[House Hearing, 116 Congress] [From the U.S. Government Publishing Office] FIELD HEARING: WHEELING, IL: FLOODED OUT: VANISHING ENVIRONMENTAL REVIEWS AND THE SBA'S DISASTER LOAN PROGRAM ======================================================================= HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTEENTH CONGRESS FIRST SESSION __________ HEARING HELD JULY 19, 2019 __________ [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 116-036 Available via the GPO Website: www.govinfo.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 37-066 WASHINGTON : 2019 -------------------------------------------------------------------------------------- HOUSE COMMITTEE ON SMALL BUSINESS NYDIA VELAZQUEZ, New York, Chairwoman ABBY FINKENAUER, Iowa JARED GOLDEN, Maine ANDY KIM, New Jersey JASON CROW, Colorado SHARICE DAVIDS, Kansas JUDY CHU, California MARC VEASEY, Texas DWIGHT EVANS, Pennsylvania BRAD SCHNEIDER, Illinois ADRIANO ESPAILLAT, New York ANTONIO DELGADO, New York CHRISSY HOULAHAN, Pennsylvania ANGIE CRAIG, Minnesota STEVE CHABOT, Ohio, Ranking Member AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member TRENT KELLY, Mississippi TROY BALDERSON, Ohio KEVIN HERN, Oklahoma JIM HAGEDORN, Minnesota PETE STAUBER, Minnesota TIM BURCHETT, Tennessee ROSS SPANO, Florida JOHN JOYCE, Pennsylvania Adam Minehardt, Majority Staff Director Melissa Jung, Majority Deputy Staff Director and Chief Counsel Kevin Fitzpatrick, Staff Director C O N T E N T S OPENING STATEMENTS Page Hon. Brad Schneider.............................................. 1 WITNESSES Mr. Mike Warner, Executive Director, Lake County Stormwater Management Commission, Libertyville, IL........................ 5 Mr. Howard Learner, Executive Director, The Environmental Law & Policy Center, Chicago, IL..................................... 7 Mr. John Durning, Owner, Pizzeria Deville, Libertyville, IL...... 9 APPENDIX Prepared Statements: Mr. Mike Warner, Executive Director, Lake County Stormwater Management Commission, Libertyville, IL.................... 25 Mr. Howard Learner, Executive Director, The Environmental Law & Policy Center, Chicago, IL............................... 48 Mr. John Durning, Owner, Pizzeria Deville, Libertyville, IL.. 52 Questions for the Record: None. Answers for the Record: None. Additional Material for the Record: James L. Anderson, Director Natural Resources, Lake County Forest Preserve District................................... 60 Christopher Johnson.......................................... 66 Joe Massarelli, Owner, Liberty Auto City..................... 68 Stacy Meyers, Senior Council & Molly Kordas, Staff Attorney, Openlands.................................................. 70 Quin O'Brien................................................. 75 Daniel M. Pierce, President, North Shore Water Reclamation District................................................... 76 David Shimberg, Riverwoods Preservation Council, President... 79 John F. Wasik, Journalist, Lake County Board and Forest Preserve Commissioner...................................... 81 Terry L. Weppler, Mayor, Libertyville Spirit Independence.... 82 FLOODED OUT: VANISHING ENVIRONMENTAL REVIEWS AND THE SBA'S DISASTER LOAN PROGRAM ---------- FRIDAY, JULY 19, 2019 House of Representatives, Committee on Small Business, Washington, DC. The Committee met, pursuant to call, at 10:30 a.m., at Wheeling Village Hall, 2 Community Blvd., Wheeling, IL, Hon. Brad Schneider presiding. Present: Representative Schneider. Mr. SCHNEIDER. The Committee will come to order. Welcome. I want to thank everyone for joining us here this morning. Let me first thank the House Small Business Committee and Chairwoman Nydia Velazquez for allowing us to host today's field hearing here in Wheeling. I also want to thank the staff, the Committee staff, Melissa Jung and Naveen Parmar, who are in the corner, who are here today to help facilitate today's event. As we sit here in Village Hall, let me thank the Village of Wheeling for graciously providing today's location and for the local elected officials, who are in the front row, who have joined us here today. Can I ask the elected officials just to raise your hand? Thank you guys for joining us today. And finally I want to take the prerogative of thanking my team. It is impossible to overstate the amount of hard work that went into making this event today possible, everything from arranging witnesses to logistics to making sure people know about the event. Clearly, by the audience we have today, they effectively got the word out, so thank you all for joining us as well. I will say as far as logistics, yesterday O'Hare was kind of socked in because of the rains. More than 700 flights were cancelled; more were delayed. We can vouch for this because it affected every one of us, including staff. I got to fly into Milwaukee and drive down, but it did give me the chance to show the Committee staff where Foxconn is, where our district is, and they got to drive the length of the Des Plaines River. So again, thank you for that. For everyone in attendance today here, I do want to share some background on how the proceedings are going to work. This is a formal hearing, a field hearing of the House Committee on Small Business. Due to that format, there is not an opportunity for questions or public comments from the audience. I thank everyone for your attendance and interest in the issue. We do have in the back flyers, in the back of the room with instructions so that you can share your thoughts and concerns about the issues today. When we say back of the room, do we mean on the side? In the back of the room. Field hearings play an important role in the work of our Committee. Traveling to Washington and testifying before Congress presents a lot of barriers and costs in time that can oftentimes prevent important voices from being heard. Field hearings like this serve to bring the work of the Committee closer to our districts and offer our communities The Opportunity (2:42Video 1) to share their views on issues that matter. They are relatively rare, so we are very fortunate to have this hearing here today. One of the important local issues is the problem of flooding and the impact on our communities, on people, property, local governments, and of particular interest today, small business. As we will focus on today, the threat of floods has been compounded for our communities here in Illinois and in the 10th District by the massive Foxconn development just over the state line in Wisconsin. This project and its still unfulfilled promises of job creation will push through with great fanfare, including participation by President Trump in the groundbreaking. But missing was any serious environmental review of the consequences of this project. The administration of former Wisconsin Governor Scott Walker dispensed with the extremely critical environmental review requirements in their haste to please foreign investors. Foxconn is a local issue, but it is emblematic of a national problem of vanishing environmental enforcement exacerbating damaging impacts of climate change. We need to address this deficit not just to protect the affected communities but also to ensure the longevity of critical programs such as the Small Business Administration disaster recovery programs that are designed to help people who own, work at, and are served by local businesses. Our communities along the Des Plaines and Fox River Watersheds have long faced flooding issues during significant rain events. Coupled with the effects of global climate change, which is increasing the frequency and intensity of extreme weather events, this threat is growing. Since 2013, Lake County has experienced two 100-year floods, and six of our district's 10 largest storm events on record have occurred since 1994. In July 2017, storms and flooding damaged more than 3,200 homes, resulting in a state of emergency declaration for the region and causing millions of dollars of damage to the community. Today we'll (4:50) Video 1) hear from a small business owner who dealt personally with the flooding. Though the Federal Emergency Management Agency, FEMA, declined to declare a Federal emergency for the region, the Small Business Administration did declare an emergency, making local businesses eligible for disaster loans. For small businesses in the aftermath of a disaster, access to affordable credit can make the difference between remaining in business or closing their doors and putting hard-working Americans out of work. In fact, FEMA estimates that 40 to 60 percent of businesses impacted by natural disasters never reopen their doors. That is why one of the foremost priorities of this Committee is to ensure the Small Business Administration's Disaster Loan Program, which provides direct loans to help businesses, homeowners, and renters rebuild following a federally declared or certified disaster, is functioning efficiently and effectively and that it is prepared to meet the challenges of the future, and in particular climate change. A key part of strengthening the foundation of the program is making sure new development does not make flooding worse. Yet, that is exactly the situation our communities face after important environmental considerations were cast aside in the Foxconn development. Environmental reviews are necessary to understand the potential impacts of a development, and they give the public and government officials the ability to make informed decisions prior to