[House Hearing, 116 Congress] [From the U.S. Government Publishing Office] MOVING AMERICA'S INFRASTRUCTURE FORWARD ======================================================================= HEARING before the SUBCOMMITTEE ON CONTRACTING AND INFRASTRUCTURE OF THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTEENTH CONGRESS SECOND SESSION __________ HEARING HELD FEBRUARY 27, 2020 __________ [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 116-074 Available via the GPO Website: www.govinfo.gov ______ U.S. GOVERNMENT PUBLISHING OFFICE 39-801 WASHINGTON : 2020 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 TROY BALDERSON, Ohio KEVIN HERN, Oklahoma JIM HAGEDORN, Minnesota PETE STAUBER, Minnesota TIM BURCHETT, Tennessee ROSS SPANO, Florida JOHN JOYCE, Pennsylvania DAN BISHOP, North Carolina Melissa Jung, Majority Staff Director Justin Pelletier, Majority Deputy Staff Director and Chief Counsel Kevin Fitzpatrick, Staff Director C O N T E N T S OPENING STATEMENTS Page Hon. Jared Golden................................................ 1 Hon. Pete Stauber................................................ 2 WITNESSES Ms. Lynn Frazier, Director and Senior Transportation Engineer, James W. Sewall Company, Old Town, ME, testifying on behalf of the American Society of Civil Engineers........................ 5 Ms. Lisa Jacobson, President, Business Council for Sustainable Energy, Washington, DC......................................... 6 Mr. Michael Saperstein, Vice President of Strategic Initiatives and Partnerships, USTelecom--The Broadband Association, Washington, DC................................................. 8 Mr. Todd Rothe, President, J.R. Jensen Construction Company, Superior, WI................................................... 10 APPENDIX Prepared Statements: Ms. Lynn Frazier, Director and Senior Transportation Engineer, James W. Sewall Company, Old Town, ME, testifying on behalf of the American Society of Civil Engineers....... 21 Ms. Lisa Jacobson, President, Business Council for Sustainable Energy, Washington, DC......................... 27 Mr. Michael Saperstein, Vice President of Strategic Initiatives and Partnerships, USTelecom--The Broadband Association, Washington, DC................................ 33 Mr. Todd Rothe, President, J.R. Jensen Construction Company, Superior, WI............................................... 39 Questions for the Record: None. Answers for the Record: None. Additional Material for the Record: Letter from Associated Builders and Contractors.............. 44 MOVING AMERICA'S INFRASTRUCTURE FORWARD ---------- THURSDAY, FEBRUARY 27, 2020 House of Representatives, Committee on Small Business, Subcommittee on Contracting and Infrastructure Washington, DC. The Subcommittee met, pursuant to call, at 1:07 p.m., in Room 2360, Rayburn House Office Building. Hon. Jared Golden [chairman of the Subcommittee] presiding. Present: Representatives Golden, Stauber, and Balderson. Chairman GOLDEN. Good afternoon, and sorry for the delay. Just coming from some testimony with the Secretary of the Navy. So, it kept me a little bit long. But my good colleague and friend, Congressman Pete Stauber, I thought he was going to say that I owed him dinner or drinks or something for being late when he told me I had a text message waiting for me just now. But anyway, I appreciate your patience. Good friend. Congressman Stauber actually came to Maine, and I have been to his district as well. And I just point that out because the first person testifying, I will introduce today, Ms. Frazier is actually from Maine, so you can tell her you have been to the district. Well, thank you all for your patience for coming to testify today. Whether it is the roads, rails, bridges that we use to transport our goods, the utility systems that power our factories, or the telecommunications networks that connect consumers to businesses, maintaining America's infrastructure is fundamental to a robust economy and to the Nation's competitiveness. Historically, America's infrastructure network has fostered strong economies and allowed us to be both competitive and efficient. However, by many measures, we are failing to keep up with the growing demands of our modern society. Across the U.S., years of underinvestment in our infrastructure has resulted in crumbling roads, bridges in need of repair, rolling blackouts, and communities that lack access to high-speed Internet. Failure to invest in our infrastructure has serious economic consequences, including lower GDP growth, lost business sales, and fewer American jobs, especially for small businesses. Which is why we have a plan that has been brought forward by House Democrats in the House, a 5-year, $760 billion proposed investment in infrastructure, the ``Moving Forward Framework'', and it merits attention today. We know that investments in infrastructure contribute both directly and indirectly to economic growth. Infrastructure investment reduces business costs, it increases consumer spending, and it lays the foundation for a clean energy economy. It is also a critical component to the success of small businesses and the communities they serve. This is especially true in the energy sector. In 2018, clean energy jobs totaled more than 3.26 million and nearly every state in the U.S. has seen an increase in the clean energy economy. America's small businesses have been driving this growth, with nearly 70 percent of clean energy employees working for small businesses. A commitment to investing in renewable energy sources, such as wind, solar, biomass, is an investment in our Nation's small businesses and their employees. Similarly, a robust and well-planned investment in our infrastructure benefits small businesses, both as end-users of these networks and by creating business opportunities for them. Let's take access to rural broadband, an issue I have been working on with my friend, the Ranking Member, Mr. Stauber, and a key component of the Moving Forward Framework. 2.5 million Americans, including 37,000 individuals in my home district in Maine, do not have access to a high-speed Internet connection. In fact, only 5.5 percent of households in Maine are connected to a fiberoptic network. We know that economic growth is tied to access to broadband--especially for small businesses. Small firms that have access to high-speed Internet earn twice as much revenue per employee, guarantee four times the revenue growth year- over-year, and are three times more likely to create jobs. Finally, I think we all agree that we need to enact policies that create jobs right here at home, and we know that small firms dominate sectors of the economy, such as construction, manufacturing, and engineering. These small businesses play in integral role in upgrading our roads, ports, bridges, airports, and electrical grids. In fact, 61 percent of the jobs directly created by infrastructure spending would be in the construction sector, and 12 percent in the manufacturing sector. These would be high-paying jobs on Main Street that cannot outsourced. While there are many details to discuss, it is my hope that today's hearing can help identify how investments in infrastructure, especially in surface transportation, clean energy, and rural broadband, will benefit small businesses and the economy overall. And with that I thank each of the witnesses for joining us today. I look forward to your testimony. And I will now yield to the Ranking Member, Mr. Stauber, for an opening statement. Mr. STAUBER. Thank you very much, Mr. Chair, for holding this timely hearing on an important issue which is our Nation's infrastructure. Businesses and families