of the rule. you promised to survey the states. has that survey been conducted and make methodology is being used to conduct the survey? it has far reaching implications that need to be thoroughly examined. i thank you for your leadership on this committee.

mr. chairman, thank you. i yield back two seconds. >> documents in the record, so ordered. >> even though he's out of time, please give us a bit and we'll move on. >> thank you, mr. chairman. we do have a defined process for picking members of the science advisory board. it's a public process. an advertisement goes out to get nominees. you mentioned that some of those nominees came in. they are screened by the sab staff for conflicts of interest, and all ethics issues. and we do strive to have a diverse board. so i would certainly commit to looking at how we could continue to improve to do that. it is our intent to have a diverse board. i absolutely agree that

the states have significant and important and we need to rely on expertise in the area of hydraulic fracturing. >> for the staff sitting behind, if you would send mr. hall the mechanics. >> yes. >> because i'm going to do some sweching around with my own slot, please. >> thank you mr. chairman. i appreciate your flexibility on that. first i would ask unanimous consent to submit from the record a letter from the illinois chamber of commerce in opposition to the rule gravely concerned about what they talk about would significantly add to the already unprecedented level of uncertainty our members face from new rule and regulations. >> uc requested. any objections? so ordered. >> thank you mr. chairman. thank you, administrator, for being here today. it really is crucial that the epa regulations are based on science. so i appreciate you being here so that i can learn and try and explain to my constituents the process you all go through before drafting and finalizing new rules and regulations.

my concerns will deal directly with the scientific advisory board. the first thing i will ask, and i hope this will be a simple yes answer but does epa hold the findings of its scientific advisory board in high esteem? >> extreme high esteem. >> this is certainly good to hear, because science should always be the backbone of what you are doing at epa. something your administrator frequently sites and that we normally hear when receiving testimony from are this committee. interestingly enough, it was not in your ten page testimony today. i also that a draft rule is just that. a draft. you have said throughout your testimony that this rule is something that is supposed to bring clarity to the jurisdiction that the agency already has. unfortunately, as we can see from discussion today, this rule is not very clear. my constituents have a number of questions about how it will be effecting them. in the draft rule does epa define what a shallow subservice hydrological connection is.

is this something you leave to further examination of the literature or is it expressly defined in the rule and at what depth does water below the surface cease to be shallow and turn into ground water? >> the use of the shallow subservice water i think i'm going to say i think -- >> does it define it. my question was, does the epa define what sub -- shallow subservice hydrological connection is, or is that left to further examination of the literature as expressly defined in the rule? >> it's something that the science advisory board is looking at. it's something that they gave us some advice on in their draft statement. i want to point out and be really clear. ground water is not covered by this rule. >> so this is not expressly defined in the rule and the depth where water ceases to be shallow surface and turn into ground water is not defined. although you're saying it is not under the rule, the fact is it's not defined of when it turns

into groundwater. therefore it does fit under the rule. let me keep moving. my time is going to go away. in comments on the connectivity report, the scientific advisory board stated this represents an important where along groundwater connections are of sufficient magnitude to impact the integrity of downstream waters. the scientific advisory board stated this represents an important need for epa. considering this is an active need and activity is used by epa to support the rule, how does epa support groundwater connectivity to determine jurisdiction? >> we use -- the rule -- i think there are a number of different pieces to what you just suggested there but the rule uses the connection with subsurface shallow ground water as a way to determine adjacentcy. the ground water, i want to be

clear whether it's shallow, deep, anywhere is not covered by this rule. it's just a hydrologic tool. >> it's unclear when it goes from one to the other. if you're having trouble explaining it to us, guess what my constituents are saying. >> ground water is not covered by the rule. >> but it slips into it. that's what they are saying is that it becomes -- it's undefined of when it moves from shallow subsurface hydrological shallow subservice into groundwater. i've got less than a minute. how can a regular citizen be expected to know whether or not they are digging into something that would be ground water, the rule, or shallow subsurface water where the cwa comes into play. is it the responsibility of the landowner to review the literature since it's not clearly defined in the rule? >> they are both not covered by the rule. >> so you're saying shallow subservice water is not covered under the rule? >> correct. it is used as a hydrologic tool for field people to determine

the adjacentcy of the water. >> the actual groundwater is not jurisdictional? >> this is less clear to me than what i walked in here. i think it's probably the same for my constituents. huge concern. i hope if nothing else you get the fact that we're concerned about this. there's already such a lack of clarity in so many of the rule making. this one probably more than anything else. we're hearing huge concern from business, from farmers. i've got a great business community. i've got a great agriculture community in my district. they just don't understand this. they are scared to death. we need clarity. we need to take a step back. with that chairman, thank you so much for your indulgence, i yield back. >> thank you. mr. weber. >> thank you mr. perciasepe. the proposed rule asserts jurisdiction over perennial

streams, is that right? >> yes. >> what about intermittent streams? >> yes. >> okay. canals and ditches? >> mostly, no. >> lakes estuaries? >> lakes yes. >> we put up a map here that is provided by the usgs that shows these features in my state or state of texas where i live. i love to -- i claim it as mine. i'm very proud of it. the key shows the colors that correspond to the features. missing from this map are wet lands, ditches and other features that the epa and the army corp of engineers claim jurisdiction over. can you see that map? >> i see the map but i want to be clear. we're not claiming jurisdiction over ditches. >> well, this map is not for regulatory purposes. we've had them made by the usgs based on some of the epa -- just

some of the epa's definitions. the map is dramatic but shockingly, from what i have read of the proposed rule, the epa could go farther than what we see here. in fact, the epa sites a study that estimated that the usgs maps underrepresent drainage networks by 64.6%. that's their quote. scale up the features covered by 60% and include wet lands and we're looking at a regulated area close to double the size of what's on this map. yet remarkably, the epa you claim that the proposed rule does not -- you said this in exchange with one of the other members, it does not expand the agency's authority. he asked why do you need the rule? >> there's no way that this is what congress intended. the supreme court has rebuked the agency for claiming authority over areas that are

remote from waters that are quote, navigable, in fact, end quote. so why is the epa disregarding the supreme court and congressional intent? is the epa approve the other branches of the federal government? are you above the constitution? >> absolutely not. >> i would agree with that. it doesn't appear to the american public that's your mind set. let me follow-up on a question asked by chairman smith. i understand the epa has asked the united states geological survey to make maps similar to this one here for every state. i think it's important that the epa release these maps as part of this rule making process. today's entire hearing has been about what is and what isn't covered by this proposal. as randy -- part of the randy caucus said down there is epa's answers aren't making the situation any clearer. i would add the truth isn't exactly flowing around here. the epa needs to releases need

maps so our constituents can identify whether they are subject to regulation. so here today, will you commit to releasing these maps that the epa has had made before the end of this month so that people can comment on then as part of the rule making process as the chairman has requested? >> i'm not familiar -- these maps have come up before. i have to apologize. i am actually really not familiar with them. >> you're in the dark about this? as most of our constituents are about this proposed rule. >> that's unfair. >> unfair. that's our constituents' perception out there. let me go on. mr. chairman, i think that it's important enough that if this agency doesn't release the maps by the end of july, that this committee compel their release. my constituents are confused and

quite frankly scared by this proposal, this overreach. i think the only way we can get to the bottom of what's being planned here for regulation is to see it laid out on a map. so here today i request that you make available to us and the american people the maps that the epa had made from the usgs as well as the wetlands map made by the fish and wildlife service. we want these maps. my guess is they were created with tax payer dollars. unless i miss my guess. they should be available to the tax payers in full disclosure. we want you to make these maps available. mr. chairman, i yield back ten seconds. >> we were discussing whether they should be a penalty box for puns.