construction and the opportunity to mitigate adverse impacts. Unfortunately, environmental reviews are too often skipped for expediency or as leverage, and that has the potential to exacerbate flooding in places like the Des Plaines River Watershed. When corners are cut on environmental reviews, our local communities pay the price. It puts strain on government programs and resources, and small businesses and homeowners that need vital assistance in the days after a disaster might not be able to access policies or programs enacted for their benefit. This is the case we are facing in Lake County. Foxconn Technology, a Taiwanese electronics manufacturer, worked with former Wisconsin governor Scott Walker's administration on a proposed manufacturing development site outside Mt. Pleasant in the state's southeast corner. In order to entice the company to invest in the state, and based on the promise of up to 13,000 direct jobs in the region, Governor Walker and the Wisconsin state legislature passed the largest incentive package for a foreign company in U.S. history. Included in the package were billions of dollars in public investment through tax breaks and government incentives. But the incentives also included waiving important environmental requirements related to water management and flooding, first by refusing to consider the 3.3 square mile Electronics and Information Technology Manufacturing Zone, the EITM Zone (7:40) Video 1, and associated development within the Des Plaines River Watershed, a major action that the state effectively waived the requirement for a state environmental impact statement. Second, the Wisconsin legislature exempted the development from standard wetland permitting requirements, allowing Foxconn to discharge fill material into non-Federal wetlands. This affects and raises serious concerns about the area's ability to sufficiently absorb rainfall. Storm water that is not retained in local wetlands naturally runs downstream, and thus threatens to cause increased flooding here in Illinois. As well, the state waived certifications on water quality. Several downstream communities in Lake County responded to the development by passing resolutions of disapproval on the Foxconn development. The Lake County Board passed its own resolution of disapproval, and the Illinois state senate adopted a resolution urging Wisconsin to give more rigorous consideration to the environmental impact the Foxconn development would have. Personally, I have written a letter to the new Wisconsin governor, Tony Evers, joined by my colleagues Dick Durbin and Tammy Duckworth, and Congresswoman Lauren Underwood, urging the governor to submit the development to thorough environmental review, especially aspects that threaten storm water management. In response to local concerns, the Lake County Storm Water Management Commission contracted an engineering report to evaluate the potential downstream impact the development could have on local communities. The report raised significant concerns about Foxconn's treatment of wetlands and concluded that just the Phase 1 development would result in storm water and flood plain storage deficit of 30 million gallons. This means that the area around Foxconn will be less able to absorb the deluge, like we saw in 2017, with rainfall running downstream rather than being contained locally. We will hear directly from the Commission on that report later in the hearing, and I thank Lake County for its leadership on this issue. By exempting the Foxconn development from critical environmental review requirements, Wisconsin increased the likelihood of flooding along the Des Plaines River and passed the consequences downstream to our communities. Wisconsin taxpayers may be paying the price for the Walker Administration's exorbitant economic incentives, but it is Illinois residents and small businesses who will be under water, literally, due to our neighboring state's irresponsible decision to ignore environmental reviews, and Wisconsin's missteps will have a direct effect on Federal resources like the SBA Disaster Loan Program meant to help our community. I look forward to exploring the importance of environmental reviews with our panelists today and the consequences of waiving them to expedite development. On a final note, we invited the Secretary of the Wisconsin Department of Natural Resources, Preston Cole, as well as Dr. Lewis Woo, the chief negotiator for Foxconn, to testify at this hearing. Unfortunately, both declined. Again, I want to thank our witnesses for being here today. I will just take a moment to explain how this hearing will work. I will introduce each of our witnesses. Each will be given 5 minutes approximately to make an opening statement that summarizes their written testimony. We will then have time for questions that I hope will help illuminate the concerns that I have mentioned so far. I would like to now introduce our witnesses. Our first witness is Mr. Mike Warner. Mike is the Executive Director of the Lake County Stormwater Management Commission, where he has worked since 1994. He started there as the Chief Engineer for four years and has served as Executive Director for 13 years. He has overseen several significant flooding events and has helped coordinate the country's response. I want to welcome Mr. Warner, as well as his daughter Charlotte. Our second witness is Mr. Howard Learner, the Executive Director of the Environmental Law and Policy Center. Howard founded ELPC in 1993, and the organization served as the preeminent Great Lakes environmental advocacy group. Prior to founding ELPC, he served as General Counsel to business and professional People for the Public Interest and practiced civil rights law focused on housing and economic issues. ELPC has seven offices throughout the Midwest, as well as an office in Washington, D.C., and advocates on a wide array of critical environmental issues. Welcome, Mr. Learner. Our final witness is Mr. John Durning. John is the owner of Pizzeria Deville in Libertyville, a local favorite. John opened his pizzeria in 2014 after more than a dozen years working at Wintrust as a Managing Director focused on commercial real estate. Since opening his small business, John has experienced several major flooding events that cost thousands of dollars in damages to equipment and his property. Welcome, Mr. Durning. Now I will let the witnesses make their opening statements, starting with Mr. Warner. STATEMENTS OF MIKE WARNER, EXECUTIVE DIRECTOR, LAKE COUNTY STORMWATER MANAGEMENT COMMISSION, LIBERTYVILLE, IL; HOWARD LEARNER, EXECUTIVE DIRECTOR, ENVIRONMENTAL LAW AND POLICY CENTER, CHICAGO, IL; JOHN DURNING, OWNER, PIZZERIA DEVILLE, LIBERTYVILLE, IL STATEMENT OF MIKE WARNER Mr. WARNER. Thank you, Congressman Schneider, for arranging this hearing and the opportunity to comment regarding these important issues. Lake County has seen record-setting flooding over the last three years. The July 2017 flood, which you mentioned, set record high water levels on all nine river gauges throughout the county that cost millions of dollars of damage and threatened the lives of many residents and visitors. In 2018, the Des Plaines River gauge set a record by exceeding flood stage six times, which is more than triple the average. And in 2019, a new record rainfall was set for the month of May, and flood stage has been topped four times already this year. The Illinois State Water Survey Research shows this trend of higher rainfall and corresponding flood events is continuing in the region. We recently released a study on the Upper Des Plaines Watershed. The study was done in response to Wisconsin's waiver of environmental regulations for development upstream within the Electronics Information Technology Manufacturing Zone and the impacts of that development to Lake County. The study found significant deficiencies for mitigation of flood plain, storm water, and wetland impacts that is worsening the flood risk within the watershed. The study describes four main conclusions. The current flood plain study for the Des Plaines River in Wisconsin, both the flood plain mapping and flood flows, are grossly underestimating flood risk to existing and new businesses and residential buildings. The flood plain study methodology removed the largest storm event of record and does not include the most recent six of the largest ten strorm events, with the result being an underestimation of the flood plain. The Wisconsin DNR provided similar comment on the Kinnickinnic flood plain study just to the north, and when updated the resulting flood plain, flow increased by up to 86 percent. A study quote states that higher flow results in higher flood profiles and an increase in the computed flood risk in the watershed. Through the development process in Wisconsin, there is a deficit of stormwater storage created by filling existing natural depressions, too large of a retention pond release rate, and uncompensated flood plain fill. Lake County has similar landscape to Wisconsin, with a significant amount of natural depression storage. Whereas Lake County requires preservation of this natural storage, Wisconsin does not. Our estimate of the natural storage to be lost in the EITM zone is 156 acre feet. The detention pond release rate is double that of Lake County, which will further reduce surface runoff stored and allows more impervious cover per acre of development. Additionally, any fill in the flood plain does not require compensation because