[Senate Hearing 107-437] [From the U.S. Government Publishing Office] S. Hrg. 107-437 NOMINATION HEARING FOR MARK REY AND HILDA GAY LEGG ======================================================================= HEARING before the COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY UNITED STATES SENATE ONE HUNDRED SEVENTH CONGRESS FIRST SESSION __________ JULY 26, 2001 __________ Printed for the use of the Committee on Agriculture, Nutrition, and Forestry Available via the World Wide Web: http://www.agriculture.senate.gov U.S. GOVERNMENT PRINTING OFFICE 79-498 WASHINGTON : 2002 ________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800 Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY TOM HARKIN, Iowa, Chairman PATRICK J. LEAHY, Vermont RICHARD G. LUGAR, Indiana KENT CONRAD, North Dakota JESSE HELMS, North Carolina THOMAS A. DASCHLE, South Dakota THAD COCHRAN, Mississippi MAX BAUCUS, Montana MITCH McCONNELL, Kentucky BLANCHE L. LINCOLN, Arkansas PAT ROBERTS, Kansas ZELL MILLER, Georgia PETER G. FITZGERALD, Illinois DEBBIE A. STABENOW, Michigan CRAIG THOMAS, Wyoming BEN NELSON, Nebraska WAYNE ALLARD, Colorado MARK DAYTON, Minnesota TIM HUTCHINSON, Arkansas PAUL DAVID WELLSTONE, Minnesota MICHEAL D. CRAPO, Idaho Mark Halverson, Staff Director David L. Johnson, Chief Counsel Robert E. Sturm, Chief Clerk Keith Luse, Staff Director for the Minority (ii) C O N T E N T S ---------- Page Hearing(s): Nomination Hearing for Mark Rey and Hilda Gay Legg............... 01 ---------- Thursday, July 26, 2001 STATEMENTS PRESENTED BY SENATORS Harkin, Hon. Tom, a U.S. Senator from Iowa, Chairman, Committee on Agriculture, Nutrition, and Forestry........................ 01 Craig, Hon. Larry, a U.S. Senator from Idaho..................... 05 McConnell, Hon. Mitch, a U.S. Senator from Kentucky.............. 02 Murkowski, Hon. Frank H., a U.S. Senator from Alaska............. 03 Rogers, Hon. Harold, a U.S. Senator from Kentucky................ 06 ---------- WITNESSES Legg, Hilda Gay of Somerset, Kentucky, to be Administrator, Rural Utilities Service, United States Department of Agriculture..... 10 Rey, Mark of Canton, Ohio, to be Under Secretary for Natural Resources and the Environment, United States Department of Agriculture.................................................... 08 ---------- APPENDIX Prepared Statements: Baucus, Hon. Max............................................. 42 Bunning, Hon. Jim............................................ 31 Crapo, Hon. Mike............................................. 30 McConnell, Hon. Mitch........................................ 32 Legg, Hilda Gay.............................................. 37 Rey, Mark.................................................... 33 Document(s) Submitted for the Record: Legg, Hilda Gay, Biography................................... 60 Rey, Mark, Biography......................................... 44 Support Letters and Testimonies for the Nomination of Mark Rey........................................................ 81 Opposition Letters and Testimonies for the Nomination of Mark Rey........................................................ 85 Questions and Answers Harkin, Hon. Tom............................................. 102 Baucus, Hon. Max............................................. 145 Daschle, Hon. Thomas......................................... 138 Lugar, Hon. Richard G........................................ 134 ---------- NOMINATION HEARING: MARK REY AND HILDA GAY LEGG ---------- THURSDAY, JULY 26, 2001 U.S. Senate, Committee on Agriculture, Nutrition, and Forestry, Washington, DC. The committee met, pursuant to notice, at 10:41 a.m., in room SR-328A, Russell Senate Office Building, Hon. Tom Harkin, [Chairman of the Committee], presiding. Present or submitting a statement: Senators Harkin, Conrad, Lugar, McConnell, Thomas, Allard, and Crapo. STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM IOWA, CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY The Chairman. The Senate Committee on Agriculture, Nutrition, and Forestry will come to order. I apologize to all for being late. This morning we are considering two nominations for important positions at the Department of Agriculture. Mr. Mark Rey is nominated to serve as Under Secretary for Natural Resources and the Environment, and Hilda Legg is nominated to serve as Administrator of the Rural Utilities Service. The committee welcomes you, Mr. Rey and Ms. Legg, and looks forward to your testimony. The Under Secretary for Natural Resources and Environment oversees both the Forest Service and the Natural Resources Conservation Service at USDA. This position is one of great responsibility involving both public and private lands. The health and conservation of forests and agricultural lands is critically important to all of us. If we do not respect and properly care for the land, we will impoverish ourselves and future generations, both materially and spiritually. The Under Secretary will have a crucial role in developing and carrying out our Nation's policies affecting farm and forest lands. The Administrator of the Rural Utilities Service also has a very important responsibility involving the quality of life and economic progress of rural communities. From its beginning, the Department of Agriculture has sought to help enhance the lives of Americans on farms and ranches and in small towns across our Nation. Since the formation of the Rural Electrification Administration under President Roosevelt, USDA has played a key role in helping rural America secure amenities that are taken for granted in urban areas. Yet even in times of national prosperity, rural communities still lag behind the rest of the country. Surely we can do more both in Congress and the Department to help close that gap. I am pleased to welcome our colleagues, Senator Murkowski, Senator Craig, and Congressman Rogers. I would also like to recognize and welcome several members of Mr. Rey's family who are here. I will permit him to introduce them when we call upon Mr. Rey. Again, we are pleased to have all of you here. I will turn to the distinguished ranking member, Senator Lugar, for any opening statement he may have. Senator Lugar. Thank you very much, Mr. Chairman. I will forego an opening statement. I am looking forward to the introductions by our colleagues of these distinguished nominees. I appreciate their willingness to serve. They are able people. For the record, as the Chairman knows, he and I are given the FBI file. I have examined those carefully in preparation for the hearing. We look forward to hearing the testimony. Senator McConnell. Mr. Chairman, if I may, I am also going to want to say a word about Hilda Legg, who is a friend and constituent of mine, whenever you think that is appropriate. The Chairman. Well, I think now would be the appropriate time, Senator. STATEMENT OF HON. MITCH McCONNELL, A U.S. SENATOR FROM KENTUCKY Senator McConnell. Mr. Chairman, I am pleased to join my friend and colleague, Hal Rogers, in introducing our constituent, Hilda Legg, of Somerset, Kentucky. Hilda is an old friend and former staffer from years ago who has had a truly distinguished career and is an outstanding choice by the President for the Rural Utilities Service. Hilda is in Washington accompanied by her 16-month-old son, Dane, and we want to welcome you and him, wherever he may be. The Rural Utilities Service is an agency dedicated to helping rural America finance water, electricity, and telecommunications projects, as well as providing loans and grants for rural distance learning and telemedicine projects. The Administrator of RUS must be well versed in the needs of our rural communities and in the role that rural development projects play in the overall economy and the well-being of rural America. Nobody could be better qualified for this job than Hilda, who comes to us from the Center for Rural Development, which is really the brainchild of Congressman Rogers, where she is presently serving as executive director and CEO. She has also served as past Alternate Federal Co-Chair of the Appalachian Regional Commission. She has been responsible for the overall management of this center that I just referred to that has been a national model for economic development in rural areas. Her expertise includes agriculture, advanced technology, export assistance, and small business development. Hilda is no stranger to the Senate. As I mentioned earlier, she was confirmed by the Senate as Co-Chair of the Appalachian Regional Commission. As Co-Chair, she worked with the Governors of 13 States and with a budget of over $190 million in a position aimed at job creation, building infrastructure, education and work force training, and numerous research projects. She has a long resume, and in the interest of time, I am just going to hit on the highlights of her career, which, as I would suspect you expect me to say, the highlight of her career was when she worked for me. [Laughter.] The Chairman. Let's hear from her on that one. Senator McConnell. From 1985 to 1987. Obviously I am very proud and pleased to be here to introduce Hilda and to wish her well in this new position. I am sure she will bring great distinction to the job and to our State