>> dr. boucshon. >> thank you mr. chairman. first of all i'd like to ask unanimous consent to enter analysis of the epa's study. the water advocacy coalition is a large group of stakeholders that have come together with concerns about the rule and include everyone from farmers to home builders. the analysis points out flaws in with the reports scientific vigor and reports usefulness in a regulatory context. >> we have ucs? no objection? so ordered. >> i'd also like to introduce a letter from the indiana chamber of commerce expressing concerns about the potential impacts of the rule on indiana's economy. >> any objections? so ordered. >> this is a letter to me. i will just read the last paragraph from the indiana chamber of commerce. we ask you that stop epa from finalizing this proposed rule that would create a significant amount of uncertainty. it would impact the whosie business community in a

detriment way. it seems like another chapter in the epa's lengthy tome of bureaucratic overreach. it's time to put a stop to federal intrusion when it's occurring versus congressional past legislation. first of all, i would like to thank you for being here and your work at the epa. i think just because we may have philosophical disagreements doesn't mean you're not working hard to do your work. i understand that. i thank you for that but we have some philosophical disagreements probably on this proposed rules. i've got some concerns from indiana farm bureau. first of all, this has been on the books for 30 years. why now? >> one of the primary drivers, this goes back to the previous exchange that the supreme court has had two separate -- more

than two, but two in particular where they have looked at the existing way the agencies, plural, the corps of engineers and the epa go about making jurisdiction determinations. where does the clean water act apply and when? again, where the clean water act applies will only affect anybody if they are going to discharge pollution. it doesn't affect agriculture. i want to be clear on that. but we have to change the way we go about doing that to comply with. that's -- here is where i think -- i agree with the mutual respect thing. i think we are trying to comply with what the supreme court has suggested is the way about going -- the way to go about doing it. i think it's totally appropriate that there may be a different point of view on that. i'm not -- i'm with you on that. >> i will take you at your word on that. >> that's what we're trying to do. >> as far as exemptions go, who has the ability to eliminate exemptions once -- say, for example -- my main concern is jurisdictional here on this issue.

issue. states, local communities versus the federal government and the potential expanded jurisdiction of the federal epa. over the states and the local communities. agricultural, for example, they're touting 54 exemptions to agricultural, but who has the ability to change the ex enempts once the jurisdictions are established. >> they are outlined in the clean water act themselves and we're trying to define them more clearly working with the u.s. department of agricultural, particularly the exemptions that refer to conservation practices that take place on agricultural land. so that would -- we feel they're already exempt, but the need to clarify specifically which kinds of practices are exemption are what we're trying to do. we heard from farmers that we're getting too specific, and what

if they did it in a slightly different way, would that then not cover? so that's the kind of thing that we normally would hear and try to fix. >> the concern i have, which is many of my constituents do and honestly i think the american people, not specific to the epa but the federal government in general, once the federal government has jurisdiction then once -- then the rules suddenly change, and i think you're seeing that in health care. i'm a health care provider, i was a heart surgeon before coming here. once jurisdiction has been established at the federal level backing that away is, first of all, nearly impossible and second of all, the concern is the rules will change including exemptions. i do have a couple specific questions about farming, and i appreciate your response. these are concerns from indiana farm bureau that farmers have told them, and, for example, ditches. if a farmer has a ditch that runs alongside and between farm fields and those ditches carry

rain water that eventually flows to a scream or river how can the farmer determine whether those ditches are excavated only in upleads and drain only in upleads. >> based on what you described, that's what it is and it would not be jurisdictional. >> farmer determines that or the epa determine that is? >> the epa doesn't determine it. the corps of engineers does the fieldwork if the farmer wanted discharge into that. we try to make it clear for the rule and for the first time -- >> it a farmer has a small depression area where water ponds after rain, how can a farmer know whether these are waters of the u.s. under the proposed rules? >> they are not. >> they are not. >> it says that in the rule? i don't know exactly where it says it in the rule but they're not because they don't meet the other definition of being a water. they don't have a bank and a high water mark. they don't have -- they're farmed lands which are -- >> and that's what i'm trying to

get at with these questions is where the rule -- the level of uncertainty on the ground out in the community is about the proposed rule generates these type of questions. and so that's what needs to be cleared up because, again, from my perspective, once the federal government establishes jurisdiction, retracting that is very difficult if not impossible and also there is concern that the rules within that jurisdiction will change, and jur gettiyou're getting this lef uncertainty among farmers. i just did an event in my district, indiana farm bureau, all these questions came up. the main question is jurisdictional. with that i'm going to have to yield back. thanks, mr. chairman. >> rest assured, wet farm fields are not jurisdictional. just to add to -- to help a little bit on the jurisdiction thing, in almost every state, and i think probably every state, the states are responsible for implementing the clean water act.

so the jurisdictional determination may determine where they have to do their work, but the states are the ones that do most -- virtually all of the implementation. i'm sorry, mr. chairman. >> thank you, doctor. professor massey. >> i'm not a professor. >> never mind. >> very quickly, let me ask you this mr. -- >> bob. >> bob. okay, thank you. do you anticipate having a larger budget at the epa next year or a smaller budget? >> for 2015? >> yeah. >> the president's budget that was submitted to congress was smaller than 2014. >> okay. what's the additional cost of implementing this new rule? >> well, it's a combination between epa and the corps of engineers. >> we met before in the transportation infrastructure committee, so i asked the question then, i'll ask you again, hopefully we get the same number. what's the cost of implementing

this rule? >> if you let me shuffle a paper, i'll give you the same answer. >> i'll give it to you. i don't want to put you on the spot. it was $100 million to $200 million. does that sound about right? >> that sounds in the ballpark. >> i have the transcript. >> i can get it. >> isn't it a little bit fiscally irresponsible to undertake a $100 million to $200 million project when you anticipate your budget will decrease? >> when we do those cost estimates, we are doing those cost estimates on what the cost to the economy is, and so that means like 160 to 280. >> okay. >> and those are permit processing expenses and mitigation expenses that might have to come into play if somebody wants to get a permit and they have to -- they can do the activity but they have to do mitigation. >> so you plan on passing those costs on to the people who are going to file for permits? >> those are the costs we estimated of doing the permits and also doing the mitigation.