across America rely on increasingly complex transportation systems, electric grids, and Internet networks to stay connected and competitive. As a member of this Committee and the House Transportation and Infrastructure Committee, I am keenly aware of the significant impacts of even the smallest disruption to these systems. Communities across the country look to us as their elected representatives to advocate for local projects. Earlier this month, the United States Department of Transportation approved a $10.5 million grant to the Duluth Seaway Port Authority to help fund the Duluth Port Logistics Hub 2020 Revitalization and Expansion Project, which will repair terminal components and enhance capacity for both domestic and international shipping. These improvements will bring significant savings and market opportunities for local small businesses, especially those in manufacturing and agricultural industries. In addition to repair projects, many communities across the country are waiting for the installment of broadband networks. Once considered a luxury, broadband is now a critical component of modern infrastructure. Last year, you and I, Mr. Chair, held a hearing in Scandia, Minnesota, to hear from rural small business owners challenged by unreliable access to broadband. You and I realize that rural people living in Maine and rural folks in Minnesota share the same burdens and have since worked together to explore Federal strategies to bridge that digital divide. The health of our Nation's infrastructure impacts us all regardless of geography or political affiliation. Our shared experience has inspired bipartisan sentiments, but it is time for us to take action and make desperately needed repairs and reforms. I appreciate all the witnesses being here today, especially Mr. Rothe, who hails from the great 8th District of Minnesota. And I look forward to hearing your remarks. You are all an integral part in helping us ensure the government is helping, and not harming, our small business community. Thank you, Mr. Chair, and I yield back. Chairman GOLDEN. Thank you. The Ranking Member and I both agree that this is a very bipartisan issue. Everyone knows that this is something that needs to be done. Even people who are not even the slightest bit political at all. With that, I want to take just a quick minute for everyone who is testifying to explain timing rules. Each of you will get 5 minutes to testify. The members will then get 5 minutes for questions. There is a lighting system to assist you. I am sure someone has gone over this with you, but sometimes we forget. So, if you see someone waving at you, you have probably failed to turn on the button in front of you so that your microphone is on. The green light will be on when you begin. A yellow light comes on when you have 1 minute remaining, and the red light comes on when you are out of time, and we ask that you do the best that you can to stay within this timeframe. And now I would like to introduce witnesses. Our first witness is Ms. Lynn Frazier. She serves as the director and senior transportation engineer for the James Sewall Company, a 138-year-old integrated multidiscipline consulting firm providing services to government, energy, and utilities and the forest products industry in Old Town, Maine. Ms. Frazier currently sits on the board of the Maine Chamber of Commerce and is a past-president of the American Society of City Engineers in Maine. She holds her undergraduate degree from the University of Maine. Welcome, Ms. Frazier. Our second witness is Ms. Lisa Jacobson. She is the president of the Business Council for Sustainable Energy, a trade association representing energy efficiency, renewable energy, and natural gas industries. In this capacity, she advises states and Federal policy makers on energy, tax, air quality, and climate change issues. She is also a member of the Department of Energy's State Energy Efficient Steering Committee and the United States Trade Representatives Trade and Environment Policy Advisory Committee. She holds an undergraduate degree from the University of Vermont, and a master's degree from the London School of Economics. Welcome, Ms. Jacobson. Our third witness today is Mr. Mike Saperstein. Did I get this correct? Very good. He is the vice president of Strategic Initiatives and Partnerships at U.S. Telecomm, a trade association representing telecommunications-related businesses in the U.S. In his role he focuses on new and emerging technologies amid a shifting regulatory landscape. In his previous role as vice president of Policy and Advocacy, he worked to promote broadband infrastructure projects, such as the Rural Digital Opportunity Fund. He received his undergraduate degree from the University of Notre Dame and his J.D. from the Catholic University of America, Columbus school of Law. Welcome, sir. Thank you for joining us. And I will yield to Mr. Stauber to introduce our final witness. Mr. STAUBER. Thank you, Mr. Chair. Our final witness today is Mr. Todd Rothe. He is the president of J.R. Jensen Construction Company. Todd has led the company since 2004 and has nearly 30 years of construction experience. And under his leadership, J.R. Jensen has grown from less than $5 million in annual revenue to more than $25 million, ranking it among the largest and most successful contractors in our region. Todd has helped foster improvements at J.R. Jensen's culture that have led to excellence in safety, performance, and customer satisfaction. Todd earned a bachelor's degree in Business Administration from the University of Minnesota-Duluth, the best college hockey team in the Nation. It is a privilege to have a constituent on the panel today, and I appreciate you for making the journey from Northern Minnesota. Mr. Chair, I yield back. Chairman GOLDEN. Thank you very much. Ms. Frazier, you are now recognized for 5 minutes. STATEMENTS OF LYNN FRAZIER, DIRECTOR AND SENIOR TRANSPORTATION ENGINEER, JAMES W. SEWALL COMPANY; LISA JACOBSON, PRESIDENT, BUSINESS COUNCIL FOR SUSTAINABLE ENERGY; MICHAEL SAPERSTEIN, VICE PRESIDENT OF STRATEGIC INITIATIVES AND PARTNERSHIPS, USTELECOM, THE BROADBAND ASSOCIATION; TODD ROTHE, PRESIDENT, J.R. JENSEN CONSTRUCTION COMPANY STATEMENT OF LYNN FRAZIER Ms. FRAZIER. Chairman Golden, Ranking Member Stauber, and members of the Subcommittee, thank you for inviting me today for this important discussion on the Nation's infrastructure and how it impacts small business. My name is Lynn Frazier, and I am a civil engineer based in Enfield, Maine, the past-president of the American Society of Civil Engineers' Maine Section, a member of the Board of the Maine Chamber of Commerce, and director of business development at James W. Sewall Company. Today, I am appearing on behalf of the more than 150,000 members of the American Society of Civil Engineers (ASCE). I appreciate the opportunity to share our position on the importance of long-term, strategic investment in our Nation's infrastructure. Every 4 years, ASCE publishes the Infrastructure Report Card to raise public awareness. Unfortunately, the most recent report rated the overall condition of the Nation's infrastructure as a D+ and found an investment gap of $2 trillion. As our infrastructure continues to age, and investments fail to keep pace, this national gap is only widening every year. At the state level, Maine's latest report card found that our infrastructure fares only slightly better than the national average, with the state receiving a cumulative grade of C-. Ranking Member Stauber, your state of Minnesota fares slightly better yet with their most recent report card grading the state's