and to the United States. Thank you very much, Mr. Chairman. The Chairman. Thank you very much, Senator McConnell. The prepared statement of Senator McConnell can be found in the appendix on page 32.] Senator Thomas, did you have any statement? Senator Thomas. No, sir. I just welcome Mark. I worked with him, of course, on the committee, and I am very interested in what Ms. Legg will be doing, as I was manager of the Rural Electric Association. So I welcome our folks and am very proud to support them. The Chairman. Very good. Senator Crapo. Senator Crapo. I, too, simply welcome both Ms. Legg and Mr. Rey to the committee today, and I look forward to a prompt and expeditious treatment of their nominations. The Chairman. Very good. Also, for the record, both Senator Lugar and I have a letter from Senator Bunning that I will make part of the record. He says, ``I support your committee in taking up the nomination of Hilda Legg to be the next Administrator of the Rural Utilities Service at USDA. The President has made an excellent choice by selecting Hilda, and I hope that you are able to vote her out of committee soon.'' ``Again, the President has made a fine choice. I wholeheartedly endorse her nomination, and I look forward to her confirmation by your committee in the full Senate.'' Signed by Senator Jim Bunning. [The prepared statement of Senator Bunning can be found in the appendix on page 31.] The Chairman. Now I will turn to our distinguished Senators who are here for the purpose of introduction and support and whatever they want to add to these proceedings. I will first recognize the Senator from Alaska, Senator Murkowski. STATEMENT OF HON. FRANK H. MURKOWSKI, A U.S. SENATOR FROM ALASKA Senator Murkowski. Thank you very much, Senator Harkin, and let me thank you, Senator Lugar, and the other members for scheduling this hearing today. I am going to speak on behalf of the nominee, Mark Rey, for Under Secretary for Natural Resources and Environment, and I think it is very appropriate that you are able to expedite this nominee by holding this hearing. I have had the pleasure of working with Mark for a number of years. He has served the Senate Energy and Natural Resources Committee as a professional staff member since the 104th Congress, so we have had an opportunity to work together for some time. He has an extraordinary knowledge of issues, individuals, organizations involved in the Department of Agriculture Natural Resources and Environment portfolio, which is certainly a significant responsibility of this committee. He has handled some of the tough issues, particularly in the Pacific Northwest relative to resource development. He has worked closely with Senator Craig, who was the subcommittee chairman. I certainly urge your favorable consideration. He can be tough. He can be skilled--he is always skilled. He is not always tough. He is always sensitive and responsive in trying to work toward a solution. His experience over the years I think is extraordinary in the sense of having the balance to come into this position. He has covered wilderness designations, county payments to improve forest management. He has worked on issues such as the Quincy Library, which was an effort to bring about a compromise between the logging and the environmental groups. Senator Craig can perhaps speak specifically of some of the areas where they have worked together. Having had the overall responsibility for the functioning of that particular area of the Energy and Natural Resources Committee relative to resource development, his departure is certainly a loss to our committee. It is a loss to the Senate. I am thankful that he will proceed here on behalf of our country and in a role of service. Let me make a final note to give you some idea of how he is held by his peers. In 1997, the National Journal developed a list of the 100 most influential men and women in the Federal Government. Mark Rey was on that list. That gives you some idea of how effective he is and how knowledgeable he is. I can't think of an individual who is more qualified for this position, and I am very grateful that he is willing to serve the Nation in the capacity the President has nominated him, and I would certainly urge favorably reporting his nomination. It has been a pleasure working with him. I would like to add for the record letters of endorsement from the United Brotherhood of Carpenters and Joiners, the International Association of Machinists and Aerospace Workers, the National Education Association, the National Federation of Federal Employees. Then we move down to such esteemed organizations as the Ruffled Grouse Society, Foundation for North American Wild Sheep, the Bear Trust International, the Campfire Clubs of America, the Safari Club International, the Conservation Forests, the Cherokee Safari Club. The list goes on and on, and I won't bore you other than to ask that these be included in the record to give you some idea of the depth of support of this nominee. Senator Murkowski. Mark, I wish you well. It has been a pleasure working with you, and we look forward to your continued contribution. The Chairman. Thank you very much, Senator Murkowski. Senator Craig. STATEMENT OF HON. LARRY CRAIG, A U.S. SENATOR FROM IDAHO Senator Craig. Well, Mr. Chairman, thank you. It is good to be back before the committee. I still wish I were on the committee. [Laughter.] Senator Craig. Especially with the work that you and the Ranking Member, Senator Lugar, are doing now in the shaping of a new Farm bill. We know how critical that is to our country, and I will play a role in it, but not an active role of the kind that I would have, had I been here. I also join Chairman, now Ranking Member Frank Murkowski in thanking you for expediting these hearings. I have been involved with others in encouraging our chairman to move some of these nominees as quickly as possible. We need them on the ground. We need them working on behalf of the citizens of our country, and your choice to have this hearing today for these two individuals is extremely important. Frank has well outlined the relationship that he and I have had with Mark Rey over the last good number of years. I chaired the Subcommittee on Public Lands and the Forest Service, and over the course of the last good number of years, Mark and I have held over 150 hearings on the U.S. Forest Service. Some people have said we have turned it upside down and shaken it on more than one occasion, all for the purpose of trying to make it work, and work better. In fact, one observer mentioned that it was the first time that kind of comprehensive overview had been done since the days of Hubert Humphrey and the crafting of the National Forest Management Act. Throughout all of this time, there is only one clear thing I can say about Mark Rey. He is without question, in my opinion, the most knowledgeable person I have ever met on the U.S. Forest Service, not only in the way it functions or fails to function, but every law, every regulation that interfaces or fails to interface to bring about decisions on the ground or ultimate decisions by the chief here in Washington. When the Bush administration began to recognize Mark for the opportunity to serve this country as Under Secretary for Natural Resources and the Environment, I thought of no better choice than Mark. I say that because, while there are those who would criticize--and there will be--one of the things that I think is most evident in the letters that Frank asked be put in the record--and let me add another one, the National Education Association--was a broad cross-section of interests that support Mark Rey's nomination. That says that he has done a lot of things right over the years or he has gained their respect. Whether they agreed always with him, they recognized that he will listen to them and he will try to work compromise. One of the things that Mark and I sought to do over the last good number of years--and we have worked very closely with Ron Wyden in doing so--was to stop the conflict that has been going on out on the public land over the years between many of our users and the law and environmental groups to see where we could bring balance to policy. In many instances, I think we have been able to effect that. Let me give you one example that I am most proud of, and Mark was really one of the major architects of it, Mr. Chairman. We call it the Secure Rural Schools and Community Self-Determination Act. You voted for it last year. It became law, and it began to reshape the relationship of communities, school districts, and counties out in our public land west and timbered land areas of the Nation that once received the receipts of timber sales to fund their public schools and county roads. There was opposition in the beginning, and in the end it passed with near unanimity. Ron Wyden and I worked very closely together. Ron Wyden supports the nomination of Mark Rey, and I understand he has a statement--he can't be here today; that will be handed out to you--and is actively supporting Mark. Why? Because we worked together and we found compromise and we brought coalitions together of the kind that you really have to do to make public policy work when there are differences of opinion. Mark