>> i think it's fiscally irresponsible to undertake this new rule that will undeniably cost you more money to implement when you know, nventin fact, th president acknowledges your budget is going to go down. let me ask you another question, can you have science without measurements, without numbers, without units? >> for most science you need that. i'm going to say that there's probably some that you don't but -- >> well, know, i'm looking at the rule, i can't find any numbers. i can't find unit measurements. let me give you example. floodplain means an area that was formed by sediment, deposition from such water under present climatic conditions and is inundated during periods of moderate to high water flows. is moderate to high a scientific term? >> i think these are terms that are used routinely in the science of hydrology.

>> can you convert that to gallons per minute, moderate to high. >> depends on the size of the stream and the drainage area or in the case of the atlantic ocean it's pretty big. >> without facts all you have is an opinion and this leaves it open to opinion, so without units, you cannot have science without measurements. let me ask you another question from the definition here. these are features that are exempt under this rule. one of them is an artificial lake or pond created by excavating and or diking dry land. i own a farm. i built a few ponds. the last place i would put a pond is where there is dry land, where there is no water. how can you dike dry land and create a pond for irrigation? >> well, you take an area of a stream that -- i mean an area of a field or a woodland where the slope is in this direction and you put up -- >> so there's some flow of water -- >> -- a dike and when it rains -- >> so you get some water that's

coming not just landing in the pond but from sounding areas. so there's a flow across the land. if the goal is to create an exemption for landowners they can understand, why wouldn't you put a scientific ewe not guilty of measure. what's a unit of measure for a pond or a lake? >> gallons. >> gallons. but that's a little hard -- that's a good number. acre feet is another -- >> acre feet is a bigger one. >> yeah. so why wouldn't you put a definition in there that's scientific. clearly there's flow of water going into this. so there has to be some flow. you could define it gallons per minute or something like that, the pond in acre feet because it's clearly not going to be on dry land if you're creating this or it wouldn't exist. you'd have a dry pond. and i have built a few of those, too. >> well, the concept of dry land

is that land -- >> explain that to me. >> it's not currently a lake or a stream or a river -- >> i think it would have to be under a roof really to be completely dry. there has to be some flow. what i'm asking -- >> it's a term of art in hydrology. >> term of art. i'd like a term of science. like when you define a bank, how tall is the bank in feet? >> there are criteria for a bank and there's criteria for a high water mark. >> so let's just -- quickly, my time has already expired. on a floo floodplain what are the units to define the size and scope of a floodplain? >> normally floodplains are defined by the frequency -- >> that's how we define them -- >> the frequency of inundation. >> correct. why wouldn't you define a floodplain that way instead of leaving it so open-ended to say it's moderate to high water flow. would you agree that's not a scientific term? there's no units, there's no number. >> we've asked for help in

defining the size of the floodplain, but a specific question we've asked in the proposal. >> well, that's a science that's already established. i suggest you go use some science. thank you. >> so it's 100, 500 -- you know, we've asked for advice on which -- what size and how to do that. >> well, it's a very clear science. you could use some science in these definitions. thank you. >> thank you, mr. massey. mr. brooks. >> thank you, mr. chairman. i don't know, but having heard those questions, it sort of seems to me that mr. massey has a doctorate. maybe we ought to give him an honorary one right here and now. >> it was definitely professor-like. >> mr. chairman, i have a letter from jimmy parnell of alabama farmer's federation dated july 8th, 2014, that i'd like entered into the record. >> any objection? so ordered. >> thank you, mr. chairman. it is my understanding that this rule relies on the, quote, significant nexus, end quote test to determine what, quote, other waters, end quote, would be regulated. as all hydrological connections

are certainly not significant, can you please explain how the agency plans to identify what constitutes a significant connection? does the agency plan to establish some means of quantifying the significance of a hydrological connection? if so, can you provide a real world example of how the determination would be made? >> we've tried to use two key established approaches to define when it's significant because i think as many have pointed out already and i think it's worth noting that, you know, the broader hydrologic cycle almost anything can be defined as connected, but significant is a very important component of how we're going to have to do the work here. so we've proposed that if it's a tributary that runs either all the time or seasonally as

justice scalia outlined, that it would have to be -- it would have to have water in it enough that it had a defined bank, high water mark, and a bed. now, there are criteria for those that are defined in the science of hydrology. so if it doesn't have those characteristics, then we're saying there's not enough times that water is flowing in it that it's significant. so it's not significant. so that means the puddle in my backyard, the roof drains, things like that don't have those characteristics, so they're not significant, they're not covered. wet field, same situation. and for standing water, obviously if it is a lake that's wet all the time or if there's a wetland that has the characteristic soils and hydrofidic vegetation that's characteristic in science of what a wetland is, then that would be significant.

then there are other issues that the supreme court has asked that be considered, things like adjacency, et cetera, so if you have some of these characters b istics but you're not agrdjacad we've proposed some issues to dell with that. >> dr. david sunding, ha has published a report on the agency's economic analysis of this report. i will quote from his remarks. quote, epa is proposing an expansion of the definition of the term waters of the united states to include categories of waters that were previously never regulated as waters of the united states such as all waters in floodplains, repairing areas, and certain ditches. the inclusion will broaden the scope of the clean water act and will increase the cost associated with each program. unfortunately, the epa analysis relies on a flawed methodology

for estimating the extent of newly jurisdictional waters that systematically underestimates the impact of the definitional changes. this is compounded by the exclusion of several important types of costs and the use of a flawed benefits transfer methodology which epa uses to estimate the benefits of expanding jurisdiction. the errors, omissions, and lack of transparency are so severe as to render it virtually meaningless, end quote. those are dr. sunding's words, not mine. how can congress or the public adequately eval w5i9 the scientific or economic impacts of the proposal if the economic analysis is as problematic as the doctor indicates? >> well, we have that report. i haven't personally read it yet, but it is certainly going into the docket. we will formally put it in our docket for this rule and we will analyze it and see what we may need to do to our economic analysis, but i can tell you right off, and we had a discussion about this earlier,

and i was probably less successful than i would desire to explain this, but all floodplains are not jurisdictional waters. the fact that it is inundated let's say annually by a spring flood or every ten years by a ten-year flood does not make it jurisdictional. it's just a indicator that the water that is there all the time or under those other characteristics i just mentioned to you then would be jurisdictional because they're adjacent to the other stream. we use it as a way to determine in the science of hydrology whether it's adjacent. so if you make an assumption that the entire land mass of a 1 100-year floodplain would require a permit, then you get into this situation that i think that analysis did where it said we're underestimating. but i want to be more clear on that, and we're going to look into that in more detail.