infrastructure with a C. Several years ago, ASCE embarked on an effort to examine how this persistent D average is impacting America's economic future. The resulting report, our Failure to Act series, found that failing to close our Nation's $2 trillion investment gap creates devasting economic impacts for families, small businesses, and the Nation's overall GDP. Simply put, this analysis confirmed what we already know intuitively. Water main breaks, bridge closures, road postings, and the occasional blackout are not just inconvenient, they are a drag on economic growth. More specifically, our economic analysis found that by 2025, infrastructure will continue to degrade, resulting in a loss of 2.5 million jobs, $3.9 trillion in GDP, and $7 trillion in lost business sales. Additionally, our poor infrastructure cost American families $3,400 a year. That is $9 a day. This is a hidden tax that we are all paying when we do not address our infrastructure needs. In Maine, under investment in infrastructure like rail has economic consequences for previously prosperous papermill towns where economic development is desperately needed. For example, the region's freight connection to New York is limited to 10 miles an hour in the Penobscot River Valley, forcing the few businesses in the area to ship via truck. This makes the region less desirable for other manufacturers, increases wear and tear on our roadways, and increases congestion. On a more positive note, over the past several years, Maine has made significant, strategic investments in its ports, which is paying dividends. Due to these investments, 6 years ago, Eimskip, Iceland's oldest shipping company, made Portland its U.S. headquarters, a move that has grown the amount of exports going through the port each year and created many well-paying jobs. And there are similar stories in every district across the country. So how can we raise the grades and curtail the negative economic impacts? ASCE believes that Congress should adopt infrastructure legislation that fixes the Highway Trust Fund, eliminates the cap on the passenger facility charge, puts trust back in the Harbor Maintenance Trust Fund, and addresses both resilience and the total lifecycle cost of an asset. Recent proposals and legislation in the House and Senate hit on many of those priorities and we strongly hope that they will result in bipartisan legislation this year. Unfortunately, none of these proposals seriously addresses the Highway Trust Fund. The gas tax has not been raised in nearly 30 years and its purchasing power has diminished significantly over the intervening years. Can you imagine living off your 1993 salary? It would not get us very far. As a result, the Highway Trust Fund will be exhausted in 2022, grinding critical road and bridge projects to a halt. Therefore, over the next 5 years, ASCE recommends a 5 cent a year gas tax increase indexed to inflation. This proposal is supported by a wide coalition of groups, including the U.S. Chamber. To ensure the Highway Trust Fund remains sustainable as more electric vehicles come online, ASCE also recommends creating an EV tax to account for their wear and tear on highways. Finally, ASCE urges Congress to establish a national pilot program to better understand how a mileage-based user fee could be implemented in the longer term. In conclusion, underinvestment in our infrastructure risks our economic future and the quality of life of all Americans. It is the goal of everyone in this room to make sure America remains competitive in a growing global economy. But we cannot do that if we cannot commit to building and maintaining a first-class infrastructure. I would like once again to thank the Committee for inviting me to participate in today's hearings, and I look forward to taking your questions. Chairman GOLDEN. Thank you, Ms. Frazier. Ms. Jacobson, you are now recognized. STATEMENT OF LISA JACOBSON Ms. JACOBSON. Chairman Golden, Ranking Member Stauber, and members of the Subcommittee, thank you for the opportunity to testify today. I would like to express the Business Council for Sustainable Energy's appreciation for the leadership of the Subcommittee and its strong bipartisan support. Investment in American infrastructure will improve the Nation's economic competitiveness, it will increase our national security and resilience, and has the potential to create tens of thousands of jobs. Small businesses comprise more than 99 percent of U.S. companies and employ over 47 percent of the American private- sector workforce. As the clean energy economy continues to grow, so too will the impact of small businesses in these sectors. BCSE is a coalition of companies and trade associations representing energy efficiency, natural gas and renewable energy. The council is pleased to have an independent initiative under its banner, Clean Energy Business Network (CEBN). CEBN represents small- and medium-size businesses in these industries. Together, BCSE and CEBN represent a broad scope of the clean energy economy, from Fortune 100 companies to small businesses working in all 50 states and over 350 congressional districts. On a national basis, the energy efficiency, natural gas and renewable energy sectors support over 3.2 million U.S. jobs, and it is estimated that 70 percent of these jobs are in small businesses. To set the context for the policy perspectives offered in my testimony, I would like to present some of the findings of the 2020 Sustainable Energy in America Factbook. The Factbook is a report produced each year by the Business Council for Sustainable Energy and Bloomberg New Energy Finance. Now in its eighth year, the report released earlier this month, details the significant transformation of the Nation's energy sector, with a special look at the last decade. A complementary compendium from Clean Energy Business Network, entitled Faces Behind the Facts, highlights some of the small- to medium-sized clean energy entrepreneurs who are helping to drive this transformation. The 2010s was a rapid period of change in the energy sector, and particularly for the portfolio of energy efficiency, natural gas, and renewable energy. During the last decade, the U.S. economy experienced sustained economic growth, increased energy productivity, falling greenhouse gas emissions, and low energy costs for consumers. Further, in the 2010s, renewable energy and energy- smart technologies expanded and attracted $390 billion in investment in the United States, with a record-breaking $55 billion in investment in 2019 alone. Shifting to the Moving America and the Environment Forward framework, as well as other proposals put forward by the Trump Administration and Republicans in Congress, BCSE appreciates all of these initiatives' recognition of the energy system as a critical infrastructure asset. We also support consideration of climate change and resilience as part of these proposals. The framework we are looking at today includes many important areas. Specifically, (1) Siting, permitting, and regulatory reforms. Streamlining of siting and permitting processes for electric and natural gas infrastructure, hydropower projects, energy storage, and materials management is critical. Second, Resilient Infrastructure Investments. BCSE supports pre-disaster investment to enhance the resilience of critical infrastructure, as well as reforms to Federal regulations that enable projects to ``build back better.'' BCSE has also worked at the local level in Texas and Puerto Rico as a partner in the Readiness for Resilience project. These experiences confirm our view that infrastructure planning and investment should consider