has demonstrated that very, very clearly in his ability not only to work with staff but his vast knowledge of the issue simply puts him at the head of the line. I think our President has chosen wisely. This individual will serve you well in all of the capacities that are necessary within this area of responsibility, from conservation--and we know how critical that is to agriculture and to our farming community and to our public lands and water quality and all of the resources that are combined there. For those of us who live in the public land west and in the public timbered areas of our country, we know that the relationship we have with those lands is critical to the economic and the environmental well-being of our communities, our States, and, of course, all of the resources combined. Mark has demonstrated that well over the years. I think you will--I trust you will find him favorable, and I am very proud to be sitting beside the person who I believe will become the next Under Secretary for Natural Resources and the Environment. Thank you very much, Mr. Chairman. The Chairman. Thank you very much, Senator Craig. Again, before we move to Mr. Rey, I would like to recognize Congressman Rogers for the purpose of introducing Ms. Legg. Congressman Rogers, welcome to the committee. STATEMENT OF HON. HAROLD ROGERS, A REPRESENTATIVE IN CONGRESS FROM KENTUCKY Mr. Rogers. Thank you very much, Mr. Chairman, and thank you for expediting this hearing. You do service to your constituents across the country when you schedule these hearings to, I hope, confirm these appointees. To the members of the committee, thanks for listening to us. I join my home State colleague and my senior Senator in introducing Hilda Legg to this committee, and I offer you, Mr. Chairman, my strongest possible endorsement of her nomination to head the Rural Utilities Service. Hilda is a native of the Commonwealth of Kentucky. She spent nearly her entire professional life in rural economic development, playing a major and successful role in helping one of the country's most distressed regions turn the corner toward self-sufficiency. She has a rich and diverse background. She has been a teacher. She was a college administrator. She was, of course, Senator McConnell's aide in one of his offices in Kentucky. As we know, she was the Federal Appalachian development Co- Chairman and has been a State-based economic development official most of her career. Few people, Mr. Chairman and members, possess this lady's combination of rural development experience and managerial experience. I think she is ideal for this job. Seven years ago, Hilda was selected by a national search committee to become the first director and CEO of a major new Rural Development Center based in my congressional district, serving a third of the State of Kentucky, but including all of the hard-hit sections of Central Appalachia in Kentucky. It was created to be a national model for rural economic development, and, in fact, it has become just that under her leadership. This was an enormously tall order that she took on, and we are forever grateful that she agreed to take it on and, more importantly, grateful for the great job she did these years in bringing it from its infancy to almost maturity. She inherited that enterprise in the midst of the construction of the building. She quickly moved to accelerate the build-out and the completion, to hire the entire professional staff, and to implement the various economic development programs in that center. She also managed the monumental task of designing and installing something brand new and unique, even today unlike anything in the country in a rural setting, and that is a computer and telecommunications network that now connects most of the 40 counties in that rural region together so that we can talk, even as we are talking here, across the vast distances and chasms that separate the parts of that area. For all of the good that that kind of communicative capability gives us for the first time in our history, it pales beside the computer network that has been created that links us with all of the world and is bringing thousands now of jobs to a region which has been distressed, dominated by the coal industry for all these decades, giving us the new jobs of the future. Mr. Chairman, that center is enabling my part of Kentucky, long distressed in the Appalachian region, the reputation of being the new Silicon Holler. [Laughter.] Mr. Rogers. Under Hilda's leadership. The center has become, as we had hoped, a national model for implementing economic development strategies in a rural setting, and it can be attributed to Hilda's exceptional leadership, management, communications, policy development skills, all of which would be of great use to us in the country as Administrator of the Rural Utilities Service. This would be Hilda's third term of executive branch service, beginning with her work at the Department of Education's Council on the Handicapped, then her role as Alternate Federal Co-Chairman of the Appalachian Regional Commission where she helped manage perhaps the most effective Federal instrument for spurring economic growth in severely distressed communities. Clearly, nothing would please me more, Mr. Chairman and members, than to have Hilda remain in Kentucky because she is going to be very difficult for us to replace to continue the effective programs that she has led these past years, except the only exception to that would be to have her use those exceptional skills on behalf of the country, and she is prepared to sacrifice in that regard. Mr. Chairman, reluctantly, I am, too. Should this committee and the Senate approve her nomination, those of us in Kentucky will be secure in the knowledge that she has helped advance and shape the region, our region and its future, in ways that cannot be reversed, in my judgment. Hilda Legg is a strong and energetic manager. She is a genuine rural development expert and a progressive leader, and I don't think you could find anybody more qualified to fill this post. Mr. Chairman, I commend Hilda Legg to you with my full endorsement, and I hope that she meets with your approval. Thank you. The Chairman. Thank you very much, Congressman. We will now turn to our witnesses. The Chairman. Now I would ask both nominees to stand, raise your right hand. Do you swear or affirm that the testimony you are about to provide is the truth, the whole truth, and nothing but the truth, so help you God? Mr. Rey. I do. Ms. Legg. I do. The Chairman. Please be seated. We welcome you to the committee, and I will ask for your statements. First, I have one question to ask both of you: Do you agree that, if confirmed, you will appear before any duly constituted committee of Congress if asked to appear? Mr. Rey. Mr. Rey. I will. The Chairman. Ms. Legg. Ms. Legg. I will. The Chairman. Thank you both very much, and I would ask you now for your statements. We will turn first to Mr. Mark Rey, of Canton, Ohio, who has been nominated for Under Secretary for Natural Resources and the Environment. Mr. Rey, welcome to the committee. Your statement will be made a part of the record in its entirety. Please proceed as you so desire, and if you have some family members you want to introduce, please do so. TESTIMONY OF MARK REY, OF CANTON, OHIO, TO BE UNDER SECRETARY FOR NATURAL RESOURCES AND THE ENVIRONMENT, UNITED STATES DEPARTMENT OF AGRICULTURE Mr. Rey. Upon your kind invitation, Mr. Chairman, I would like to introduced my family here today: my wife, Francesca Rey; my father, Emmanuel Rey; my mother, Joanne Rey; my daughter, Sally Rey; and my sister, Lisa Phillips. The Chairman. Very good. Mr. Rey. Thank you. Mr. Chairman and members of the committee, being nominated as Under Secretary of Agriculture for Natural Resources and the Environment is the greatest honor that I have been accorded in a long career in the natural resources area. It is also the greatest challenge I have been asked to meet since arriving in Washington, DC, almost 26 years ago. I would like to start by expressing my deepest thanks to President Bush and Secretary Veneman for their confidence and trust in my ability to fulfill the responsibilities of the office. I would also like to thank Senator Murkowski and Senator Craig for their encouragement and support. Last, I would like to thank--express my appreciate to you, Mr. Chairman, and your staff for fairly and promptly considering my nomination. I come before you today sincerely convinced that the job of Under Secretary of Agriculture for Natural Resources and the Environment is one of the most vital positions in the Federal Government. Other offices will undoubtedly make a greater contribution in important areas such as national security or public health. However, no other assignment carries a greater trust responsibility to the American people than the stewardship of our Nation's soil, waters, and forests. David Ben-Gurion once wrote that, ``The soil is the source of life creativity, culture, and real independence.'' Earlier this century, Franklin D. Roosevelt spoke that ``Forests are the `lungs' of our land, purifying the air and giving fresh strength to our people.'' Still earlier, Samuel Langhorne Clemens wrote