the Des Plaines River is not a defined flood storage district even though it meets the technical requirements to become one. Wetlands are being lost within the Des Plaines Watershed in Wisconsin due to development. All Wisconsin Department of Transportation impacts are being mitigated outside the Des Plaines Watershed. That ignores Army Corps wetland regulatory criteria regarding mitigating in the same watershed as the impact site and the ``no net loss'' principle, as this is resulting in a significant net loss in the Des Plaines. The private development wetland impacts have yet to be mitigated anywhere, and there is doubt that the mitigation fee assessed can compensate for the higher land value within this highly active development corridor, which further guarantees a net loss of wetland function in the Des Plaines River. There are hundreds more wetland acres at risk of loss in the Des Plaines. And lastly, inadequate soil erosion and sediment control practices are being utilized by both WisDot and private developers. These unremedied violations of the Clean Water Act are choking waterways with sediment and contributing to non- attainment of EPA water quality standards. SMC performed independent inspections of the road work and development site and documented significant soil erosion occurring as late as yesterday, during yesterday's storm event. The Foxconn site also received an erosion violation citation from the Wisconsin DNR. The Des Plaines River at the state line is listed by the Illinois EPA as impaired for sedimentation and siltation due in part to land development activities. With every acre of new impervious surface and shovelful of dirt, all four of the issues raised in our conclusions are resulting in an increased flood risk to businesses and homes, along with negative water quality impacts within the Des Plaines Watershed. It is critical that these concerns are addressed as soon as possible to compensate for future development that will occur. Thank you for this opportunity to provide testimony. Mr. SCHNEIDER. Thank you, and we will now go to Mr. Learner. STATEMENT OF HOWARD LEARNER Mr. LEARNER. Thank you, Representative Schneider, for the Committee's and your invitation to testify today. I will summarize my longer written testimony that will be submitted to the Committee. We appreciate your thoughtful attention to what is a serious problem and your focus on solutions to the problems. Like many, the Environmental Law and Policy Center was very concerned when, under the Walker Administration, the State of Wisconsin rolled back necessary environmental protections and undercut what we view as essential environmental reviews in order to entice private development by a single party here, Foxconn. The harmful impacts of the Foxconn development and the effects of vanishing environmental reviews are not limited to Wisconsin. Air pollution crosses state lines, and the impacts on water also affect Illinois and the other Great Lakes states as well. The Foxconn project could potentially increase flooding in the Des Plaines River Watershed in Illinois, and Foxconn's need for water has already led to a request to withdraw some to outside the Great Lakes Basin. The purpose of environmental reviews, whether it is the National Environmental Policy Act or the Wisconsin Environmental Policy Act, is, first of all, to make sure that all the potentially harmful and adverse environmental impacts are fully considered by decision-makers before they have reached the ultimate decision; second, to conduct a rigorous and objective evaluation of all reasonable alternatives, including a no-action alternative; third, to fairly and fully consider what are called cumulative environmental impacts, so that decisionsmakers are not just looking at one project alone, but what are the effect of multiple activities, and that is important particularly in this case; and finally, engage meaningful public participation, along with some other factors. When Wisconsin weakened its environmental protection laws and limited the environmental review for this project and others, that is unfortunate for Wisconsin residents and its environment and, also, for Illinois and our state's residents. These harmful impacts play out very significantly when it comes to the Foxconn development and the water and flooding issues here in Lake County. And, that, in turn, implicates the Small Business Administration's Disaster Loan Program. Representative Schneider, you recently commented: ``When corners are cut on environmental reviews, our local communities pay the price.'' I agree. Under Governor Walker's Administration in Wisconsin, in 2017, Wisconsin policymakers indeed cut corners when they eliminated or weakened meaningful environmental rules and reviews in several ways. Let me highlight three of the specific problems. First, Wisconsin exempted this Foxconn project from the Wisconsin Environmental Policy Act's requirement that an Environmental Impact Statement be prepared for a major project like this that clearly has major environmental impacts. Second, the Wisconsin legislation exempted this Foxconn project from state regulatory requirements that restrict the filling of wetlands and waterways. In effect, Foxconn can fill in wetlands without a permit. Wetlands, as others have pointed out, act as natural sponges. They prevent flooding, and it also provides valuable wildlife habitat. Third, as you know, the United States Environmental Protection Agency weakened air quality protections in Racine County in southeast Wisconsin, in Kenosha, in a highly criticized decision that is now on appeal to the United States Court of Appeals for the D.C. Circuit, and the Environmental Law and Policy Center is a party in that case. That misguided decision has been the focus of newspaper articles and others that have asserted there was undue political influence on what should be, under the environmental protection laws, and especially under the Clean Air Act, technical scientific decisions. That, too, has an impact both on Wisconsin and on Illinois. So, turning to the first point, the Wisconsin Environmental Protection Act requires an Environmental Impact Statement, and that is part of the process for the public to engage, to comment, and for alternatives and impacts to be fully and fairly considered. For Foxconn, that was avoided. The consequences are not confined to Wisconsin's boundaries when it comes to air pollution and water impacts, as Mr. Warner just testified. Second, on the wetlands, Foxconn was exempted from the permitting process and instead pays into a wetlands fund. That is not sufficient, as the Chris Burke Engineering study for Lake County has explained. When wetlands are filled in, their absorption capacity is reduced and, in some cases, eliminated. If there is going to be a fund, the place to begin spending at least some of the funds is in the places that are affected, namely the Des Plaines River Watershed, both in Wisconsin and here in Illinois. Finally, you noted in your earlier comments that all of this is exacerbated by climate change, and sadly indeed it is. The Environmental Law and Policy Center recently commissioned 18 leading Midwest university scientists to prepare a state-of- the-science report of the impacts of climate change on the Great Lakes region, and their findings are disturbing, chilling, and realistic. The fact of the matter is that we are looking at much more extreme weather, according to the scientists and sound science, more intense rain storms. That is exactly the sort of stuff that leads to more flooding, and that needs to be taken into account by the Committee when it comes to the SBA's Disaster Loan Program. There are solutions that we are advocating, but unfortunately we are looking at more extreme weather, more intense rain storms, and the real-world impact of that is more flooding. So when you look at what has been done on the Foxconn situation, other factors, like climate change, tend to make it worse rather than better. So let me just wrap up with a couple of points. First of all, as the Foxconn experience underscores, Environmental Impact Statements and proper reviews serve an essential purpose, and they shouldn't be cast aside simply because a particular developer is insisting upon a very lucrative package in order to locate in a particular place. At the Environmental Law and Policy Center, we do believe the evidence shows job creation, economic growth, and environmental progress can be achieved together. That is a win-win-win, and there are examples of that here in Illinois, in Wisconsin, and throughout the Midwest. Second, choosing to exempt particular development projects from important regulations and oversight has consequences. Other people in other jurisdictions, such as here in Illinois can be harmed, and the recourse is difficult. That is the Foxconn situation here, with the potential flooding impacts it creates for Illinois. Third, our environment is fragile. Changing air quality and water protections can affect the health and safety of thousands of people and indeed hundreds of thousands of people downwind, downstream, the people in Lake County, and businesses in Lake County, as I know you will hear in a couple of minutes. That, in turn, impairs the already stretched SBA Disaster Loan Program. Thank you for convening this field hearing and for your consideration of my and the other witnesses' testimony today. We would be pleased to address any questions or suggestions you