>> thank you, mr. chairman. >> thank you, mr. brooks. miss loomis. >> thank you, mr. chairman. and thank you, mr. perciasepe, for being here. this is the rule that terrifies people in my state more than any other rule that the federal government is proposing right now, so my questions are going to be very specific. >> okay. >> but i want you to know how terrified people are. now, this goes -- i'm from the west. i'm from wyoming where water is scarce, precious, carefully administered, and the resource about which we worry the most and fret the most, and you just have people in the west completely terrified about this. i just want you to know that. part of the terrifying effects of this is that the supreme court rejected the clean water act jurisdiction over isolated

ponds because they lacked a significant nexus to navigable matters, and we don't understand why the panel of scientists is not focusing on what significant nexus means. instead, this rule is focusing on connection and connectivity. the courts have repeatedly said that a connection is not enough, and yet the epa is basing this rule on a report that evaluates connections. so i would argue that that is among the umbrella basis for our huge concerns, the western governors are concerned, the western attorneys general are concerned, the western state engineers are concerned, the water users are concerned, the local water administrators are concerned. it is an enormous issue. laying that groundwork, here are

my specific questions. we don't understand why the epa allowed only an additional 20-day comment period on the interpretative rule on the ag exemptions. there are some exemptions, 56 practices that are exempt as i understand it, but there are 100 other practices that we believe should be added to this list. here is my questions. please provide a detailed analysis of how the national conservation resource service conservation practice standard for irrigation canal or lateral, irrigation canal or lateral, that's code 320, aligns with the treatment of these facilities in the proposed rule for the hearing record. >> i can't do that off the top of my head, but i'm happy to do it for the record. >> fabulous. and the other questions that i

have are going to be for the record as well. >> okay. >> please provide us how the nrcs conservation practice standard for an irrigation field ditch, this is code 388, aligns with the treatment of ditches in the proposed waters of the u.s. rule. please discuss how the nrcs standards for a pumping plant, this is code 533, a stream crossing, code 578, and a structure for water control, this is code 587, align with the regulatory consequences of the waters of the u.s. proposed rule. we need detailed written analyses of these for the hearing record. we also need an analysis in the

rulemaking docket so people have an adequate opportunity to consider and comment on these analyses. these are the kinds of details that have heretofore been left out, and when you couple the fact that this scientific committee that was assembled has i think two people out of 50 that are connected to tribe states and local water regulators provides no comfort for us, and those two that came from state agencies both came from the california epa. there's almost no state agency that is more disparate from my state, our tribes, our counties, our water regulators' frame of reference than the california epa. the only other agency that is

more disparate is the u.s. epa. so, in other words, we really feel from the west that this scientific committee has no expertise in our water jurisdiction, concerns, quantity, quality, and we, as i said at the beginning of my remarks, there's just no rule that terrifies us more. thank you, mr. chairman. i yield back. >> thank you, miss lummis. and hopefully staff got that list, and you'll be able to respond. >> it looks like we'll be able to get it somehow. i tried to write them all down. >> i'll make sure that your folks have this list. >> thank you. >> thank you, miss lummis. and now it's finally my turn, and i have two letters i wish to put into the record without objection. seeing we're the last two here, if there's an objection, i'm going to be really worried.

from my irrigational electrical districts of arizona and national stone and sand and gravel association. no objection, so ordered. it's been fascinating listening to this because -- and i should disclose about six weeks ago right down the hall we did one of those things we try to do with big pieces of legislation where you invite in a handful of lawyers, and this was an interesting group. a couple lawyers -- i think one had actually even been staff over at the epa, so they weren't necessarily an ideological set, and we did that sort of game theory. let's sort of walk through the sections of this rule and see what it models, see what this means, how absurd could you take it? where would a court said it? and i think from those sorts of discussions that's where you're picking up the stress from many of us up here. it may not be what you intended, but it is what the words say and

particularly in a lit tige just world that we're in, where if the words have any movement, somebody is going to jump on it. in the discussion here floodplains kept being sort of adjacent to an active waterway. for those of us from the desert southwest, if you were ever to look at maricopa county, third most populous or fourth most populous county in the united states, but the top part of my county has huge, huge areas that are designated as floodplains even though it may be the ever other year monsoon season. how does that fall into this? i mean, there's areas up there where you have to get a 404 permit to do almost anything. >> well, i'm going to -- so we've asked that we get some comment on the concept of using

a floodplain, which is obviously associated with a water, as a mechanism at science-based mechanism to determine if there are waters in that floodplain, not at the time it's flooding but -- >> but the problem is the use of the word floodplain for those of us in the desert southwest where i may get 14 inches a year and it comes on a tuesday. >> so that floodwater, you know, those lands that are flooded on that particular -- you know, i have been in arizona during the monsoon season, and along the salt river or rio salado, i worked at the nature center, the william pullman nature center down on i think it's center stre street, so we're using that to say if this area floods, then if there's a stream in that area or

a wetland in that area, then the chances are it probably has some connection to the main river. it doesn't mean that the whole floodplain is somehow becomes like a dry -- >> let's go through this in a mechanical and then let's do a case scenario. so i'm elated you have some experience with the desert southwest. so those floodplains, water does run through them and may run down and eventually hit another wash that hits another wash that eventually ends up in the verde river and then the salt river so in that case you would see a nexus. >> on -- there would be a nexus on the river bed in terms of jurisdiction, and if there was another river or wetland feature that met those other characteristics, had a bad bank

and a high water mark or high drik soils and vegetation, it would be looked at as being adjacent to the water but the entire flood plain -- >> no, no, no that wasn't my question. let's back up a little because you have the experience. salt river bed, navigable, should it fall under the waters of the u.s.? >> it's probably not navigable except for a few times a year. >> but would it fall under your -- >> but it would fall under a tributary that is tributary to a -- >> so it would. >> and could affect the quality of the salt river, could affect the quality of the navigable water, and i think that's how the supreme court tried to use the concept of if it affects down stream -- >> okay. well, in my remaining -- and the beauty of playing chairman is i keep giving myself more time. let's do a little game theory. i have an occasional creek behind my home. runs certain times of the year, and i go out and i take shovels

and shovels and shovels of dirt and throw it in there. did i violate the rule? and that creek runs down to a river. >> you're saying that that creek has water in it every year? or just -- it's just rain? is it an erosional feature. >> let's say it's running at that time and i'm throwing dirt into it. pollutant as defined and so in that case i would have needed a 404 permit to be throwing that dirt in. >> it really -- i mean, there's so many reasons why it not be i can't really -- >> this actually came from our legal work group last month. okay. so how about if it's an occasional where this time i'm throwing dirt into it and it's dry but i'm changing sort of the structure of it but when water does come down it's going to pick up the additional sediment and run it down to the verde river in my area. still probably would fall

under -- >> recognizing i have a modest amount of familiarity with what that place probably looks like even if you didn't put the dirt in there, i don't know that it will be noticeable. because you've got a dry situation where the sand and the smaller grains and even the stones depending on how torrential the rain might be are going to move down stream. >> but you can see where that becomes a really interesting standard. so now the standard is noticeable. >> sorry -- i'm sorry, i'm just -- you're trying to engage me in a conversation. >> i'm not trying to hold you. i'm trying to get even my own head around it because i have had groups of very smart lawyers and some of them not ideological at all, they're just good lawyers, who are way over here saying, oh, they don't mean that, and over here saying i'm going to sue and i'm going to litigate and i'm going to win on this because here is how it's worded. that's where the fear comes because for many of us who live out in the desert southwest, we ride our horses through washes.