opportunities to enhance resilience and support public private partnerships. Third, Clean Energy and Energy Efficiency Infrastructure Investments. The framework includes several areas to accelerate the deployment of clean energy technologies and resources in the energy, transportation of broadband and buildings sectors among others. Finally, Infrastructure Financing Tools. To catalyze the capital investments needed in U.S. infrastructure, Congress should seek to strengthen and expand existing financial tools and consider new mechanisms. These tools should catalyze and leverage private sector investment. Energy Savings Performance Contracts, bonding authority, and other tax measures should be considered. Further, programs should include municipal infrastructure assets. This spans waste, water, transportation, lighting, and energy infrastructure. The last decade has demonstrated that energy is critical infrastructure. Further, the U.S. energy economy is undergoing fundamental transformations that are powered by a robust, affordable, reliable, and clean portfolio of commercially available energy resources. Thank you very much. Chairman GOLDEN. Thank you. Mr. Saperstein? STATEMENT OF MICHAEL SAPERSTEIN Mr. SAPERSTEIN. Chairman Golden, Ranking Member Stauber, and other distinguished members of this Subcommittee, I appreciate the opportunity to testify at this important hearing on how Federal infrastructure investment can support small business job creation and increase connectivity in the United States. My name is Mike Saperstein, and I represent USTelecom, The Broadband Association, the Nation's premiere trade association for broadband providers, suppliers, and innovators bringing high-speed Internet and future-focused connectivity to families, communities, enterprises, and small businesses. USTelecom shares Congress's goal to connect every single American to the Internet. A meaningful infrastructure bill will do the following things: Support robust and targeted broadband deployment via direct funding; promote public-private partnerships; and also make regulatory changes to remove barriers to broadband deployment. By investing in America's broadband infrastructure today, Congress can set the foundation for generations of commercial growth. Many members of our association are actually multi- generational local business with a history of entrepreneurship and innovation. Silver Star Communications, a service provider in Wyoming and Idaho is one such small business that traces its roots to 1948 when they connected rural farmers via telephone wires riding on barbed wire fence. Infrastructure and technology may have changed, but today that small business serves nine rural counties across 17,000 square miles and was the first provider in the state to deliver gigabit Internet service to residential customers over a fiberoptic network. My point is this: small companies and digital connectivity businesses are not mutually exclusive. In fact, modern economic opportunity is fundamentally dependent upon access to the greatest American innovation of the past century, the Internet. With 50 percent of small businesses based out of the home, we have an imperative to enable the next generation of entrepreneurship by making sure all Americans have access to broadband wherever they may live or work. Broadband is as critical to America's global competitiveness as reliable roads, bridges, waters, and energy. With our current limited resources, we are mindful of the tradeoffs between investing in futureproof but more costly networks and ensuring that all Americans have a baseline level of connectivity. The $80 billion proposed in the framework for broadband deployment would fundamentally alter this calculation and provide a future proof network in many areas of the country where this was previously unattainable. Choosing trusted partners that have a history of successful broadband deployment, like the framework proposes, is the most effective way to bridge the digital divide and can be accomplished on the macro and micro level. The FCC, as the expert agency, has taken on the challenge of universal broadband service and enlisted the help of experienced service providers to do so. On a local level, we have seen communities taking innovative approaches to enhance their connectivity. Last year, the town of Brooklyn, Maine, and Consolidated Communications, developed a public-private partnership to share costs and creatively tackle broadband deployment to the coastal community, resulting in significantly faster and more reliable broadband connectivity. Federal broadband funding should be targeted first to the areas of the country truly unserved by broadband and not used to construct duplicative networks that overbuild a provider's existing infrastructure. We commend this Subcommittee for already holding a hearing on broadband mapping this Congress to help identify who is served, and more importantly, who is unserved in this country. USTelecom also commends the framework focus on adoption, digital equity, as well as the next generation 911 services so our emergency response networks are as accessible, efficient, and effective as possible. While direct broadband funding is critical, Congress, states, localities also need to focus on modernizing existing regulations to speed infrastructure deployment. Common sense but necessary reforms include better access to railroad crossings, just and reasonable access to utility poles owned by municipalities and cooperatives, and a sensible approach to rights of way access. Emerging 5G technology will drive economic growth and job creation in the years ahead, unleashing a wave of new innovation that we cannot yet imagine. Rural 5G connectivity cannot exist without a ubiquitous fiber network, and the faster we can deploy the fiber, the better. The moving forward framework would be a tremendous boost to our Nation's broadband infrastructure. USTelecom and its member companies, stand ready to work with this Committee, Congress, and the administration to continue making significant steps to close the digital divide. Thank you for this opportunity. Chairman GOLDEN. Thank you very much, sir. And finally, Mr. Rothe. STATEMENT OF TODD ROTHE Mr. ROTHE. Mr. Chairman and honorable members of the Subcommittee, thank you for this opportunity Mr. Chairman and Honorable Members of the Subcommittee, thank you for this opportunity to provide my testimony about the impact that infrastructure spending has on my firm, J.R. Jensen Construction Company. Located in Superior, Wisconsin, we live in the border community known as the Twin Ports with Duluth, Minnesota. We employ 80 full-time, union employees. The markets we serve are industrial, energy, and commercial construction. Our industrial markets include agriculture and grain handling, such as CHS; mining, Cleveland Cliffs; minerals processing, Graymont; and transportation, including railroads such as BNSF. For the energy sector we build facilities for clients operating regional pipelines, such as Enbridge; Superior's oil refinery, Husky Energy; and electric power utilities, such as Minnesota Power. Our valued clients often hire us as well to perform work throughout the Midwest and the 12-state region. While most of our infrastructure work would be considered private spending, we have received contracts as both a prime contractor and subcontractor to Federal agencies, including the US Army Corps of Engineers, Coast Guard, and others. We have worked for a variety of similar state and local governments as well. So, we have experienced first-hand the tremendous, positive economic and social impacts that infrastructure brings, whether it is private or public. And construction firms like us rely upon a steady stream of projects. They are not just temporary jobs. People often talk about the ``ripple effect'' of such spending, and I can assure you it is real, and it is significant. So today I would like to share with you some examples that we have personally observed in our small business in Superior, Wisconsin. These are positive results directly connected to infrastructure spending. Additionally, we do make a point with our contracts to buy local services and buy products made in the United States whenever possible, which again indicates the indirect and broader impacts as well. So, construction projects are being accomplished with three main things: labor, materials, and equipment. I have organized my examples accordingly. 