have. Mr. SCHNEIDER. Thank you, and now we will go to Mr. Durning. John, thanks for joining us. STATEMENT OF JOHN DURNING Mr. DURNING. Thank you, Congressman, and the rest of the Committee, for having me in today and sharing our events during this flood. On the night of July 11 and into July 12, 2017, the Lake County and Libertyville, Illinois area received approximately seven inches of rainfall, causing widespread flooding in the area and specifically at my restaurant, Pizzeria DeVille. The cause of the flooding from our research and understanding initially was that it was the result of a freak storm and a local municipal water and sewer system that was antiquated and unable to handle the deluge. Water entered through the sewer line and up through the basement bathroom drains at our place. Through follow-up meetings and discussions, the water/sewer system was only part of the issue, and apparently some of the issue is that the system has not kept up with the ever- expanding development of lot-filling McMansions and other heavy development along the Des Plaines River. While I am no expert on why it flooded, I can share its impact on me and my business. When the flood occurred, my family pizzeria was nearing its third anniversary. To that point I had not ever experienced any real flooding in my business. We had a mop sink back up a couple of times, but that was because of debris that we had left in the drain, no real consequences. What we experienced on July 12, 2017 was four to six inches of black water tainted with human waste and grease from our grease trap floating around my basement kitchen, party room, and into all floor and near-floor equipment and products. I have submitted a video of what I walked into that morning, and I was literally heartbroken. I knew we would be shut down, at least in our basement and prep area, for a few days but didn't fully comprehend what a hassle this was going to be. We acted fast and were able to engage a flood remediation company at a great price to get going on our flood mitigation. Our insurance company, Society Insurance, was also quick to respond. While we were able to get the space mostly cleaned up in two days, my party room was shut down because we needed to remove and replace doors and drywall, among other things, and ensure the space was ready for food preparation. Everyone pitched in and got this done in a timely fashion and we were able to reopen for limited service on my main floor in a few days. Then on August 28th, 2017, it happened again, albeit less water. We still needed to bring in another flood remediation company and pay another insurance deductible. As a small business with sales of about $1,100,000 annually at the time, we lived and operated paycheck to paycheck. Having to absorb the loss of business, pay two insurance deductibles, and have to do so without 60 seats of our private party room and prep kitchen left me feeling helpless. When it happened again six weeks later, you can imagine my thoughts. Obviously, my insurance premiums went up as well. Staff retention was a challenge as we had to scale back for a bit, and nothing was quite right operationally for a few weeks as our mixer was down and we had to make our pizza dough two doors down at a neighboring restaurant. You can imagine how difficult my monthly loan payments to the SBA became during this period, though we never missed or were ever late with our payment. However, the lasting effect of this is also debilitating as there has not been a major rainstorm since that I have not sat awake in bed or driven directly to the restaurant to see if it is happening again. We have seen a few more minor incidents and have come to learn that much of this is caused by an age and capacity issue within our municipal sewer system. Moreover, some of the capacity issues relate directly to new development in the area. Our local municipality has been quick to act and address these issues as best they can, but this does little to ease my mind every time I see big storms on the radar. Many in our community were hit harder than my business, and my heart truly goes out to them. In fact, we subsequently did a fundraising effort for a family that lives near the Des Plaines River in the Vernon Hills/Mettawa area whose home was inundated by the floods. Since that time, new development seems to be moving ahead full steam both up and down the river and around Libertyville and its surrounding towns. Having worked in residential and commercial real estate development in the past and now owning my own small business, I understand the many sides to this complex issue. With that said, I think for the good of all involved, including local businesses, homeowners and renters currently in place and those who would hope to live in new developments, it is imperative that local, state, and Federal officials figure out how to mitigate the larger issues of wetland protection, over-development and sprawl so that those of us who are left to live, work, and raise our families in the area can do so with confidence that the homes and businesses we have invested our life savings into are able to operate and thrive without the threat of catastrophic flooding that nearly eliminated my favorite place, Pizzeria DeVille. Thank you again for letting me come in. I would just add, hearing the experts talk, it makes me more scared, not less, and so I sure hope we can get our arms around this. Mr. SCHNEIDER. John, I couldn't agree more with all that you said, but in particular with the need to address this issue and not just the issue of flooding in the Des Plaines River, which we are focused on today, and the ability to mitigate that, but focus on long-term climate change. I thank everyone for all that you guys do. We will move now into the question and answer. Typically in a hearing, each member on the dais gets 5 minutes, and the Chairman gets the prerogative of taking more time. I am every member and the Chairman---- [Laughter.] So I will ask all the questions. John, I am going to start with you, and we will be a little bit informal. Thank you for sharing the impact on your business. How long were you down in 2017 from the time you had the flood overnight? How long were you out of---- Mr. DURNING. Well, fully down, we were down for a couple of days, because the upstairs wasn't really impacted. What that meant was we had to go through prepping in other restaurants and off site, and it really was quite taxing and expensive for our business to do those things. So we were able to open up partially within a couple of days. But fully, my party room was down for six weeks after that. Mr. SCHNEIDER. Essentially (33:10) Video 1 One of the things that the national data shows (33:13) Video 1 is that businesses are down for a while. The full recovery can often cost not just tens but into the hundreds of thousands of dollars for a business, and it makes it a real challenge. As Mike touched on, we had last year six above-flood-stage events. Over the course of the year, that was a record. This year, as of July 19th, we have had four already, on track for a record. John, back to you. You touched on that every time there is a rainstorm you lie awake at night, and I appreciate that. We have that with our own home. But how does it affect your business decision-making when you think about the implications of the likelihood of another flood? Does it affect your decision-making at all? Mr. DURNING. Absolutely. We have added new racks and new stanchions to put all of our mixing equipment and anything that really sits on the ground up above what the health department requires because we just don't want to go through that again and have to call the guy in Italy to send us a new mixer. It is expensive, it is time-consuming, and it hurts my consistency. So, yes, we have added equipment to address that, and the number of things that go through my head when I see a big storm, it runs the gamut. Mr. SCHNEIDER. And you can just multiply that to every business in the area. Mr. DURNING. Every business, so many of my neighbors, their personal items and personal effects in their homes. I mean, you know, like I said, I feel like we got out of it very easily compared to so many others in the community. Mr. SCHNEIDER. And last question, then we will move to the next topic. Were you aware of the SBA loan program in 2017? Did you apply for a loan? Mr. DURNING. I confess I was not aware of it, I did not apply, and the only comment I would make is that if it is going to be effective, it needs to be very quick to act. Mr. SCHNEIDER. And we are working that. Mike, let me turn to you. We talked about last year was a record at flood level, this year we are on track. But what is the history of flooding in the region, particularly over the last couple of decades? Mr. WARNER. Since 1986, we have gotten a Federal disaster declaration seven times. Ironically, though, the 2017 flood that set the record, we did not get the Federal declaration, but Wisconsin, Kenosha County did, and it is based on population and the impacts. So unfortunately, I think we got about $12 million of damage in 2017, and we needed to get to $18 before we got that declaration. The Des Plaines River has a long history of flooding. The severity and frequency of that has increased, unfortunately. Mr. SCHNEIDER. Thank you. How have local communities responded? The river runs, obviously, from the Wisconsin border through all of Lake County, down through Cook County. How have local