we plant trees and then we fertilize them alongside those washes. have i just created a pollutant because that pollutant runs down and eventually hits a dry salt river bed? well, the dry salt river bed hasn't run water to the colorado in 30-some years. maricopa county is one of the places on earth where we recycle every drop of our water. we do some great stuff. >> i agree. >> last two things, i know i'm way over my time, i know there was some frustration shared from you on people you thought were pushing things, maybe exaggerating, conflating, but we even did it in the conversation here of folks talking about drinking water. well, that's a different statute, so we got to be careful for all of us conflating. last bit on ditches. okay. let's say i have a ditch -- we'll call it the central arizona project, the world's longest aqueduct and it puts water into a large lake, lake

pleasant, and then picks that water back out of that lake and continues to move it through my state. the fact it was parked in -- because the lake is under the jurisdiction, currently and in the future rule, right? so did the transfer from that ditch into a holding lake and then transfer back into a ditch all of a sudden turn the water movement there under this rule? >> you know, i'm not 100% familiar with that situation. i have some familiarity with it, but the central arizona project would not be -- >> but the ditch itself -- i know you have said a couple times a ditch is not, but this is a different mechanic. remember, we put it into a regulated lake as a holding. >> well, you know, irrigation ditches are not -- >> but this is -- but you can start to see, these are where -- >> is this lake -- i apologize for not -- >> lake pleasant. >> is it used to recharge ground water? >> no, no.

this is actually mostly for water supplies, irrigation supplies, municipal supplies but it's also a large recreational lake. so a large -- but you start to see where we have some design issues because also in desert southwest type of agricultural we use a lot of ditches where we'll gather water, run it around, and put it back. >> the danger you have with the guy at the top or near the top of the food chain, you know, trying to answer these technical questions on particular matter is it's difficult, but our -- we do not want irrigation systems to be jurisdictional. we certainly don't want ditches that if you took the water away they'd just go back to being what the land that it was. >> there will be some other discussions and if we have time we'll send you a couple notes saying there may be a need to change some of that ditch language because particularly for those of us in the desert southwest, the way we use them. it's a constant transferring

back and forth from ditch bodies and different uses. you see where some of the concerns are. and i think with that because it's not like i haven't gone double my allotted time, so i appreciate everyone's patience, i need to thank you as our witness. to the members of the committee, we'll have, if they have additional questions for you and we'll ask you to respond to those in writing. the record will remain open for two additional weeks. comments and written questions from any members. the witness is excused. thank you for joining us. >> thank you, mr. chairman. >> all right. and we're adjourned. >> thank you.

coming up in about ten minutes, a hearing on cyber crime and the efforts of the government and private industry to stop these criminal activities using computer networks. the justice department's assistant attorney general for the criminal division and an fbi cyber crime specialist join officials from microsoft and symantec appearing before a senate judiciary subcommittee. live coverage coming up about 2:30 p.m. eastern time here on c-span3. that should be getting under way shortly on capitol hill. tomorrow the house rules committee holds a hearing to consider legislation put forth by house speaker john boehner that would grant authority to begin a lawsuit against president obama for what it calls actions by the president

inconsistent with his duties under the constitution of the united states. live coverage begins tomorrow morning at 10:00 a.m. eastern on c-span3. today the house of representatives is considering a bill to replenish the highway trust fund allowing projects to move forward through may 31st of next year. here is more about the bill from a capitol hill reporter. >> with an end of august deadline looming, the house takes up a short-term highway bill, and we're joined by richard rubin, who is tax policy reporter for bloomberg news. richard rubin, how short-term is this bill? how much would it cost? and what sort of projects would it cover? >> this bill would provide about $10.8 billion to fund highway and transit construction project the throughout the u.s. through the end of may 2015. so actually long-term compared to what congress often does but much shorter term than what construction companies and governors and business groups

really want. >> well, in an ideal world, what is that long-term bill? >> in an ideal world they'd like to do a six-year transportation bill. these projects take a long time to plan, survey, prepare for construction and then do construction. having that certainty of a funding stream and a budget really helps transportation officials around the country plan, and congress is not providing that, at least not right now. >> your colleague at bloomberg writing the story about the white house being on board. here is the headline in bloomberg news. obama urges support for republican highway fund bill. why is the white house behind it? >> because the white house wants to get this done. the white house is worried about the economic effects of a construction slowdown that would start happening at the beginning of august. so they're just moving ahead and wanting to get this done. the house bill is different from what the democrat-chroontrolled

senate finance committee has approved. by siding with the house that takes some of the steam out of the senate effort. what we'll watch is what will happen in the senate, whether they will take the house bill and send it to the president or whether they will have some changes over there. >> on the other side of this -- of the hill -- or the other side of the aisle i should say, heritage action is tweeting calling for members to vote against it. here is their tweet. they're calling it a key vote, vote no on highway and transportation funding. why are groups like heritage action and other conservative groups calling on members to vote against the bill? >> there's some budgetary gimmicks in here. you know, one of the biggest offsets in this package is called pension smoothing, and that basically lets companies put less in their pension plans right now which you would think has nothing to do with revenue, but when companies put less in their pensions, they get smaller tax deductions and thus pay more in taxes. and so even they there's no real change ultimately in what companies are required to contribute to their pension

plans, it provides money up front that's used, so it's money over ten years that's used to pay for eight to ten months of highway spending, and that's always been a concern for a lot of republicans and conservative groups which is this idea of using multiple years of offsets in revenue and spending cuts to pay for a short-term increase. >> with the white house behind its whip moyer said democrats don't like the short term highway funding bill but in the final analysis will vote for it. moving forward you talk a little bit about the house and senate and possibly the senate making some changes based on what the house does. is the idea of doing a long-term five or six-year highway bill just out the window not going to happen? >> well, the idea of doing it is still there. the fact of doing it is not. speaker boehner said last week that he doesn't expect it to happen anytime this year. you'll hear some democrats, senator carper of delaware has