that ``whiskey's for drinking, but water's for fighting about.'' Given the importance of this assignment, I would like to begin our time together today talking about what you can expect from me, should you choose to confirm my nomination. First, if confirmed, I commit to bipartisan collaboration in overseeing the stewardship of America's soil, water, and forest resources. In my years of service to the Senate, I am most proud of the initiatives to which I have contributed that passed Congress with overwhelming, bipartisan support. Over the past century, our greatest gains in securing the enlightened stewardship of our natural resources have occurred when men and women of both parties have bridged their differences and found common ground on behalf of the American people. Second, I will, if confirmed, continue to respect the special role reserved for Congress in the Constitution for the development and implementation of America's natural resource policies. Having spent six years working for the Congress, I appreciate firsthand the importance of congressional oversight and involvement in the development and implementation of these matters. My advocacy for an active congressional role in this area will not change with my transfer to the executive branch of our Government, should you approve that transfer. In her own confirmation appearance before this committee, Secretary Veneman stated that she believed ``in working cooperatively with Congress.'' I strongly share her belief. Third, I offer you my experience. For over a quarter century, I have worked with and around the agencies I will oversee should you elect to confirm my nomination. A good portion of the enthusiasm and humility I bring to this task is a reflection of the dedication and skill of the public servants working in this area that I have come to know over this time. They need attentive critics, but they have earned my respect, gratitude, support, and affection. Finally, I offer you an open mind. I consider myself to be a good and active listener. You won't be hard pressed to find people who have disagreed with me. But I think most, if not all, of them will confirm that we disagreed without being disagreeable. In order to fairly sort out conflicting facts and opinions--and, in this policy area, everyone is entitled to their own set of each--an Under Secretary should be physically and intellectually accessible to all parties. If you choose to confirm me, I pledge to keep open both my office door and my thinking processes. Winston Churchill once wrote that ``we make a living by what we get, we make a life by what we give.'' I come before you today to respectfully request that you give me another opportunity to serve the American people. What I have offered about how I would perform this service, I have stated not only under oath to you, but before my family and friends assembled here today. Thank you very much. [The prepared statement of Mr. Rey can be found in the appendix on page 33.] The Chairman. Thank you, Mr. Rey. Ms. Legg, welcome to the committee and please proceed with your statement. TESTIMONY OF HILDA GAY LEGG OF SOMERSET, KENTUCKY, TO BE ADMINISTRATOR, RURAL UTILITIES SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE Ms. Legg. Thank you, Mr. Chairman. I resisted the urge to bring my 16-month-old toddler in out of respect for you, Senator, and the committee. But I did bring his photo along. The Chairman. There you go. All right. Ms. Legg. I would also like to say a thank you of appreciation to my mother and my father. My mother like millions of Americans, an advanced Alzheimer's patient, couldn't be here. My father who is 87, would love to be here, but just was not able to make the trip. He was the one who taught me around the supper table at night about Government, and then about public service, as a member of the Adair County Board of Education for years and years. I thank them. Mr. Chairman, Senator Lugar and other distinguished members of this committee, I am truly humbled and honored to appear before you as the nominee of President George W. Bush for the Administrator's position of the Rural Utilities Service. I am grateful to the President and to Secretary Veneman for their confidence in my ability to lead this most important agency, and for the opportunity to continue my life's work. Serving rural communities has always been at the center of that work, and it is an honor to be able to work with such distinguished colleagues at this level. I would like to thank Senator McConnell and Congressman Rogers for their remarks today, but also, for the past 20 years, their advice and their support. I truly value their friendship. But today is truly the pinnacle of a most rewarding career. One that I admit I did not have the foresight to plan, but one where opportunity has knocked and I was able to walk through the door. It's a career where service to residents in rural communities has always been at the center, a direction that I intend to continue. Why am I so excited about the opportunity to serve as the Administrator of the Rural Utilities Service? It's who I am. I was raised on that small family farm, where both parents worked outside the home. Farming was not our primary income. In fact, it was supplemental at best. Then for 18 years I was married to a farmer where agriculture was our primary source of income. I assisted with that cow/calf operation, those feeder pigs, and the corn and the hay and the tobacco. Except for just a couple of short stints in Washington, DC, I've always lived in rural communities, the largest being 15,000 people. My professional background, included serving as the alternate Co-Chairman of the Appalachian Regional Commission where I assisted 13 Governors and their states in economic development. While serving as Senator McConnell's field rep, which as he said, was the most important part of my career, I worked with local officials to help secure support from Federal programs, as they endeavored very sincerely to grow those communities. For the past seven years I have focused on economic development in Kentucky's 40 poorest counties, always challenging when trying to stimulate economic growth and improve the quality of life. Truly, Senators, I have been where the rubber meets the road in rural economic development. I am very, very proud of the successes of the Center for Rural Development. My formal training in sociology and education has simply given me the broad perspective of total community development and the interrelatedness of the various aspects. When we talk about infrastructure in our rural communities, that is truly one of the biggest challenges, not only to insure the maintenance of water and sewer lines, but also expansions necessary to encourage economic growth and new job creation. Obviously, utilities always have been, and will continue to be, the conduit for development even in this information age, which is, of course, the newest infrastructure challenge in rural communities. All these computers, wide-area networks, local- area networks, video conferences and the connectivity that links rural communities to the world and brings the resources of the world to those rural communities, all run on energy. Recently I read a prediction that the Internet will be responsible for one-half to two-thirds of all the growth in U.S. electricity demand. All these infrastructures are important. Workforces simply cannot be development, and new jobs cannot be created, companies cannot expand, and rural communities will not be viable places for future generations to live and raise their families, if the infrastructure is not in place. It is critical to the quality of life for rural Americans, and I truly cannot think of a more important challenge and exciting opportunity for the constituencies that I will be working with, and of which I am one. I want my 16-month-old son, Dane, to know that feel of fresh cool dirt from a plowed field between his toes, and that sweet smell of freshly-mown hay, and yet, I want him to be able to access the world, and to have the opportunities to develop his talents in that environment. It is for his future that I take this challenge so seriously, and so gladly devote the coming months and years to this service, if you so choose to confirm. Again, I thank you for your consideration. I seek your approval today so that I can begin this new and challenging endeavor. I will be glad to answer any questions. Again, thank you. [The prepared statement of Ms. Legg can be found in the appendix on page 37.] The Chairman. Thank you very much for an excellent statement, Ms. Legg, both of you. I will try to take about seven minutes per round of questions as we go through the panel. I will start off with my seven minutes. Mr. Rey, I must say that at the outset, while I have received a number of letters in support of your nomination from various and sundry entities and groups, I must say that I have received some that are highly questioning. I had one here that was signed by a number of environmental groups: the Sierra Club, the National Environmental Trust, the U.S. Public Interest Research Group, the Earth Justice Legal Defense Fund, Defenders of Wildlife, Natural Resources Defense Council and the Wilderness