communities responded? Mr. WARNER. There has been a significant investment over the years. The Stormwater Management Commission has purchased over 200 flood-prone properties county-wide, and over the next year-and-a-half we have planned another 30. About half of those planned are on the Des Plaines main stem. So we do recognize that because of the amount of water that is coming downstream, buyouts or elevations are really the only or the best tool, I would say, to mitigate the flooding of those homes. Besides the removal of the homes, we have done a lot of work with regard to wetlands. So there is a private-sector wetland bank that just opened on Mill Creek, right at the Des Plaines River main stem, that is only three miles south of the Wisconsin border. There are 80 new acres of wetlands that are available there for sale, and the first credit release was sold exclusively to IDOT and the tollway for impacts in the Des Plaines River Watershed. So our road agencies in Illinois are keeping to that Army Corps criteria of mitigating in the same watershed. I would also like to mention the Forest Preserve District has purchased 8,500 acres of land that they have preserved and protected in the Des Plaines Watershed, and they have also done a significant amount of wetland restoration. They did a 1,200- acre restoration at Rollins Savannah. They are planning another 1,000-acre restoration on the Des Plaines at the Dutch Gap Canal preserve right at the Wisconsin border. And they also did a 300-acre restoration at the Pine Dunes Preserve, and that was in conjunction with the tollway wetland impacts at O'Hare Airport. So we are--there are hundreds and literally thousands of acres of wetlands that we are preserving, protecting, and restoring along the Des Plaines corridor. So it is tough to see all that advancement and then kind of have to see a couple of steps backward that is happening upstream. Mr. SCHNEIDER. I will come back to it later, but part of it is during the assessment, the environmental impact studies, tell us what the impact will be so we can make the adjustments and maintain it. Thank you. I want to just emphasize a point. We are talking about the Des Plaines River Basin because we are talking about Foxconn, but this affects the Fox River in our community as well. We have the mayor of Fox Lake here. So it is not just the Des Plaines River. It affects our entire community, so thank you (5:43) Video 2. Howard, when we are talking about climate change in general, we are talking about global climate change, and we see the effects all over the world, not just here, and it is a global issue. But there are local effects. What are the effects of climate change here in the local region? Mr. LEARNER. This is exactly why the Environmental Law and Policy Center reached out to 18 leading scientists at the University of Illinois, Northwestern, Michigan, Michigan State, University of Wisconsin, Ohio State, the Big 10, and Canadian scientists. The Great Lakes is bi-national. Sorry, I am old school. Rutgers and Maryland, that is not really the Big 10. [Laughter.] Mr. SCHNEIDER. It is the coast to coast conference. Mr. LEARNER. What they have put together this March was a state-of-the-science report on the impacts of climate change on the Great Lakes, and the fact is you are quite right, Congressman, global climate change is global. It is across the planet. Its impacts are felt everywhere, and pollution that comes from Indiana or carbon pollution from Indonesia has largely the same effect on the atmosphere. But the effects are felt differently in different areas. One of the commonalities according to the scientists is the increased intensity of rainstorms. Not only are we going to have more extreme weather events, more tornados, hurricanes, and more flooding, but the intensity of the storms will be more. So when we look at issues involving flooding in Lake County, exacerbated perhaps by the Foxconn development, that comes at a time when the best scientists in our region are telling us we are going to see more rainstorms with more water and more intensity. So this is taking an already challenging problem and making a bad problem worse when it comes to the real world, on the ground, on the water, in the businesses, in the communities, regarding the impacts of climate change, and here the Foxconn development. Mr. SCHNEIDER. Just to put an exclamation point on that issue, two years ago we saw Hurricane Harvey, 50 inches of rain in one location. Houston is still recovering. The 2017 flood here in Lake County, we had seven inches of rain here overnight. That is what caused much of the flooding in the community. And to add insult to injury, you watched the river flooding, and communities like Fox Lake, like Gurney, like Wheeling, just having recovered from a torrential rainstorm and the flood effects of that, watched the rivers rise over the next several days as more water came down. So I think that intensity, we are seeing it consistently across the nation. Mr. LEARNER. Here is what you can deal with; here is what you can't. There are certain things in terms of global climate change here in Lake County, here in your district, Representative Schneider, you can't make a big difference on. But what you can do is, recognizing those changes in weather patterns, is to determine what steps can be taken to help mitigate the impacts on flooding, as you are describing, what steps can be taken to adapt to some of what we know is coming? That is where the Foxconn issue comes in. If you know that global climate change is going to lead to more torrential rainstorms and flooding, as you are describing, then let's do everything that we can at the local level, at the county level, at the district level, to try to avoid making bad problems worse. Let's try to mitigate those problems. Let's try to adapt around it, and let's not do things in terms of waiving environmental regulations as Wisconsin did under Governor Walker for the Foxconn development, to take what we know to be problematic and make it worse. Mr. SCHNEIDER. So that may be a good transition, Mike, locally. What steps can our local communities take to mitigate the damaging effects of these increased frequency and intensity of storms? How do state and local governments' compliance with environmental reviews affect that? Mr. WARNER. Well, the state water survey did just release in March new rainfall analysis for Illinois, and it shows exactly what we have been talking about today, that the rainfall amounts and intensities of the storms are increasing, and it is a trend. So it doesn't stop here, so to speak. They are showing that our rainfall amount for the, so to speak, 100- year storm is increasing up to 45 percent. It is ironic, though, since it is the Illinois water survey, that their study stopped at the Wisconsin boundary. But there is interest from NOAA to pick up their study criteria and apply it on a more regional basis, because we know that that rainfall isn't going to stop at the state boundary. As far as the environmental impacts, I think that if there were proper reviews that were done, I think just the opposite of what happened during that review process. Typically they look at avoidance and minimization of wetland impacts, and I think that is probably a preconceived understanding as to why they waived those regulations, because they wanted to just basically fill all the wetlands that were there and create this development corridor, and that is what has happened. So there is no mitigation that has been done for all the wetlands that have been filled to date within the same river corridor. It is pretty impactful. I would also comment that the amount of depressional storage that is lost--so the landscape up in Wisconsin is very similar to Illinois where the landscape was kind of dotted with these depressional wetland pockets before, now it is a hard surface all the way across, a flat, hard surface, and all that rainfall is just going to wash right off and come downstream. Mr. SCHNEIDER. Thank you. That lays out what we are doing here. But as you said, there is a process that should have been followed. Howard, I will shift to you. What is the purpose of NEPA, the National Environmental Policy Act, and other environmental safeguards? How is it supposed to work? Mr. LEARNER. Let me talk and address your question with regard to NEPA, and then with regard to specific permitting; for example, what the Army Corps of Engineers does in terms of wetlands. NEPA is designed to influence decisions and the decision- making process by requiring the decision-makers to conduct a thorough environmental review before decisions are made, not afterwards in order to post hoc justify a decision already made. The purpose is to make sure that the decision-makers who are involved consider all the relevant environmental factors, including the adverse impacts. Second, rigorously explore and objectively evaluate the alternatives and other actions that can be taken. Third, look at the cumulative impacts of multiple projects, because one project may create a problem, but when there are several projects in combination, it becomes a much larger problem, to the decision-makers have to look at the whole, not just the separate parts in a segmented way. And then finally, engage the public, because as you are conducting this hearing today, decision-makers learn from the public. It is a good exchange of ideas. That is the purpose of the National Environmental Policy Act, and it likewise