made this argument, they should do a short-term bill, even shorter than this, something through december to keep pressure on congress to act this year. that doesn't look like it's going to happen, and so we'll head into the next congress and they'll have this may 31st deadline and depending on the composition of that congress maybe they'll be able to come up with a five, six-year bill by then but the prospects of doing that this year don't look particularly strong right now. >> one of the question marks on this debate has been the gas tax and is there any sort of building consensus on whether that gas tax has to change based on the way technology is changing in cars and the way people are driving? >> no. there's significant lack of consensus on what any sort of stable funding source should be going forward. so the gas tax hasn't been raised since 1993. it's not indexed to inflation. cars are becoming more fuel efficient and all of that is contributing to the sort of ongoing structural problem with the highway trust fund and the transit trust fund, and so what

that means is they've got to come up with some other way of funding this, and there's wide disagreement between the parties on the best way to do that. >> richard rubin is tax policy reporter with bloomberg news. read more at bloomberg.com and he's also on twitter and you can follow his reporting @richardrubindc. thank you for the update. >> thanks, bill. the president had remarks today about highway funding during a stop in mclean, virginia, the hill has this article. president obama on tuesday chastised congress for not passing a long-term highway funding solution. even as he signaled support for legislation that would keep construction workers on the job into next year. all this does is set up for the crisis a few months from now, obama said during a speech in northern virginia. congress shouldn't pat itself on the back for averting disaster for a few months kicking the can down the road a few months. obama argued that instead of barely paying our bills in the present, we should be investing in our future and slammed

republicans for refusing his plan to funnel federal dollars to the highway trust fund by closing corporate tax loopholes. again, that story in "the hill" today. fed chair janet yellen testified earlier today before the senate banking committee about monetary policy goals, including interest rates. here is some of what she had to say. >> the fomc is committed to policies that will promote maximum employment and price stability consistent with our dual man dadate from the congre. given the economic situation that i just described, we judge that a high degree of monetary policy accommodation remains appropriate. consistent with that assessment, we have maintained the target range for the federal funds rate at 0% to 0.25% and have continued to rely on large-scale asset purchases and forward

guidance about the path of the federal funds rate to provide the appropriate level of support for the economy. in light of the cumulative progress toward maximum employment that has occurred since the inception of the federal reserve's asset purchase program in september 2012 and the fomc's assessment that labor market conditions would continue to improve, the committee has made measured reductions in the monthly pace of our asset purchases at each of our regular meetings this year. >> live to capitol hill now for a hearing on cyber crime and the efforts of the government and private industry to stop these criminal activities using computer networks. the justice department's assistant attorney general for the criminal division and an fbi cyber crime specialist will be joining officials from microsoft and symantec appearing before a

senate judiciary subcommittee chaired by sheldon whitehouse. live coverage. >> i want to thank everyone for being here. i have the permission of my ranking member to get under way. he will be joining us shortly, but allowing for opening statements and so forth. i think it's probably the best way to do this to simply proceed and get under way. today's hearing is entitled taking down botnets, public and private efforts to disrupt and dismantle cyber criminal networks. we are going to be hearing testimony about these botnets and about the threat that they pose to our economy, to our personal privacy, and to our national security. a botnet is a simple thing. it's a network of computers

connected over the internet that can be instructed to carry out specific tasks. the problem with botnets is typically the owners of those computers don't know that they are carrying out those tasks. botnets have existed in various forms for well over a decade, and they are now recognized as a weapon of choice for cyber criminals, and it is easy to see why. a botnet can increase the computing resources at a hacker's disposal exponentially all while helping conceal the hacker's identity. a cyber criminal with access to a large botnet can command a virtual army of millions, most of whom have no idea that they have been conscripted. botnets enable criminals to steal individual's personal and

financial information, to plunder bank accounts, to commit identity theft on a massive scale. for years botnets have sent most of the spam that we all receive. the largest botnets are capable of sending billions of spam messages every day. botnets are also used to launch distributed denial of service or ddos attacks which can shut down websites by overwhelming them with incoming traffic. this is a constant danger for businesses in every sector of our economy, but we have seen this strategy used against everything from businesses to sovereign nations. the only limit to the malicious purposes for which botnets can be used is the imagination of the criminal who controls them. and when a hacker runs out of uses for a botnet, he can simply sell it to another criminal organization to use for an

entirely new purpose. it presents a virtual infrastructure of crime. let's be clear, the threat from botnets is not just a threat to our wallets. botnets are effective weapons not merely for those who want to steal from us, but also for those who wish to do us far more serious harm. experts have long feared that the next 9/11 may be a cyber attack. if that's the case, it is likely that a botnet will be involved. simply put, botnets threaten the integrity of our computer networks, our personal privacy, and our national security. in recent years the government and the private sector have launched aggressive enforcement actions to disrupt and to disable individual botnets.

the techniques used to go after these botnets have been as varied as the botnets themselves. many of these enforcement actions use the court system to obtain injunctions and restraining orders utilizing innovative legal theories, combining modern statutory claims under statutes such as the computer fraud and abuse act with such ancient common law claims as trespass to chattels. in 2011 the government obtained for the first time a court order that allowed it to seize control of a botnet using a substitute command and control server. as a result, the fbi launched a successful takedown of the core flood botnet freeing 90% of the computers core flood had infected in the united states.

microsoft, working with law enforcement, has obtained several civil restraining orders to disrupt and in some cases take down individual botnets, including the citadel botnet which was responsible for stealing hundreds of millions of dollars. and earlier this year the justice department and the fbi working with the private sector and law enforcement agencies around the world obtained a restraining order allowing them to take over the game over zeus botnet. this action was particularly challenging because the botnet relied on a decentralized command structure that was designed to thwart effort to stop it. each of our witnesses today has played a role in efforts to stop botnets. i look forward to learning more about these and other enforcement actions and the lessons that we should take away from them. we must recognize that

enforcement actions are just one part of the answer, so i'm interested in hearing also about how we can better inform computer users of the dangers of botnets and what other hygiene steps we can take to address this threat. my hope is that this hearing starts a conversation among those dealing day to day with the botnet threat and those of us in congress who are deeply concerned about that threat. congress, of course, cannot and should not dictate tactics for fighting botnets. that must be driven by the expertise of those on the front lines of the fight, but congress does have an important role to make sure there is a solid legal foundation for enforcement actions against botnets and clear standards governing when they can occur. we must also ensure that botnet takedowns and other actions are carried out in a way that protects consumers' privacy. all while recognizing that botnets themselves represent one of the greatest privacy threats

that computer users face today. they can actually hack into your computer and look at you through your web cam. and we must make sure that our laws respond to a threat that is constantly evolving and encourage, rather than stifle, innovation to disrupt cyber criminal networks. i look forward to starting this conversation today and to continuing it in the months ahead. i thank my distinguished ranking member for being such a terrific colleague on these cyber issues. we hope that a good piece of cyber botnet legislation can emerge from our work together. i thank you all for participating in this hearing and for your efforts to protect americans from this dangerous threat, and before we hear from our witnesses, i'll yield to my distinguished ranking member, senator lindsey graham. >> thank you, mr. chairman. i just want to acknowledge your work on this issue and

everything related to cyber threats. there is no stronger, clearer voice in the senate than sheldon whitehouse in terms of the threats we face on the criminal front and the terrorist front that come from cyber misdeeds, and congress is having a difficult time organizing ourselves to combat both threats, but to make sure this is not an academic exercise, i guess it was last year, it might have even been a bit longer, but the department of revenue in south carolina was hacked into by -- we don't know all the details, but a criminal enterprise that stole thousands -- millions of social security numbers and information regarding companies' charters, revenue, and that's required the state of south carolina to purchase protection. i think it was a $35 million per year allocation to protect those who had their social security numbers stolen we believe by a criminal enterprise.