Society, basically expressing concern. They did not say they were opposed to your nomination; they just expressed concern about it. Basically they say that Mr. Rey has been closely involved with the timber industry and an advocate for their policies for over 20 years with a lengthy record of positions, and a very specific point of view opposing environmental protection. As I said, they did not absolutely say that they were opposed; they just said that they were concerned. Mr. Rey, why are all these groups so concerned? I do not know you personally, but would be interested in knowing. I do not know why these groups are concerned about you? Do you have any view on that at all? Mr. Rey. Well, I--it would be presumptuous for me to speak on their behalf, but we have had our differences in the past, particularly when I had a different role as an advocate for the Forest Products Industry, which I was from the mid 1980's until the mid 1990's. I think though if you ask all of those groups, Mr. Chairman, one of the things you won't hear is that since I took on a different role, that of a public servant, that I was unavailable to them, that I was unwilling to hear their views, that I was insensitive to their concerns. That doesn't mean that we agree more or less now, but I do pride myself that I don't think you'll find any of those groups who will be able to tell you that I denied them a meeting, that I failed to return a phone call, that I didn't listen when they had something to say. The Chairman. I appreciate that. As I said, they did not say that they oppose your nomination; they just said that they have grave concern. That is the word that they used here. I would, as chairman, I say, that these groups, if they want to submit statements or if they want to further develop some thoughts on that, I would certainly welcome that and I would keep the record open for that if they wish to do so. I have a few more questions to ask. In the past, Mr. Rey, you have promoted fundamental changes to many of the laws that you will be charged with enforcing, including the National Forest Management Act, and your actions directly impact the Endangered Species Act. Will you commit to us to fully uphold these laws as they are currently enacted and interpreted by the Federal courts? Mr. Rey. Absolutely, Mr. Chairman. If confirmed, I will fully uphold the laws as they are written. The Chairman. Now, Mr. Rey, I do not know if we have a difference on this or not, but I am personally a strong supporter of the Roadless Area Conservation Rule, because I believe it contains a balanced approach to the use and conservation of forests. I was disturbed when the Forest Service decided to take action to undermine the Roadless Area Conservation Rule. Chairman Bingaman just stated, and I quote, ``The Forest Service will take additional time to provide for public comment regarding the Roadless Area Conservation Rule. While I am not opposed to additional public comment, I am opposed to actions to undo or undermine the rule. Although the administration has continually promised to uphold the roadless rule, today's announcement appears to be revisiting fundamental questions regarding the necessity of the rule.'' I am still quoting from Senator Bingaman. ``The American public will be closely watching what steps the administration takes in the upcoming months regarding this rule. No rule can perfectly satisfy everyone, but this one has struck a chord with the American people. The Forest Service already has an $8.4 billion maintenance backlog on its existing 386,000 mile road system. In the absence of the rule, plans to build about 1,160 miles of new roads into protected areas would simply add to the Forest Service backlog.'' End quote. That is from Senator Bingaman. Mr. Rey, how would you respond to Chairman Bingaman's statement? Mr. Rey. Mr. Chairman, I believe that you and I are in agreement on the need to protect roadless values. The rule that Senator Bingaman was referring to has, however, been enjoined by a Federal District Court. The Court enjoined the rule because a single national rulemaking, disposing of all of the roadless areas in the 153 National Forests, could not, in the Court's view, provide sufficient site-specific information to meet the administration's obligations under the National Environmental Policy Act. That Court decision is under appeal to the Ninth Circuit now, and we'll have to see what the Courts do with it. But one way or another, Mr. Chairman, I would be happy to work with you to protect roadless values. Any disagreement we might have won't be over that; it will be over the best way that we get to that point, if in fact we disagree at all. The Chairman. My staff informs me it is her information that the administration is not appealing this case. Mr. Rey. The administration has elected not to appeal this case, but the intervenors have, so the Ninth Circuit has before it all of the arguments available to defend the current rule. Unfortunately, or fortunately, depending on how you look at it, it was the Ninth Circuit who held that a previous effort to address this issue through a single national exercise, could not reach the responsibilities of the Environmental Protection Act--or the Environmental Policy--National Environmental Policy Act. The Chairman. The administration is not appealing this decision? Mr. Rey. The administration is not appealing the decision, but the Ninth Circuit will render a decision nevertheless, and we will adhere to what the Ninth Circuit directs us to do. The Chairman. Can we assume that since the administration is not appealing the decision, that they are in favor of overturning the rule? Mr. Rey. I don't think that's the assumption here. I think that the administration, looking at what the judge said, decided that a new effort to protect roadless values in a way that would meet the District Court's objections was a better way to assure the protection of roadless values more quickly. The administration has determined that in the interim, any activity that occurs in roadless area, if there are any, would have to be approved by the chief of the Forest Service. The Chairman. Thank you, Mr. Rey. Senator Lugar. Senator Lugar. Thank you very much, Mr. Chairman. Mr. Rey, during our conversation earlier this week, I was impressed with the fact that you have an excellent grasp of the Forest Service organization and how large that organization is. One of the points that you made was that a number of the Forest Service persons are not of advanced age, but they are getting older, that the problem of recruitment of qualified people may well depend upon pay, working conditions, other aspects that are competitive with other alternative occupations. Would you illuminate that further for the benefit of the committee? As you take a look at this large organization, I think you said there are 38,000 people, and this is a part of your purview as Under Secretary, a huge organization of people, what thoughts do you have about bringing new vigor, new recruits, the kinds of incentives that are required? Mr. Rey. Actually, the observation I made when we met applies equally to both the Forest Service and the Natural Resources Conservation Service, where in both organizations, the demographics of the employee base suggests that we're going to lose through retirement a considerable number of skilled employees in the relatively near future. One of my greatest challenges is going to be working with you and other Members of Congress to secure both adequate funding and adequate incentives to retain and also to recruit new employees coming in. Fortunately, there seems to be a considerable amount of enthusiasm among college graduates today for work in the natural resources and environmental area. I don't think that the talent pool that we'll be drawing from will necessarily be the problem. I think that the--the real challenge will be to find funding and find incentives to hire and then retain those employees, and to do that before we lose the experience base that we need to train them. Senator Lugar. I raise that question, Mr. Chairman, because the Under Secretary has these two large organizations as a part of the chain of command. He is not involved in a hands-on way with either one. They have their independence and their offices. But he is the advocate for them. He is sort of the interlocutor between us, the President, the organizations, and I think that is important. Sometimes we have these nominee hearings, we have an impression somebody is going to be out there making a rule on roads or something. Well, this is important in terms of policy, and he may very well reflect a policy in consulting with the President, with the Secretary of Agriculture, with us. But I was impressed by the fact his long work, longstanding work with our colleagues that we heard from this morning, Senator Murkowski and Senator Craig, have given him an excellent background, obviously, of the issues that come before us in the Congress, but that he has a very good grasp of what is required to bring vigor to the organizations that he advocates. Let me ask a parochial question. The Forest Service does operate all over our country, even including states that do not have large forests