1. Labor. Supporting Employees with Great Jobs. People are an company's greatest asset, and ours is no exception. Good wages, actually high-paying wages and benefits help people to support their families, pay their taxes, and be able to improve their lives. We work in a part of the country that generally has brutal winters, and yet, we are outdoors loving people. So, think of the things we buy, such as pickup trucks, both popular, both necessary, and common. Most of those come from Michigan. Snowmobiles and ATV's, there is a Polaris factory and an Arctic Cat factory right in Minnesota. Boats are made in Minnesota, the Land of 10,000 Lakes. Lund, Alumacraft, Premier Pontoons, all made in Minnesota. Ice Castle fish houses for this time of year made in Montevideo, Minnesota. Campers, trailers, and RV's come from Northern Indiana. So, the list of things that people buy goes on and on, and each of these I have mentioned contains steel. Mining in Northern Minnesota not only provides great jobs; it continues to produce the iron ore needed to make the steel that end up in these products. Proposed mines such as PolyMet and Twin Metals are on the table now and trying to get permitted. Those are needed and important. Minnesota has one of the largest deposits of copper and nickel needed to safely and responsibly mine and use these important minerals. The green economy needs these minerals to make solar panels and windmills and copper wiring, tubing, catalytic converters, batteries, and more. Why should these minerals not come from the United States? Spending on materials and supplies is the second component of projects. So, for many of our projects, materials are the largest part of the budget, and these purchases create big impacts. Wood and lumber, forest products industries; steel, rebar, piling, pipes, structural beams, plates, you name it, mines. Benefitting mines and U.S. steel mills, scrap recyclers. Pre-engineered metal buildings are made in Butler fabrication plants throughout the U.S. Concrete and cement plants, all their raw materials from places such as Alpena, Michigan. Asphalt for roads and highways; fuel for vehicles and equipment, all produced by local by local refineries. The list goes on including all the temporary utilities and power and water and various things like that. The last one being spending on equipment. Companies like ours have to invest in equipment to stay competitive and productive. So, think of major American manufacturers, including John Deere, Caterpillar, and even Minnesota's Bobcat. Section 179 allows these attractive tax rules to better plan and make these purchases, so we thank you for that. It is working. And then, finally, if we meet our budget, the project yields a profit. And this is a bad word to some people, but anyone in business knows that it exists and without it, we will not survive. Our firm has been successful. That allows us to give back to the community. So, we upgrade equipment, reinvest our profits, all this to better serve our clients, improve what we do, and make sure we continue to offer a great environment for our people to work. I think you have a good example there. In conclusion I think, you know, let's work together in moving America's infrastructure forward, and I hope I have demonstrated it is a truly significant means toward a larger goal of moving American forward. Thank you. Chairman GOLDEN. Forest products, harsh winters, snowmobiles and ATVs, that sounds familiar. Mr. STAUBER. Hockey. Chairman GOLDEN. Hockey as well. That is right. University of Maine; right? You played hockey there. Mr. STAUBER. And we beat them. Yep. Chairman GOLDEN. And you won. We are going to move to questions now. Thank you all very much for your important testimony. I will start with 5 minutes myself. Ms. Frazier, I sat on the Transportation Committee in Augusta. We had people talk about a $160 million highway budget shortfall in the state coffers with a plan in the last administration to try and bond our way out of it, $100 million at a time over 10 years and that would not even fill the gap. We decoupled from inflation adjustments years ago losing tens of millions of potential dollars to invest and politically people are just I think scared to have this conversation, even though organizations like the Chamber of Commerce and Maine Motor Transportation Association, I am sure the American trucks as well are talking about the need to address the revenue side of things. I feel like as a general strategy it was lacking to bond because now, we are paying interest, right, rather than just paying for it upfront. It is actually more expensive, just kind of kicking the can. So hopefully we can find the will to do something here. But I did want to ask you a little bit about freight rail, which you brought up. Ten miles per hour, I am well aware of that in the Penobscot River Valley. Huge problem. But freight rail all over the state lacking in a big way. Do you have any idea what the dollar figure is to try and get us competitive, or any examples of specific businesses that have been hurt as a result of the lack of investment? Ms. FRAZIER. Yes. So interestingly, a lot of the freight rail portions are privately owned, so it is not even as much of a funding gap that is the problem; it is a policy discussion that needs to be had. And letting people know where our priorities are and that we need to work with them, and if it is providing matching funding, to just get those rails and let them know that it is important to us. As far as businesses being affected, I live in Enfield, and not so long ago, I think April of last year a large train with a full load of timber tipped over right near the main roadway so, you know, the road was closed. It just disrupts everything. And it is not like they were going more than 10 miles an hour, so. Chairman GOLDEN. Yeah, no, it is a big problem. I appreciate that very much. And there are tax credits and things, but obviously, a conversation needs to be had. Ms. FRAZIER. Definitely. Chairman GOLDEN. Some of those people are not stepping up and we have got to find a way to do more. Some people talking to me recently in Maine about the idea of building a facility at the airport in Bangor where they could house lobsters coming off the coast so that we could be quicker to market, you know, those types of potential projects at airports. What do you think? Ms. FRAZIER. I think that is great. Yeah. Anytime we can leverage private funding to help with that and really boost our economy and export our goods, sure. Chairman GOLDEN. Yeah, I appreciate that feedback. Just moving on real quick, Ms. Jacobson, you said that Maine ranks fourth in the country in percentage of instate energy generated from renewable energy, yet we rank almost last for total energy generation as a state. Very oil dependent. You know, we are