is the purpose, with some tweaks, of what the Wisconsin Environmental Policy Act provides. So when that process is circumvented, or in this case eliminated, the benefits of that advanced environmental review process in which the impacts can really be fully considered get truncated. Some of that may get done anyway. Somebody may say, well, we looked at some things, but not with the thoroughness, the rigor, the thoughtfulness that NEPA, the National Environmental Policy Act, review process requires. Likewise when it comes to wetlands permitting, there is a set of rules and standards that apply under Wisconsin state law that generally apply under Federal law as well, and that is designed to really look at, when you are filling wetlands: do you have to do it, is there any other reasonable alternative; or if you have to do it, then what do you have to do in order to fully offset, replace, and remedy what you have done? When you circumvent, that can avoid, if you will, wetlands acting as a sponge, soaking up water. By and large, if you fill wetlands, that means water has to go somewhere downstream, and downstream here is northern Illinois. Mr. SCHNEIDER. If I can summarize, I am thinking of my background in business. It is assessment, it is analysis, and then it is decision-making. Mr. LEARNER. That is right. You don't put the cart before the horse, to use a more street term on it. Mr. SCHNEIDER. The metaphor I was going to use is instead of ready, aim, fire, it seems like we did ready, fire, aim. Mr. LEARNER. That would be another good way of putting it, yes. Mr. SCHNEIDER. You can miss it. Mike, at a local level, how do we understand the importance of following the policy rather than the other way around, the consideration for water displacement for large developments like the manufacturing hub we see in Wisconsin, or transportation infrastructure we see with roads up north but also through our own communities? Why is it so important to have that understanding? Mr. WARNER. I would say that our knowledge of wetlands and the functions that they provide have grown over the past few decades to the point where it is a matter of business now, at least in Illinois, that it is understood that if you impact a wetland in this area, in Lake County, Cook County, in an area that is under the regulations of the Army Corps Chicago District, that you are going to have to mitigate for those. So that has driven the private sector mitigation banking community, to the point where we have been able to recapture all of those wetlands that are impacted, within the same watershed as where they are impacted. So I think that is one of the things, one of the big items that is missing in this equation, and possibly a solution is the way the Wisconsin banking instrument is set up and their mitigation policy is---- Mr. SCHNEIDER. Let me pause you for a second just to make sure, this is for me as much (17:24) Video 2 as for everyone else here. When we are talking about the banking instrument, it is not like the bank where we cash a check. We are talking about the ability to bank land that will provide wetlands. Is that what you are talking about? Mr. WARNER. Correct, yes. I should explain that. So the way wetlands are impacted and then filled and credited in other locations is there will be a landowner that creates a huge wetland restoration area, and they can actually sell those credits to someone that impacts them in another location in the watershed. What we are recommending to Wisconsin is that they consider the Des Plaines as its own watershed. Right now they have it grouped in with another watershed so that if you impact in the Des Plaines, you can mitigate for it somewhere else, and that is exactly what Wisconsin DOT did when they created all the new roadways up there. They took jurisdiction over the local roadways where in some cases there is a two-lane country road and they are expanding them to a six-lane road section with pathways on both sides, so essentially almost a seven-lane road section. So it is a huge increase in impervious surface. All of that wetland, all of those streams that were filled are banked or replaced, so to speak, outside the Des Plaines Watershed. So all of that benefit that we had of that wetland to absorb any of that surface water is now gone. That is really the local impact in a different way of how it has looked across the border here in Illinois. Mr. SCHNEIDER. So in very simple terms, we have talked about increased frequency and intensity of storms. We have more water coming from the sky. By filling in land, reducing the impressions, by covering land, making it more impervious, that water volume coming down and going up does fall on the ground. It all has to go somewhere. I will ask the obvious question: Where does it go? Mr. WARNER. It is going into the Wisconsin floodplain and then the Illinois floodplain. Mr. SCHNEIDER. Which is here. Mr. WARNER. Right, which is right next door, just down the street from here. That is one of our biggest--another comment was it is not just harming Lake County and Cook County downstream in the Des Plaines, but they are really putting more businesses and homes at risk in Wisconsin as well, because their floodplain definition up there is very small and very underestimated, in our analysis. Mr. SCHNEIDER. I am going to go to Howard, and then John in a second. Foxconn is a big development. It is huge. You touched on cumulative, a lot of small developments can add up to a big development. But with a development like the Foxconn facility, how should NEPA restrictions apply, and how do we extend that? What should happen in a situation like that? Mr. LEARNER. The cumulative impacts standard under NEPA, the National Environmental Policy Act, requires the decision- makers to not look at the impacts of one project in isolation, albeit a big project in this case, Foxconn, but look at it in the context of other surrounding developments and other activities. So, for example, on the air quality side where the region is teetering on being a non-attainment area for ozone, which it has been in the past, when you add the Foxconn development, a bad problem gets worse. Now, it is not just Foxconn itself. You have to look at the cumulative impacts not just of Foxconn but of other projects that are proposed going forward that both add air pollution problems; or, in the particular case you are raising, also affect wetlands, also affect flooding, also affect downstream communities when it comes to water flowing here in the Des Plaines River Watershed and the Fox River as well. That is what NEPA requires. Mr. SCHNEIDER. So that is the requirement. It is not necessarily what happened. So, John, I turn to you. You talked in your testimony about development going on around our communities. On the one hand, that is good. As a small business, you want more people to buy your pizza. On the other hand, you look to the skies with every rainstorm and say, literally, can I weather this storm? As we are talking about all this, what goes through your head? As you are thinking about planning for your business, I would love to get your take at this point in the conversation. Mr. DURNING. I can't help but think, as I listen, I was just thinking about this, this whole river and pushing the problem down the river is an amazing allegory for so many things impacting our country right now, and time really is that river, and all the problems are getting pushed down to our kids. For me, forget about Pizzeria DeVille and anything uptown and anything else I am involved in. We need to fix this for our kids. That is why we need to get in front of this and do something meaningful for our children. That is my only takeaway from this, and I appreciate you letting me voice my opinion. Mr. SCHNEIDER. Thank you. I appreciate that. Let me go back to Foxconn. We talked a little bit about what should have happened. You may have assessed this, Foxconn's general track record for abiding by environmental regulations, where it is here or--they are a global company. Mr. LEARNER. I think, Congressman, you are aware that there has been a fair amount of media criticism on Foxconn, really in two principal respects: first, Foxconn's environmental performance record; and second, concerns that Foxconn promises a palace and they come back with a bungalow. We have already seen in Wisconsin that when the deal was cut with Governor Walker's administration, Foxconn was asserting, and President Trump was reflecting, many thousands of jobs that would supposedly be created, particular types of video screens that would be made, a lot of manufacturing jobs and so forth. If I understand what is going on presently in Wisconsin with regard to Foxconn, the company is not living up to the promise when it comes to actual performance. Some of the incentives they didn't receive at the end of 2018 because they hadn't delivered on the number of promised jobs. Apparently, Foxconn is now talking about a relatively different facility, more technical jobs than manufacturing jobs, less jobs, and so forth. I was not in the middle of the negotiations with what exactly did Foxconn promise in detail, the documents, and is Foxconn living up to the spirit or the letter of the commitments that were made. Suffice it to say, there is a fair amount of skepticism and concern over whether Foxconn is delivering on what it promised; and second, on its environmental performance and reputation. Certain companies, as you know, develop a