like the midwestern states or my own State of Indiana. Our State was once virtually cleared of trees. Over the course of time, we are not unique, I found, in visiting Vermont one time, that it occurred there, although we think of the verdant forests there as substantial, and they have become that way in southern Indian as we verge upon our neighbor, Kentucky. I am involved on my own farm, a tree farm operation that has 200 acres. We cooperate with the Department of Natural Resources of Indiana, and the State has taken a vigorous role in encouraging the small landowners to plant trees. Why? Because most of the trees available now to the timber industry in the country, or for furniture makers or other users, are in fact privately owned places, and most of them are fairly small. One of the ways of boosting income for our farmers is to use the back 10 that is not used for anything else, and to see with soil samples what might happen. What, in the repertoire of the National Forest Service or the Conservation Service, is there to help persons, tens of thousands of them in my State and surrounding states, who maybe have, as we do, just 200 acres in woodlands and in managed forests? What kinds of services are there available for them, and what kind of encouragement to plant trees, to proceed in this, which is often a multi-generational process? Mr. Rey. The Forest Service, one branch of the Forest Service that's very important to those sorts of programs is the State and Private Branch of the agency that works with state forestry agencies to deliver technical assistance, and in some case financial assistance to forest landowners to encourage sustainable forest management. As I was preparing for this hearing, I asked a question about how much of the state forestry agencies' budget was made up by assistance from our State and Private Forestry Program for the U.S. Forest Service, and I was surprised to learn that probably on the average about a third of the budget of state forestry agencies throughout the 50 states are supported by Federal financial assistance through the State and Private Forestry Program. In some states it's more than half; in other states, who have large forestry organizations, it's less. But those are important programs because the majority of our forest land ownership is in private ownership, not in public ownership, and providing both encouragement, assistance and incentives to private landowners is one of the most important things that the Forest Service does on a day-to-day basis. The Natural Resources Conversation Service also has programs that assist and encourage farmland owners to plant trees, particularly on erodible soils. That program is important because it's actually increasing our forest base. Both of those are very valuable programs that I look forward to working with you to review as we get into the Farm Bill debate this coming summer and fall. Senator Lugar. I look forward to that opportunity also. We are always attempting to think of diversification in behalf of farm income. We often think of alternate uses of corn and other things that we produce, but clearly, the forest side of this is an important supplement of income, and may turn out to be the most profitable part for many private landowners. We look forward to working with you on these projects. I thank you, Mr. Chairman. The Chairman. Thank you very much, Senator Lugar. Senator Thomas. Senator Thomas. Thank you. Ms. Legg, we do not want to leave you out of this at all. Ms. Legg. That's OK, but go---- [Laughter.] Senator Thomas. What would you think would be currently-- rural electric has been in place for a good long time, and so what do you think would be the greatest challenge now, current challenge to the Rural Utilities? Ms. Legg. I think the greatest challenge, Senator, to the Rural Utilities is to provide the service to all the constituencies in rural communities at an affordable rate and in an efficient manner. I think with the total energy issue today we have to ensure that distribution, from the generation facilities, is available to our folks who live in our rural communities. I think it's service and service in an affordable way. I think it's still around 15 percent higher at this point, even in my state, to get electricity out to our rural communities, and we're one of the lower states in terms of cost, so I think that will be an issue that we'll have to look at in context. I think working with Vice President Cheney and Secretary Veneman, who serves on that special task force to look at energy, to ensure our rural communities have service. If confirmed, I would look forward to working with them. Senator Thomas. We have been, just came from a hearing on electricity over in Energy, and do you see, particularly the G&Ts being involved with the regular movement along with the other utilities pretty much the same, so that they can move their power, or do you see them separate from the investor- owned utility? Ms. Legg. Senator, I think it's going to take all entities working collaboratively to--again, to bring that service to our rural communities. I would look forward to discussions with all folks, all the G&Ts, the co-ops, everyone, to be involved in that discussion, as to how we best accomplish our goal. Senator Thomas. Last year the Congress passed a bill that establishes a guaranteed program for satellite TV delivery. Are you familiar with that program? Ms. Legg. I've had a quick conversation about that. Senator Thomas. I guess I hope that you will be able to move in and do something about having the regulations written and so on, so when that is funded, that this will be an opportunity to provide access to rural folks, the same kind of TV that others have. Ms. Legg. Senator, I can assure you that if I am confirmed, that we will be in discussion with your staff about those issues, and the promulgation of the regulations, as well as the other entities at USDA about that. Senator Thomas. Local TV is something of a problem. Ms. Legg. Absolutely. Senator Thomas. Mr. Rey, there has been some concern that because of the rules and regulations that go out in the non- point source water, so on, that NRCS has become sort of a regulatory agency as opposed to a technical assistant. How do you react to that? Mr. Rey. The--I'm not sure, Senator, that NRCS has been perceived as a regulatory agency so much as some of the new rules involving non-point sources imposed additional regulations on farm landowners that they have trouble dealing with. Today, as EPA struggles at looking with the total maximum daily load rules and the concentrated animal feeding operation rules, the administration has formed an interagency task group between EPA and NRCS, to work together on making those rules effective in improving water quality, but effective as well in securing the cooperation of farmers and feedlot owners to accomplish those objectives. I had the opportunity to sit in briefly on one of the meetings of the two agencies yesterday, and I was struck by how well they were working together to accomplish that end. What I would commit to you, Senator, if I'm confirmed, is to increase NRCS's involvement in those regulations to make sure, one, that they're effective in improving water quality, but, two, that they retain NRCS's cooperative relationship with farm landowners because I think we have made our greatest strides in controlling non-point source pollution in the past, when that relationship has worked to the advantage of both the environment and farm landowners. Senator Thomas. Nobody argues, of course, with the idea of clean water and so on, but I think both in the case of some of the Forest Service questions and certainly these questions, it seems like perhaps there needs to be more involvement of local people and more involvement of state agencies, more involvement of the state conservation associations and so on. Would you find that to be something you would like to promote? Mr. Rey. If I am confirmed, I will work to make NRCS an active partner in those programs, working through the state conservation organizations and the other delivery systems that we have in USDA. Senator Thomas. That is one of the things, as you well know better than I, and the chairman just stepped out, but, you know, there is all kinds of different forests, U.S. forests around, and they are pretty unique, and each one of them has a forest plan that has to be done every certain period of years. Yet some of the rules have been put out here from Washington without much attention to the individualism or the uniqueness of the various forests, which those studies should be able to put forth. I hope that we do not get the one-fits-all kinds of things on all these issues. I know that you have been involved in that. Thank you. The Chairman. Thank you very much, Senator Thomas. Senator Crapo. Senator Crapo. Thank you very much. Ms. Legg, I think you are going to miss most of the questions today, and you can take that as a fortunate thing, I think. [Laughter.] Ms. Legg. I do. Thank you, Senator. Senator Crapo. Idaho has about 20 million acres of National Forest land that I want to talk to Mr. Rey about here for a minute. Mr. Rey, the Forest Service recently entered into an interagency