happy that we are doing things like solar, wind, and others. But you talk a little bit about natural gas as well. We have a bit of an infrastructure problem there. I just want to get your thoughts on how we could do better in terms of energy generation without hurting that. I mean, it is very nice to be number four in producing renewable energy right at home. So, what can we do? Ms. JACOBSON. Well, I commend you on that and, you know, our data also shows I think over 77 percent of your generation currently coming from renewable energy. Also, do not forget, energy efficiency, you ran very high in terms of energy efficiency, utility spending, as well as benchmarked against the rest of the country. And that is really where I would start my remarks. It is really about a portfolio. BCSE focuses on a portfolio of efficiency natural gas renewables but we have to look beyond that storage, new technologies. And then the optimization of our energy system which I know you this Committee is a big proponent of, and you are as well. In terms of what drives more instate or intra-region generation, it comes to this confluence of policy, markets, cost. And one thing that I would highlight that I think that Maine could continue to build on, a trend that is happening throughout the country, is corporate and city-level involvement in energy decision making because of the information technology and public awareness and a drive for sustainability, local communities as well as the private sector are asking for a clean portfolio of energy choices. So that is an opportunity for local businesses to request the energy that they would like to see provided to them. So, there is a partnership opportunity with utilities and state policy makers. But in terms of infrastructure, you are exactly right. I mean, one of the biggest trends over the last decade has been reduced greenhouse gas emissions throughout the country and that is because of shifting to cleaner fuels like natural gas. In New York, we have an infrastructure problem, and that is, again, a local, as well as state and Federal challenge. Chairman GOLDEN. Thank you very much. There has been a lot of talk about that challenge, a big bottleneck problem we have in New England. So, I will hand it off to the Ranking Member. I do not want him to miss asking questions if votes are called. Mr. STAUBER. Thank you, Mr. Chair. Mr. Rothe, I appreciate your astute observation for the need of steel as we make investments into our critical infrastructure. And as both you and I know, Northern Minnesota is home to the largest iron ore mine in North America and sits on the largest nickel copper reserves in North America as well. Mining in Northern Minnesota, we mine under some of the strongest labor and environmental standards, and it is critical to use U.S. steel in our repair of our infrastructure in our roads and bridges. And to that end, how will the high potential for high-paying mining jobs benefit communities in the Twin Ports and throughout Northern Minnesota? Mr. ROTHE. Well, the reality with mining is very similar to other sorts of investments. It is just that there is a big ripple effect of the mines themselves with the high-paying jobs of the people they employ, the magnitude of the equipment purchases they buy. There is even some other stuff they use. And repairs they make also employ many union tradespeople that similarly work for companies like ours to keep those plants operating. So---- Mr. STAUBER. Go ahead. Mr. ROTHE. You know, in the Twin Ports more specifically, all of the shipping of the Tacket A pellets come through the Duluth/Superior and Two Harbors area. Mr. STAUBER. Right. You know, we have talked about, Ms. Jacobson, you talked about the renewable energies and what have you. So, where Mr. Rothe and I live, those copper nickel reserves, we want to supply the copper for the windmills. And the nickel and cobalt for the electric batteries. And we want to be able to mine it in Minnesota with the strongest labor standards and the strongest environmental standards and not countries that do not have our best interest at heart. We are fighting in Minnesota to give you and give us the opportunity to grow our renewables. I would much rather get those minerals from our home state of Minnesota than from other governments, such as China. The steel dumping, this administration stopped the steel dumping which was cheap and brittle steel to the best made steel in the world. We want the renewables made out of those minerals that we can extract. And I want you in Maine and Vermont and other states to understand what we are fighting for in Minnesota. Mr. Rothe is on the cutting edge of that. And with that being said, I want to switch gears, Todd, to your Federal Government procurement process for your small business. You know, when you work with the Federal Government, what barriers to the efficiency have you faced? And then what certain regulations did you find really burdensome and more difficult to overcome as a small business during the procurement process? Mr. ROTHE. The contracts we have had have, you know, had a fair amount of regulatory aspects to them. You know, each one of them creates its own little silo of a problem. So, I cannot think of anything that specifically is a real barrier except for the fact that the quantity. So, the magnitude becomes more of the issue and it becomes, you know, frankly sometimes we just simply do not chase after government contracts because of those requirements. We have a hard time, for example, in our company, meeting various diversity requirements and things like that. Some of those are more common in some of the state contracts and even some of the university contracts. So, it is almost like either mandated hiring or mandated percentages or all of these sorts of thresholds like that can sometimes be pretty difficult for a small company like ours. Mr. STAUBER. And I think that both Chairman Golden and I, when you made the statement that sometimes you will not even chase those contracts because of the redundancy and the duplication, for a small business that is not what we need to hear. We have a job to do and we have heard this enough over and over. We want our small businesses to be the engine of our economy, and to hear you say that it is a green light for change for us, Mr. Chair. And with that, I will yield back. Chairman GOLDEN. Thank you. I appreciate it. Next, we are going to recognize the Ranking Member of the Subcommittee on Innovation and Workforce Development, Representative Troy Balderson from Ohio's 12th. Mr. BALDERSON. Thank you very much, Mr. Chairman. Thank you, panel, for being here today. My first question will be directed to Mr. Rothe and Mrs. Frazier. As a member of the Transportation and Infrastructure Committee, one of my infrastructure priorities is streamlining the project delivery and permitting process at the Federal level to maximize limited resources and reduce bureaucratic red tape. Last week, I held a Transportation and Infrastructure roundtable in my district with local stakeholders, including the Ohio Department of Transportation, local construction businesses, county engineers, and more. One topic that came up was support for streamlining unnecessary or complex regulations that hinder project development. From your own experiences, what Federal regulations can Congress update, reform, or eliminate to yield better results for taxpayer investment in infrastructure? And Ms. Frazier, you may start first. Ms. FRAZIER. Well, ASCE supports streamlining as long as the environment is protected, and certainly from my personal work experiences, just having a standard