track record of strong environmental performance, and when they are dealing with the public and they are dealing with decision-makers, they stand on their track record and they deliver on that performance. Others don't quite have that reputation. Mr. SCHNEIDER. But there were a lot of promises made--this is for both Howard and Mike--a lot of promises made and questions about how now are they being delivered. But in return for those promises, there were shortcuts, waivers, all kinds of things. What decisions, what shortcuts, what was done that is going to have an impact on environmental--or have environmental consequences going forward? Do you have any insights on that? Mr. LEARNER. I think that is what I was summarizing in my testimony. The written testimony goes into far more detail. I didn't think you wanted that much this morning; the 20-minute version as opposed to the 5-minute version. The Committee has the more detailed testimony. But to tick it off in very rapid fashion, number one, Foxconn apparently requested, and the Walker Administration agreed, to waive environmental review under the Wisconsin Environmental Policy Act, and that is the conversation we just had about why you should have those sorts of reviews in advance, and why do you, as you put it, ready and aim before you fire. Second, the various state permitting requirements, when it comes to wetlands as part of the negotiations between Foxconn and Governor Walker's administration, were truncated--that is probably a polite word--at the very least, truncated. Then finally, there have been a lot of concerns raised on how the U.S. EPA did its ozone non-attainment evaluation and certain changes that were made in which FOIA requests showed that certain politicians, in effect, overrode the science technical staff recommendations, and that at least has some linkage, it appears, to Foxconn as well from the added pollution that would come from the plant. So those are three examples. There are others, as well. Mr. SCHNEIDER. Mike, these were decisions, shortcuts that were made, like the county decision to study assessing the likely consequences that might follow. So, a two-part question. Can you summarize again--I know you talked about it in your opening statement--the conclusions from that study? But also I would welcome your opinion, and anyone else, Howard, of had the proper steps been taken in authorizing the Foxconn project, would the outcomes, would the projections of the study have been different? Mr. WARNER. Absolutely. Again, going back to the stormwater storage aspect, the wetlands aspect, and the floodplain issue, we believe that if those processes had been followed, more mitigation would have occurred to offset the increases in surface water. So really, that is what our study focused on, was what kind of flows are we going to see coming downstream from Wisconsin, and how are those going to be increased as development progresses in Wisconsin. So there was a mention that there is a cumulative effect and Foxconn isn't the only development that is occurring upstream. They are a very large one, though, and they do have an effect all on their own. But if you combine that with what is happening in the development pattern that is occurring, what we are estimating right now is that the 100-year flood is going to be where the 500-year flood is right now. That is a rough estimation, but our numbers have been verified by an independent computer model that we have run on those numbers as well. I don't know if I can say it is a good thing, but at least we know where the 500-year flood is at within Lake County, so it is a mapped larger floodplain. But it is significantly higher, and there is more flow, and it is something to be concerned about. As far as one of the waivers that Foxconn was given, they were immediately allowed to fill all their wetlands. We have mentioned that. But they were told they had to mitigate at a 2- to-1 ratio. So they filled in 17 acres of wetlands, and the intent is, and we hope it comes to fruition, that they do mitigate 34 acres somewhere. There is no mitigation that has been done at all for those fills as of now, and we don't think that the fee assessed will really allow them to mitigate a full 34 acres. So right now they are just paper wetlands. They have paid into the fund. They are on paper. Mr. SCHNEIDER. Are those effective at collecting water? [Laughter.] Mr. WARNER. No, not much. Only what you spill on them. So we are missing that resource that has been impacted. Mr. SCHNEIDER. So I just want to, again, confirm my understanding. The 100-year flood doesn't mean that you are going to have this flood once every 100 years. What it means is you have basically a 1 percent chance each year of having a flood at that level. Is that fair? Mr. WARNER. That is correct. Mr. SCHNEIDER. So saying that the 500-year flood is now at the level of the 100-year flood, it means that a flood that had a .2 percent probability of occurring in any given year is now five times more likely to occur. Mr. WARNER. That is exactly right. Mr. SCHNEIDER. So it is not, oh, we had a horrible flood last year, we won't have another one like this again for 100 years. We could have one like this, or five times worse, this year, at a greater percentage. Mr. WARNER. Correct. Mr. SCHNEIDER. And that is the impact. Again, not being lied about, the less capacity the land has to absorb that or to hold that, to retain that upstream from us, means those of us downstream are going to have the impact of that and have to absorb the water we get in our own rainstorms, but also the water that rains on our neighbors as well. Mr. LEARNER. I might sharpen the point just a little bit. Mr. SCHNEIDER. Please. Mr. LEARNER. First of all, the prior assumptions of what is an area with a 100-year flood possibility, a 100-year floodplain, is sort of antiquated at this point. What we are finding in Illinois and around the Midwest, and everywhere, is that those assessments made on the basis of prior weather patterns, for all the reasons we have just discussed with regard to climate change, show far more flooding occurring within short periods of time than one would expect in a true 100-year floodplain. Unfortunately, the Trump Administration actually cut the budget for the evaluations to be done of remapping what floodplains actually are: whether it is a 20-year or 10-year or 50-year or 100-year floodplain. But the old assumptions of something being a 100-year floodplain in many cases are up for question under the new weather patterns. Second, as Mike put it in addressing your question, it is akin to going to a slot machine. If you happen to pull down the arm and get three cherries and you get a jackpot, that has no predictive value on whether the next time you pull that will be the 1 in 1,000, or whether you will go another 999 and you still won't even get to 1,000. Any year is a prediction, and any year can be 1 in 100, or can be 2 in 100. On the other hand, when you start seeing 3 in 100 within a relatively short period of time, that tells you that the assumption that this is a 100-year floodplain is probably no longer valid. Mr. SCHNEIDER. Extending that to floods, I will make the observation--I mentioned Hurricane Harvey. Three of the five most devastating hurricanes on record in the United States occurred in 2017. Mr. LEARNER. That is correct. Mr. SCHNEIDER. So that is, I think, the emphasis, that we are seeing increased frequency and intensity in our storms. So, Howard, Wisconsin, by failing to categorize the Foxconn development as a major action, it allowed the development to effectively skirt the need for an Environmental Impact Study (1:05) Video 3. My question to you is in your view, do you believe (1:07) Video 3 Foxconn should be required to have an Environmental Impact Statement, and can you walk us through the process that would follow from that? Mr. LEARNER. We believe that, yes, Foxconn should have been required to do an Environmental Impact Statement, or that an Environmental Impact Statement, to be more precise, should have been done by the Federal and state decision-makers with regard to the Foxconn development. It is a little bit more complicated today because, in effect, the purpose, as we have been discussing, of the environmental review process is to analyze and examine before you make the decision rather than make the decision and try to somehow fit it in. So it is sort of an interesting question today of if there were to be an Environmental Impact Statement required, how do you go back and seriously reexamine? That said, doing a careful environmental review, albeit late, would be a very positive action here. Mr. SCHNEIDER. Thank you. I am going to wrap up. I have one last question, but I will say this. What we are hearing is an egregious example of shortcuts and skirting responsibilities with Foxconn. As I said in my opening remarks, that is not unique to Foxconn, but this is something that is happening here. Our purpose is, in effect, to discuss the impact and the importance of the SBA Disaster Loan Program in that context, because as this Administration has cut funding for doing environmental studies, as it has cut funding for NOAA to understand weather patterns--I mean, we have seen egregious cuts of funds, and even where Congress has intervened and said, no, you are not cutting those funds, an effort to diminish the capacity of the agencies to do the work they have to do. I will start with you, Howard, but I would like