agreement with the National Marine Fisheries Service to focus on the need to get consultations done on the forests, particularly those that are most at high risk with regard to catastrophic wildfire and present a threat to the communities in the West. Are you aware of that agreement? Mr. Rey. I am, Senator. Senator Crapo. In my State alone, the National Marine Fisheries Service has opened a new office in Grangeville and in Salmon, and I think in total there are at least 31 new National Marine Fisheries Service biologists that have been located in western communities in order to get consultations done on forests that are at the highest risk for wildfire. Do you believe, if confirmed, that you have the authority that you need to make sure that these consultations are completed in a timely manner and that these on-the-ground projects can proceed? Mr. Rey. Thank you, Senator. I believe that authority exists, and I'm encouraged by the quick action of the National Marine Fisheries Service to hire those biologists. Last summer, during and immediately after the fire season, when the committee that I staffed held hearings on both the fires and fire recovery, one of the things that the Forest Service, and for that matter, the Interior Department explained to us, is that one of the impediments in moving forest rehabilitation projects forward was a lack of resources at the Fish and Wildlife Service and the National Marine Fisheries Service to engage in Endangered Species Act Section 7 consultations to assure that those projects didn't result in jeopardy to a threatened endangered species. It wasn't a case where the Fish and Wildlife Service or the National Marine Fisheries Service were being uncooperative; they simply didn't have enough people to get the job done. One of the things that the Appropriations Committee did, as a result of that oversight testimony, was include funding in last year's Interior and Related Agencies Appropriations Act to bring those people on board. We subsequently found that we needed to provide additional statutory authority to transfer the money from the Forest Service to the National Marine Fisheries Service, and your committee, the Environment and Public Works Committee, promptly passed enabling legislation to get that done this past spring. Now those National Marine Fisheries Service biologists are on the ground. I am very encouraged that they are actually being placed in places like Grangeville and Salmon, close to the resource so they can observe what's happening firsthand. My commitment to you is that, if I'm confirmed, I'll make sure that the Forest Service and they are working hand-in-glove to get this work done as quickly as possible. Senator Crapo. Thank you. I appreciate that. It is always kind of an awkward dilemma for those of us who want to see this work move ahead rapidly to recognize that we have to have a lot more Federal regulators moved into our State in order to get it done, but we recognize what is going on. We do hope that, with your leadership and that of others in the administration, that we can get these consultations completed very rapidly. I would ask you, if confirmed, if you would keep my office apprised of any obstacles that you may run into that would prevent these consultations and projects from moving ahead expeditiously. Mr. Rey. I'm happy to do so. Senator Crapo. Thank you. I just have one other area of inquiry right now, and that is, as I am sure you know, because we have worked together very closely in the past, I have been pretty critical of the way that the Forest Service allocates its funding. One of the problems that we often face out in our forests in the West, which, frankly, you just alluded to, in terms of the lack of personnel there to get the job done that we need done in terms of proper management of the forests, and this includes everything from getting the biologists there for the consultations to making sure that the camp grounds are kept up, that there is the adequate enforcement of the need for management on the forest grounds or any number of things. What we often see is that critical and needed activities in our forests are not undertaken by the Forest Service, and the explanation that we get is that they do not have enough money in their budget to get it done. In fact, we are often told that their budgets are shrinking, rather than growing, with the needs that they face. When I am told that, I come back here scratching my head because I remember voting on the appropriations for the Agency, and I remember the appropriations going up, not down. I have inquired a number of times about this and have found out that, in fact, the appropriations have annually, since I have been in Congress, gone up, not done. Almost annually the amount of money allocated to the local forests has gone down, not up. I want to know where that money is going. What I have found out so far is that it is going to more heavily populated urban areas or to the central bureaucracy of the Forest Service. I think that is wrong. First of all, I would like to have your perspective on that, and I hope that we can address this discrepancy in the future, as we work together, if you are confirmed. Mr. Rey. Thank you, Senator. The data I've seen in budget allocation over the last several cycles have shown, as you indicated, that more funds are be--were being retained longer in the Washington office, as opposed to being distributed to the field. In his first appearance before the Energy Committee, at a hearing which I staffed, the new chief of the Forest Service, Dale Bosworth, stated, without prodding, that one of his first objectives was going to be to reverse that trend and to get more money out of the Washington office and into the field faster, and if I'm confirmed, I'll be helping him in making sure that we accomplish that goal. Senator Crapo. I appreciate that. In fact, Mr. Bosworth was one of those regional forest managers who was getting short shrifted on the budget when he was out in the field. I am glad to see him now back in headquarters, if you will, because I know that he understands the problem, and I appreciate his comments, as well as your commitment. I have no further questions at this point. Although, Mr. Chairman, I did have a brief statement that I did not give at the beginning and would ask unanimous consent that it could be made a part of the record. The Chairman. Without objection, absolutely, Mr. Crapo. Senator Crapo. Thank you. The Chairman. Thank you very much. Senator Allard. Senator Allard. Mr. Chairman, I guess you are getting a pretty heavy dose of Western issues here, as it applies to the forest. [Laughter.] Senator Allard. I am going to join the chorus. The Chairman. That is all right. You get a heavy dose of Midwestern issues all the time. [Laughter.] Senator Allard. We have got a little balance on this committee, I see. The Chairman. That is right. [Laughter.] Senator Allard. But, you know, the State of Colorado finds itself frequently entwined in forest and water issues. I share the concerns of my colleagues, certainly, from Idaho and Wyoming, about the way the Forest has disregarded the State's role on water issues and has, at times, stepped in and claimed in water rights, that the Federal Government has supremacy. In water in Western areas, is frankly a property right. When the government drops in and says, ``We want to take first priority in an allocation in a river,'' that means that all of the other people who have purchased water for their farm or ranch, or a city who is taking care of their municipal needs, find themselves moving down the ladder. That type of policy concerns me, and I'm apt to get in touch with you whenever the issue of Federal Reserve water rights comes up. I would like to hear some of your thoughts on a Federal Reserve water right. Mr. Rey. Before you came in, Senator Allard, I recounted a quote attributed to Mark Twain at the end of the last century, wherein he said that, in the West, whiskey is for drinking, but water is for fighting about. As I've observed the situation in Colorado, I think my conclusion is we probably need more whiskey to work through those problems. [Laughter.] Mr. Rey. The Supreme Court I think has made it abundantly clear that the Federal Government must assert any reserved water rights that it wishes to maintain through State court-- State Water Court proceedings. Over the last several years, we've tried to do that, I think. Where the Forest Service, in my judgment, has been most successful in identifying and securing in-stream flows necessary for fish and wildlife populations is where it has done that through a collaborative process with the States, through State proceedings; for instance, using the 1973 Colorado process for that purpose. Where the Forest Service has tried to assert water rights that were ambiguous, without that local collaboration, they have been less successful, except in instances where a threatened or endangered species or a wild and scenic river have been involved. Generally speaking, though, it would be my preference, if confirmed, to, in as many cases as possible, take the former course and to work collaboratively through State proceedings with the other water users to try to secure a