that is in place and followed, that we know what to expect. I mean, if there are permits that we can obtain and we know there is a 6-month review period and we can plan on that, but if we are modifying a permit, there is no set review period. That makes businesses really nervous to not have a plan in place. So, I think there is a lot we can do to streamline and really set expectations. Mr. BALDERSON. Mr. Rothe? Mr. ROTHE. I would echo those statements, as well as just saying the unpredictability sometimes of the processes is as big a problem as the processes themselves. And we've faced some severe issues in the State of Minnesota with getting our Line 3 pipeline permitted. Even though that's not a Federal project review per se, but it's an example of things gone amuck with the level of challenges and court challenges. And we, in Minnesota, have a state department going after, basically suing the Public Utilities Commission and challenging rules there. So, things like that create delays, cause major problems for projects in general to get them built. Mr. BALDERSON. Okay. I was just looking to see if there is something specifically that we in Congress can address, but I appreciate both your answers. And if you do think of something, please let our office know. My final question, just time permitted here wise, as the Chairman said, as Ranking Member of the Workforce and Innovation Subcommittee, I am dedicated to closing our workforce gap and it is something that has been a passion of mine for 20-plus years. In your opinion, what more can be done to ensure that the industry has an adequate supply of trained workers? And anybody from the panel can answer that question. Mr. SAPERSTEIN. Thank you for the question. So certainly, in the communications industry it is enabling a whole new generation of industries, particularly as broadband access comes online. And I think actually access to broadband is the thing that we need to make sure that a whole new generation of workforce is enabled. Without the basic access to that infrastructure, you cannot do your homework these days, let alone advance in your career. So, having the broadband access, and having the tools to adopt it and understand the adoption and how important that is is critical to our future development. Ms. JACOBSON. I will comment briefly. From the energy sector, understanding the change and the changing needs of our workforce is one aspect, but we also have I think one in five current employees slated to retire in the next decade when you look at the utility sector in particular. So, there is a huge opportunity here for family-supporting jobs, careers, and very exciting opportunities to intersect with all the infrastructure sectors of the U.S. economy. Energy is not just energy alone. It is connected to everything around this table. So, what we focus on is workforce training and public-private partnerships. And the industries that I work for, making this more of a priority, but there is clearly a role for the Federal Government, and I know in your Committee and this Committee, as well as in Energy and Commerce, there is a lot of focus on specific legislation that would help foster those partnerships in a more robust way. And I think we also have to look at the needs of those potential employees. Making sure they have support so they can take advantage of the training programs when they do exist. Mr. BALDERSON. Thank you very much, Ms. Jacobson. I yield back, Mr. Chairman. Chairman GOLDEN. I think we are going to do another round of questions. I know I have got one about broadband, but I am going to first let Mr. Stauber go. I know you might have some as well. Mr. STAUBER. Thank you, Mr. Chair. To Mr. Rothe again. You talked about the redundancy and the Federal regulations, the duplicative part of them. Would you like to talk about two specific industries in Minnesota that can help small businesses? We have a replacement pipeline project, and we have the first permitted copper nickel project. Can you tell the members here the length of time it took to get those permits? And you can start with the copper nickel. Mr. ROTHE. Well, when I joined J.R. Jensen, which was in the year 2004, and purchased the company since then along with a partner I had at the time. And I remember it was '04 or '05 when PolyMet was starting and anticipating within 2 or 3 years to have their permits. So, if that explains it, that was 16 years ago. Mr. STAUBER. They are into their 16th year for permitting. Sixteen years. And then how about the replacement of a Line 3 we call it in the State of Minnesota. How long has that been going on for a replacement? Mr. ROTHE. That has been going on at least 5 years. And interesting, you know, Wisconsin has similar requirements for pipeline projects, but the 13 mile stretch in Wisconsin was built and completed 2 years ago. And I would also point out that the entire Nation of Canada from North of Edmonton and Alberta area down to the Minnesota border is also now completed and I believe put into service. Mr. STAUBER. Which has stopped good paying union jobs. Mr. ROTHE. That is correct. Mr. STAUBER. Family wage jobs. And for a commodity that we use every day. I just want to switch gears, Mr. Chair, if I could. Mr. Saperstein, you talked about rural broadband, and you made a very interesting comment. You talked about the investment from rural Minnesota into the metro. Can you give the Chair and I some type of idea how we can convince those members of Congress? There are more of them that represent the Metro or the areas that are heavily populated. If you were in our shoes, how would you convince the metro legislators on working from rural in? Mr. SAPERSTEIN. Sure. And thank you for the question. I think economic growth would be the way that I would go about doing that. And the moving forward framework does this because it invests in a robust fiber-fueled broadband infrastructure throughout our Nation. So the more people that come online, not only do you have the construction projects that are going to fuel the fiber development because we are going to be stringing miles and miles of fiber as a result of this, but you also have all of the spillover benefits. You have a 5G economy that is going to come online as a result of this that is going to unleash who knows what when it comes to economic potential. But I can tell you this, that if the rural areas are not connected, they are not going to be a part of that. And so that is why we commend the Committee for looking at this moving forward framework. And think about all of the economic opportunity. You know, 50 percent of home businesses, over 50 percent are women owned. So that brings another generation of potential entrepeneurs into the workforce. So, the economics compel us to invest in our broadband infrastructure today. Mr. STAUBER. That is music to both of our ears. That is critically important. Both the Chair and I held broadband meetings in rural communities and that is exactly what they said, do not forget about us. Our rural hospitals, our rural schools are just as important, and we need to protect that. I am going to make a final statement, and I am going to attribute this statement to Neel Kashkari. He is a member of the Federal Reserve out of Minneapolis. He and I were talking about this subject, about rural broadband, and he made this statement. He said, at some point in the government's history, they made the decision that every mailbox mattered. Every mailbox mattered. And I equate that to every household matters, whether you are in Grand Marais, Baudette, Minnesota, or Willmar, Minnesota, rural areas, they matter. And I just really