it happened in south carolina. it can happen to any company, any business, any organization in america, and our laws are not where they should be so the purpose of this hearing is to gather information and hopefully come out and be a friend of law enforcement. so senator whitehouse you deserve a lot of credit in my view about leading the effort in the united states senate if not the congress as a whole in this issue. thank you. >> i'm delighted to welcome our administration witnesses. before we do, his timing is perfect, senator chris kunz has joined us. and yields on making an opening statement. the girs witness is leslie caldwell, the head of the criminal division at the department of justice and was confirmed on may 15th, 2014. she oversees they'rely 600 attorneys who prosecute federal criminal cases across the country. she has dedicated most of her professional career to handling

criminal cases having served as the director of the enron task force and as a federal prosecutor in new york and california. after her testimony, we'll hear from joseph demarest who is the assistant director for the fbi's cyber division. he joined the fbi as a special agent in 1988 and has held several leadership positions within the bureau serving as, for instance, head and assistant director of the international operations division and as the assistant director in charge of the new york division. he was appointed to his current position in 2012, and i have to say that i have had the chance to work very closely with mr. demarest and i appreciate very much the energy and determination he has brought to this particular arena of combat against the criminal networks of the world and look forward to his testimony. let me begin with assistant attorney general caldwell.

>> ranking member graham, and senator, thank you for the opportunity to discuss today the justice department's fight against botnets, and i particularly want to thank the chair for holding this hearing and for his continued leadership on these important issues. the threat from botnets defined in simple terms as networks of hijacked computers surreptitiously infected with malicious software or malware which are controlled by an individual or an organized group for criminal purposes has increased dramatically over the past several years. criminals are using state of the art techniques, seemingly drawn from science tix fiction movies to take control of thousands or even hundreds of thousands of victim computers or bots. they can then command these bots to do various things as senator whitehouse indicated. they can flood an internet site with junk data, they can knock it offline by doing that, that he can stel banking credentials, credit card numbers, other personal information, other

financial information, send fraudulent spam e-mail, or even spy on unsuspecting computer users through their web cams. they are intended to undermine americans' privacy and security and to steal from unsuspecting victims. if left unchecked, they will succeed in doing so. as cyber criminals have become more sophisticated over recent years, the department of justice working through highly trained prosecutors at the computer crime and intellectual property section of the criminal division, the national security division of the justice departme department, u.s. attorneys offices across the country and the fbi and other law enforcement agencies, we have likewise adapted and advanced our tactics. as one example, in may of this year the u.s. attorney for the western district of pennsylvania and the fbi in partnership with other federal and private sector organizations disrupted the game over zeus botnet and indicted a key member of that group that

operated that botnet. until its disruption, game over zeus was widely regarded as the most sophisticated criminal botnet in existence worldwide. from 2011 to 2014, game over zeus infected between 500,000 and 1 million computers. and it caused more than $100 million in financial loss. put simply, the bot master stole personal information from victim computers and with the click of a mouse used that stolen information to empty the bank accounts and rob small businesses, hospitals, and other victims by transferring funds from the victims' kts to the criminal's own accounts. they used it to install krip toe locker, a type of malware known as ransom ware installed on infected computers and it inabled these computers to encrypt key files and charge them a ransom for the release of their own files.

in the short period between their emergence and their action, it infected more than 260,000 computers world wide. there was a complex international investigation. it continued through the department's use of a combination of court authorized criminal and civil legal process to stop infected computers from communicating with one another and with other servers around the world. the investigation and operation ultimately permitted the team not only to identify and charge one of the leading perpetrators but also to cripple the botnet and to stop the ransom ware from functioning. moreover, the fbi was able to identify victims and working with the department of homeland security, foreign governments, and private sector partners was able to facilitate the removal of malware from many victim computers. as we informed the court last week, at present the game over zeus botnet remains inoperable and out of the criminals' hands. game over zeus infections are down 30% and crypto locker

remains nonoperational. we are employing investigative tools that congress has given us to protect our citizens and businesses. we've leveraged our strengths by partnering with agencies all over the world and in the private sector. if we want to remain effective in protecting our citizens and businesses, however, our laws and resources must keep pace with the increasingly sophisticated tactics and growing numbers of our adversaries. our adversaries are always adapting, so must we. in my written statement i describe several legislative proposals and resource increasings that will assist the department in its efforts to counter this threat. these proposals include an amendment to the computer fraud and abuse act and several other proposals. we look very much forward to working with the committee to address these issues. we also need additional resources at the department to continue to disrupt botnets including hiring new attorneys as indicated in my statement. thank you again for the opportunity to discuss our work in this area and i look forward

to answering any questions you might have. >> thank you, assistant attorney general caldwell and now mr. demarest. director demarest. >> good afternoon, chairman whooishouse, ranking chair member, senator graham, and senator kunz. thank you for holding this carrying, chairman whitehouse, and i look forward to discussing the progress the fbi has made on campaigns to disrupt and disable our significant botnets that you know that we target. cyber criminal threats pose a very real risk to the economic security and privacy of the united states and its citizens. the use of botnets is on the rise. industry experts estimate botnet attacks have resulted in the overall loss of millions of dollars from financial institutions and other major businesses. they also affect universities, hospitals, defense contractors, government, and even private citizens. the weapons of a cyber criminal are tools, like botnets, which are created with malicious software that is readily

available for purchase on the internet. criminals distribute this malicious software also known as malware that can turn a computer into a bot. when this occurs, a computer can perform automated tasks over the internet without any direction from its rightful user. a network of these infected computers is called a botnet, as you pointed out. botnets can be used for organized criminal activity, covert intelligence collection, or even attacks on critical infrastructure. the impact of this global cyber threat has been significant. according to industry estimates, botnets have caused over $9 billion in losses to u.s. victims and over $110 billion in losses globally. approximately 500 million computers are infected each year translating into 18 victims per second. the fbi with it's law enforcement partners and private sector partners to include the panel of distinguished presenters today from microsoft, symantec, far sight, has had success in taking down a number