to get everyone's view. Howard, Mike, and John, I will give you the last word on this. How important is the SBA Disaster Recovery Program? It seems to me--I will show you my bias and call the question. I guess it is a leading question. I am not a lawyer, so I can do this. [Laughter.] Mr. SCHNEIDER. It seems that it is going to be increasingly important because businesses are facing a greater probability, an increasing risk not just of a chance of a flood but the significance of a flood. Howard? Mr. LEARNER. You have to look at it, I think, Congressman, in the following way. The SBA Disaster Loan Program is now more essential than ever, both for it to be well funded and for the funds to be deployed in a thoughtful, effective manner. For all the reasons we have been discussing, we are looking at flooding issues and others becoming worse rather than better, and because of climate change, the reliance upon what used to be viewed as a 100-year floodplain in many instances is going to experience more flooding than that might indicate. Of course, the best solution is better planning at the front end so that to the extent that we can have an influence on mitigating, adapting, and avoiding flooding, we are therefore reducing the demands upon the SBA program. So in the case, for example, of global climate change, we should do what we can to mitigate climate change, but we are certainly going to see some impacts of it. But what we can really do is, in situations like the Foxconn situation, is really think about how in advance do you mitigate the impact of, say, the Foxconn development by having good environmental review processes, by having good permitting processes so you reduce the amount of flooding, and by other such actions. And if you do that, then you are reducing some of the pressure on the SBA Disaster Loan Program. So, do what you can at the front end to reduce the pressure on the program. Second, realistically recognize that there are going to be far more demands on the program, and that the program needs full and adequate funding, and that it needs the ability to respond to the very changing situations that climate change is bringing upon us. Mr. SCHNEIDER. Excellent. Mike? Mr. WARNER. I would agree 100 percent that the loan program is essential, and I would say, consistent with our other comments with regard to FEMA disaster assistance programs, I am not aware exactly how SBA takes into account environmental justice areas. So the circumstance that is happening within economically disadvantaged areas is that if they do get impacted by flood, FEMA will come in and at the Federal level will require a cost match typically to do mitigation in those areas. Our comments have been consistent that in economically disadvantaged areas, either that cost match should go away or there should be some type of forgiveness program so they can actually rebuild those areas and not have to come up with a local match that is unattainable. Similarly, on the small business loan situation, if you are in economically disadvantaged areas, there may be more difficulty in being able to pay back those loans and actually recover in those areas. So those are the comments that we have made as Congress has looked at the flood disaster assistance, redoing those programs, and we would make a similar comment with regard to SBA. It is a critical program, but in order to make sure everybody is whole and to actually recover in those economically disadvantaged areas, some indication or some consideration of that should take place. Mr. SCHNEIDER. Great. I appreciate that. John, give me your last word. Mr. DURNING. Yes, sir. I think that is actually a great lead-in, because having spent a lot of time in banking, I think the availability of SBA emergency money is critical, but only if it is hand-in-hand with addressing what causes these problems. When I opened my restaurant, I wasn't able to cut any corners. I had to do exactly what the municipalities told me. I installed state-of-the-art plumbing equipment that was brand new and was going to take care of this problem, and yet I suffer the consequences because someone upstream who is bigger and stronger and mightier didn't have to do any of that stuff. So I think it goes hand in hand. My million-dollar-plus business isn't equipped to be a debt servicing machine. It is just not. I have an SBA loan. I am not real fired up about taking on more debt because I have a family I have to take care of as well. I think it is critical that it is available. It is going to happen more. But we need to go fix some of the other stuff, too. Mr. SCHNEIDER. Absolutely. Well, with that, let me say thank you again to our witnesses for sharing your perspectives during today's hearing. Mr. Warner, I would like to thank you for explaining the threat of flooding in our district and how Foxconn development is poised to make the situation worse. Thank you. Mr. Learner, thank you for illuminating the permitting process of the Foxconn project and laying out the shortcuts taken in environmental review in order to push this development through. And finally, thank you, John Durning, for sharing your perspective as a small business owner dealing with flooding. Your situation is the one that the SBA Disaster Loan Program was created to help, specifically your situation. We need to ensure that environmental reviews are done so that the program is not over-stretched, and we also need to perform outreach so that businesses like yours and others who are dealing with the consequences of flooding know that we have these resources available to help. While there are dozens of hearings each week in Congress while it is in session, field hearings like this are much, much rarer. It is significant that we are bringing the intention of the House Small Business Committee to our district to focus on the issue of flooding and how the waived environmental reviews of the Foxconn project are making flooding in our communities worse. Powerful interests, including as high as the White House, align to support the Foxconn project, but that does not mean the impact on the environment for our communities can be discounted or ignored. We have a right to speak out and ensure the interests of our district are taken into consideration through the environmental review process. More broadly, we need to address this problem of waived environmental reviews to ensure the downstream communities do not fall victim to this reckless development, and that the tools we have created to help, like the SBA Disaster Loan Program, can continue serving our communities. Finally, I want to thank the Committee and my team for their assistance in facilitating this hearing and helping to bring the voices of our community to the United States Congress. Observing that when I am in Washington I get 5 minutes to ask a question, I will also say for the record that I like this format where I get to ask all the questions. [Laughter.] I would ask unanimous consent that members have 5 legislative days to submit statements and supporting materials for the record. Without objection, it is so ordered. And if there is no further business to come before the Committee, we are adjourned. Thank you very much. [Applause.] [Whereupon, at 11:48 a.m., the Committee was adjourned.] A P P E N D I X [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Statement of John Wasik, Member, Lake County Board and Forest Preserve Commission, Member, Lake County Stormwater Management Commission, Lake County Board Energy and Environment and Public Works, Planning and Transportation Committees Tommy: Here is my written testimony for Friday's Congressional subcommittee hearing sponsored by Rep. Schneider in Wheeling. If I find any other businesses who were impacted by the 2017 flooding, I will send them your way. In July 2017, Grayslake and Hainesville businesses and residents experienced catastrophic flooding, causing millions of dollars in damage. It caused disruption and anguish to thousands of people who had never experienced that kind of rain event--more than seven inches in a 24-hour period. It hit all of Lake County hard. While we have no way to predict if such a catastrophic rain event will occur again, we know that climate change is leading to an increase in precipitation--some 20% to 40% more than historical averages. That will lead to severe damage and disruption of countless businesses and residents. Worse yet, since little meaningful flood mitigation was done in Wisconsin when the Foxconn complex was approved, the flooding in Lake County will likely get worse, since we are downstream from that site, which sits on the headwaters of the Des Plaines River. Watersheds respect no state or federal boundaries. As a member of the Lake County Stormwater Management Commission and Energy and Environment Committee, I call upon the federal government to take--and enforce--meaningful measures to prevent future flooding. We also call upon our neighbors to the north to not only undertake meaningful stormwater retention measures, but to do so in the entire I-94 corridor, which is under intense development. In doing so, they will not only be doing the right thing, they will be good neighbors. John Wasik Member, Lake County Board and Forest Preserve Commission, Member, Lake County Stormwater Management Commission, Lake County Board Energy and Environment and Public Works, Planning, and Transportation Committees [email protected] [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]