appreciate, I can tell your enthusiasm for it because Jared and I, Mr. Chair and I are all over this to be able to make sure that rural broadband, it is not a luxury anymore. It is a necessity for people. It is a necessity for small businesses to move out to rural America and live our quality of life. And I appreciate your enthusiasm. And Mr. Chair, thank you to all the witnesses, and I appreciate the extension of the time. Chairman GOLDEN. Of course. Thank you very much. Something you might not know about Maine, we actually passed a law in the state legislature having to do with mining that was widely believed to set the standard for labor and environmental protections along with mining. So, something for you to look at in your work in Minnesota. And I think the point is taken, 5G, these iPhones that everyone is dependent upon these days, solar panels and others, all involving minerals, very important. I am going to probably wrap it up here with just a few more questions starting with broadband. One of the issues that we have talked about here in the Committee had to do with mapping. Recently, the FCC approved a Rural Digital Opportunity Fund. They would go ahead and use reverse auctions to disburse about $20 billion over 10 years for broadband. And I am glad that the FCC is going to support this rural broadband infrastructure investment, but I do have some concerns. And I will start with the fact that they are looking at frontloading the bulk of the funding in the first phase before the FCC's planned update to its broadband maps will be ready. We have found in the Subcommittee and in our hearings and in our work around the country really, that the mapping data is just very inaccurate, and it is a big problem. So, of course, I am concerned that they are going to make the bulk of their investment in areas that may very well already be served and leave out the communities that are most greatly underserved. And I wanted to ask your opinion about this. Is this something Congress should be looking into? What can we do to make sure the investment is made where it needs to go? Mr. SAPERSTEIN. Sure. And thank you, Chairman, for the question. So, we commend Congress for taking a hard look at the broadband mapping because we, too, at USTelecom have done a deep dive into this. In fact, we sponsored a pilot project, the Broadband Mapping Initiative to take a look at what are the hidden unserved pockets out there? And people who may live next to a served house may find themselves observed and it creates a situation where it is hard to figure out exactly where the service needs to go. The Rural Digital Opportunity Fund that you mentioned I think does one thing important. You mentioned that the FCC has taken a step to improve their broadband mapping. In the interim, the first phase of the Rural Digital Opportunity Fund, it focuses on the areas that are completely unserved. So, we do not have to worry about overbuilding at that step. At USTelecom, one of the things that we said to the FCC in particular was that the number of hidden unserved Americans may be very high. And so, we have asked, and I think the FCC committed in their most recent order to reevaluating the budget for phase two if, indeed, the maps show that the number of truly unserved is higher. So, we are appreciative of that. Chairman GOLDEN. Thank you very much for that. I also wanted to ask, Ms. Frazier, high-priority infrastructure needs in Maine. You advise a lot of different people around the state, different businesses. What do we need most in Maine? It's a very open-ended question. Ms. FRAZIER. Yes, it is. I think we most need reliable funding so that we can create a strategic plan and best decide where to put those dollars. I mean, right now our DOT commissioner said our 3-year plan is really a 2-year plan worth of projects but that is all we can afford. So, we need to understand what reliable source of funding is coming and then choose our priorities for there. Of course, roads are the most visible and bridges. So that would be my vote. Chairman GOLDEN. Point well taken. Before the commissioner of the Main DOT can make a good plan like that, he needs to know what the feds are going to do as well. Ms. FRAZIER. Exactly. Chairman GOLDEN. We are all going to continue to be optimistic about Infrastructure Week actually occurring. That would be an important move. Which is why we have had the hearing. I will just throw out one last question for you, Ms. Jacobson. You talked in your plan about the last 10 years of renewable energy. What do you want to see most? What is the most important investment for the next 10 years of renewable energy? Ms. JACOBSON. Well, I think it really does involve public- private partnerships. I mean, what has dominated the last 10 years and maybe mostly in the last 5 years is what I described earlier, is corporate procurement of renewable energy of all resources. And I think as many companies, and certainly in Minnesota and in Maine, you have companies that are looking to procure clean energy and more and more and more of it. But nationally, last year in 2019, it was about 18 gigawatts of corporate PPAs signed, and you know, that represents just about half of the demand for renewable energy nationally in a given year. I mean, the projects do not happen in the same time period, but it is a forward-looking signal. So, I think we need to have continued opportunity for research, development, and deployment from the Federal Government. We need to look at sensible tax policy which has really fueled renewable energy deployment and cost reductions, and we have to focus on the private sector. What does the private sector need to get access to clean energy? Chairman GOLDEN. Thank you very much. On that final note, we have some important tax credits that we did not take action on to extend some of these investments in renewable energy, so hopefully something Congress can work together on as well in 2020. I want to thank you all again for your testimony and a great conversation. I think we do it a little bit differently on this Subcommittee sometimes. It is an open-ended conversation between all of us. So, thank you for joining us. Just as a closing statement, investments, what we have heard today, there are obvious investments in our infrastructure. Just a great opportunity to help small businesses grow, not just in Maine and Minnesota but over the entire stretch of the country. Pete, what do you think? Mr. STAUBER. Thank you, Mr. Chair. And as we wrap it up, I really appreciate your testimony. Each one of you spent some time and money and energy to get here. While your testimony was going on, I hope you saw us just nodding. We are all in the same boat here. I just really appreciate what you are saying. It affirms, it reaffirms what we are hearing in our districts and across the Nation. Our hearing in Maine, Ms. Frazier, we heard the same thing as we did in mid-Minnesota. The same concerns from the small business owners, the men and women who own a small business who are the engine of our economy; right? So, I think this is an issue that we can tackle and there are so many nonpartisan or bipartisan issues that we can work on in Congress and these are certainly many of them. So, I want to thank each and every one of you for your time. Chairman GOLDEN. Let me go and ask unanimous consent that members have 5 legislative days to submit statements and supporting materials for the record. And without objection, so ordered. Thank you very much. I appreciate it. [Whereupon, at 14:08 p.m., the subcommittee was adjourned.] A P P E N D I X [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]