of large botnets, but our work is never done and by combining the resources of government and the private 1ek9or and with the support of the public we will continue to improve cyber security by identifying and catch complicated nature of today's cyber threat, the fbi has developed a strategy to systematically identify enterprises and individuals involved in the development and support of schemes impacting the u.s. systems. the complete strategy involves a holistic look at the entire cyber underground ecosystem and all facilitators. the fbi initiated an aggressive approach to dismantle threatening the u.s. economy and our national security. the initiative coined "operation clean slate" is spearheaded by the fbi. our national cyber investigating joint task force with a host of u.s. partners with dhs and private sector. it is a comprehensive

public/private network. targeting the bot infrastructure at the same time that coders or those responsible for creating them. this initiative incorporates all facets of the usg, international partners, u.s. financial sector and other stake holders. again, point out dell secure work is one of the main and we talked about game over zeus. operate clean slate to disgrade the information of victims, to increase the cost of doing business and causing concern of action against them. just a brief description of the successes of late. december 2012, the fbi disrupted an organized crime ring related to butterfly botnet which stole credit card information, bank account and other personal identifiable information. the butterfly botnet comprised

of more than 11 million computer systems and resulted in over $850 million in losses. the fbi along with international law enforcement partners, executed numerous search warrants, conducted interviews and arrested ten individuals from bosnia and henriquez va, new zealand, peru, united kingdom and the united states. all of this not possible without doj's csips in particular. in june 2013, again, the formal debut of "operation clean slate" the team with microsoft and financial service industry leaders disrupted the citadel botnet and facilitated unauthorized access to computers of individuals and financial institutions to steal online banking credit rnls, credit card information, other pii. citadel was responsible for the loss of $half a billion dollars over a thousand citadel domains seized accounting for more than 11 million victim computers word

wide. building on that success of the disruption of citadel, in december 2013, the fbi and euro poll with microsoft and again the opt clean slate team and other partners disrupted ze ra access botnet responsible for more than 2 million computers infected and targeting search results on google, bing and yahoo! and estimated to cost online advertisers $2.7 million each month. again, in april 2014, the team investigative efforts resulted in the indictments of nine members of the enterprise and conspiracy that infected computers known as zeus or jaba zeus a malware that captured passwords, account numbers and other information necessary to log on to online banking accounts. the conspirators allegedly used the information captured to steal millions of dollars of account holding victims of bank accounts. later, june, 2014, yet another

operation by the clean slate team announced a multinational effort to disrupt the game over zeus botnet, the most sfit fist kated. in the u.s. and around the world. this effort to disrupt it involved an impressive cooperation with the private sector, namely dell secure works and international law enforcement. game over zeus is extremely sophisticated type of malware designed to steal banking and other credentials from compute earls it infects. in the case of game over zeus, primary purpose is to capture banking credit rentials and inie or redirect wire accounts to overseas controlled by the criminals. losses attributed estimates to more than $100 million. much like the fbi's other investigative priorities and programs, our focus impacting the leaders of the criminal

enterprises and terrorist organizations we pursue. we are focusing same effort on the major cyber actors behind the botnets. we refeign focused on defending the united states against the threats and welcome the opportunity like the one today to discuss our efforts. we are grateful for the committee's support and yours in particular, senator whitehouse, and we look forward to working closely with you continuing the forge aggressive campaigns against our botnets. >> thank you very much. assistant director demarest, has to be millions of botnets throughout? >> yes. >> one could say so many botnets, no little time. so given that, what are your factors for prioritizing which ones to go after through the clean slate program or just generally? >> so by operation of clean slate for private sector and government and then prioritize the most egregious botnets in the wild we know about so

working with not only government, dhs being principle and friends in the intelligence community, but also, i'll say in the private sector, microsoft being chief, and looking across, you know, the world and those botnets that are seemingly causing the most damage, economic damage or other means or potentially physical damage and then prioritizing those and then developing a campaign about going after not only the infrastructure but the actors behind that botnet or those botnets. >> assistant attorney general caldwell, one of the -- this predates you, but i've had some concerns based on my time in the department of justice as a u.s. attorney about the way in which the department has responded to the botnet threat. i think you're doing a, you know, a good job, but there's cultural divide sometimes

between the criminal prosecutors and the civil attorneys for the government. these cases to take down the botnet tend to be civil cases in nature so i've worried a bit about the extent to which it's instinctive on the part of criminal prosecutors to think that that's a lesser task and a lesser pursuit than what they are doing and whether that gets in the way of adequately pursuing the civil remedies that shut these botnets down. the second is that when the core flood take down took place, it appeared to me that that was kind of an ad hoc group of very talented group of people brought together to address themselves to core flood and succeed at taking it down but once the operation was complete they went back to their individual slots around the country and the effort was dispersed. i think that the botnet problem

is a continuing one. i think as soon as you strip out as mr. demarest said, some of the worst offenders, others pop up into the next most wanted botnet slot an i'm interested first in how you're making sure that this is prioritized despite the civil nature of the legal proceeding that cures the botnet problem, that strips it out of the system and what you've done to try to establish a permanent, lasting institutional presence for taking down botnets without having to reassemble teams each time a botnet rears its head as a target. >> thank you, senator. i think that the game over zeus operation is a perfect example of how we see this going forward. although i wouldn't dispute that there are some criminal assistant attorney generals who may think that the civil attorney vs a less exciting job. we don't see it that way.

the civil component as you indicate is a very critical part of this. but there are different ways to approach botnets. they're all different as you indicated earlier. in game over zeus we used a combination of civil and criminal authorities and i think that's, engrks it isn't one size fits all but i think that's likely what we'll continue to see in the future. as you know the leading perhap ray or the of that particular botnet was indicted criminally and the civil injunctions were obtained at the same time. it was very carefully coordinated. there's a lot of communication between the civil prosecutors who are handling the injunction paper work and the criminal prosecutors who were -- it was really all one time so i think the civil tool's a very important tool and we expect to continue to use it. there are some holes in that tool. right now, we are permitted to get a civil injunction against fraud and wiretapping but as you indicated in your opening remarks, botnets are not always

engaged in wiretapping and fraud and we'd like to see an amendment to the statute to permit injunctions in other circumstances in which we see botnets operating. then on the issue of the institutional knowledge, the computer crime intellectual property section is really -- it really is the receptacle, that's a bad word but where the knowledge is based. that section had a headquarters compone component, field components and institutional knowledge of botnets so if one prosecutor leaves, the knowledge isn't going to leave. we coordinate regularly with the fbi and there's a lot of coordination, there's a lot of coordination with the computer hacking intellectual property network in the u.s. attorney's offices and there is an institutional base of knowledge about be the notnets so -- >> in a nutshell you feel right now that that task has