mutually acceptable outcome for all interests. Senator Allard. Well, I appreciate your answer in that, because all States are a little bit different. Although most Western States have the doctrine of prior appropriation that originated in Colorado and was eventually adopted by many of the other Western States. But the Eastern States have a different type of water law, and I am glad to hear that you are willing to work with Western States in that. That gives them some ability, at least, to communicate about how the system is going to react with each of the individual State water laws and court systems that have been set up within the States. I think those of us in the West, in Colorado, Wyoming, and Idaho would appreciate that approach. I cannot emphasize how important it is, whether we are talking about forest management issues, water issues or any kind of natural resource issue, that there be some mechanism for local input. I would like to hear any thoughts that you may have on how we might allow more local input from people that are impacted through forest decisions or water decisions or any natural resource decisions in these States and how we might enhance that. If you have any thoughts on that, I would like to hear what those might be. Mr. Rey. I think one opportunity that we have right now that is exceptionally important that the Forest Service is well underway in implementing are the local advisory committees that were established by a piece of legislation that Senator Craig referred to earlier today, the Secure Rural Schools and County Payments Act. I think those local advisory committees are going to go a long way to providing a forum for collaboration with local people, of a variety of views, to work together in securing forest management decisions that are reflective of national environmental priorities and national environmental requirements, but nevertheless sensitive to local site-specific conditions and local needs. So I'm very optimistic that, as those committees are up and running, they will provide a local forum for people to work out their differences, and that in doing so, the differences that are presented to you, the Congress, here in Washington, DC, are going to be vetted to the point that they're a little bit less contentious and maybe easier to resolve. Senator Allard. One other area that I want to bring up and, again it has to do with water, and has attempted to be implemented by the Forest Service in Colorado. Western States continue to share this concern because of the precedent it begins to set. This is the issue of bypass flows. We have a ditch that perhaps was put in place even before it was designated as a national forest. The Forest comes in every so often and allows a renewed permit to allow the ditch. In some instances they said, ``Well, we will renew your permit, but we want a certain percentage of the water out of that ditch.'' I have a real concern about that. I would be more comfortable if they would just ask for a flat fee because the value of water, as it increases, almost creates a windfall for the Federal Government. Over time, it also means that a farmer or rancher that has relied on that ditch for various reasons is going to eventually dedicate all of that water over to the Federal Government. It is the issue of this becoming a takings that concerns me. I do not expect you to be up on all of those issues on those things because they do get a little bit complicated, but I think that your fundamental thoughts about local control and working with the States on water should help resolve those conflicts. Thank you. Mr. Rey. Thank you. Senator Allard. Mr. Chairman, thank you. The Chairman. Thank you very much, Senator Allard. Ms. Legg, I noted, with interest, on your statement that you said, ``Utilities have been and will continue to be the conduit for development, even in the Information Age, which is of course the newest infrastructure challenge to rural communities.'' You mentioned that in passing there. Interesting reading is the history of the development of the Rural Electrification Act and the debate that took place in the Senate during that time. If you have nothing better to do with your time some evening, I recommend it. Ms. Legg. Yes. The Chairman. It is an interesting read about how there were Senators who said that if people want to live in rural areas that is their right to do so, but we do not have to provide electricity to them because it costs too much money, it is cost-ineffective and to run all of those lines out there for miles to serve one farmer, does not make any sense. This is a debate that took place on the Senate floor. Well, we persevered and it got through. Of course it was not just that line to that farmer. It was the lines that went out to our rural communities that enabled us to build colleges, and community colleges, and schools, and manufacturing came to our small towns and communities, so the whole thing blossomed because of that. Having said that, it seems to me that, getting into the 21st century, we still have utilities that are needed in our rural areas. You touched on that, and that is the whole area of broad-band access. If we do not have broad-band access to our small towns and communities, that means they are on the other side of that digital divide. What mail order company or what firm that might employ a few people to run a phone service or clearinghouse or something is going to locate in a small community if they do not have access, and rapid access, through broad-band technology? We know right now that a lot of farmers are getting their income off-farm. I stated this fact the other day. I think it is true in my State--I do not know about Indiana--but I think only 1 of 15 who live in rural Iowa farm. The rest live in small towns and communities, and even those who farm are getting off-farm income. I think we have to provide some basics for these people in these communities, and so a lot of people say that your job, your future job, is basically completed in terms of utilities. We have got the wires out there, we have got the lines, and so we do not need anything else. But I would like to have your thoughts on how you would lead the charge towards the new concept of the Rural Utility Services being involved in the utilities of the 21st century, which is Internet service and broad-band access to our small towns and communities. How do you see your job as promoting that aspect and coming to this committee to ask us for our help and our support to give you the necessary wherewithal to carry that out. So how do you see that? Ms. Legg. Senator, I think that's probably the most exciting aspect of RUS at this point in time. It is a new economy, it is knowledge base, it is the Information Age. We cannot deny that. We cannot run from that. Now, technology will not--it's not the silver bullet. It will not cure all of our rural communities' ills, but it has to be available in order for us to be at least competitive in the global economy, whether it's our agricultural products, whether it's bringing educational opportunities, whether it is to consult with a medical professional, many States away. It is absolutely critical, in terms of economic development, that our rural communities, and that our children in those communities, can interact with the world. It's not just about education, it's about pure economic development. It's about bottom-line dollars and cents, and the name of the game is speed. How fast can you get voice, data and video over that infrastructure? In Kentucky, as the Congressman alluded to Silicon Holler, we call it at the Center rising above the mountains. It's not the road--it's not the farm-to- market road, but it is the way that we do business today, and so we call it the information highway, and of course all of the on ramps and off ramps. But it's all about speed. It's all about economic development. As far as I'm concerned, Senator, I would be eager to work with your folks here on the Hill, obviously, the other entities throughout the Federal Government and our local communities to help them understand, No. 1, that rural communities need it, how to use it, and how to make it work for our communities to grow. Thank you. The Chairman. I appreciate that. Going from that back to the old system. I do not know how you did in Kentucky, but we started a number of years ago building rural water systems in Iowa. Maybe you have them in your area too. They have been great, but we have a long way to go. There are still many, many communities in my State and all over the country that need clean, safe drinking water. In many cases, environmental regulations require the upgrading of rural water systems, but the people in those communities do not have the financial wherewithal to do that. The EPA comes in and says, ``You have got to meet these standards.'' The people say, ``Well, we would like to meet those standards,'' but they just do not have the tax base and the resources to do that. They are very limited. I am asking for any thoughts that you might have on what we can do to help our communities with two things: to expand the rural water systems beyond what we have right now, and, again, thinking about it in terms of the lines, the old electric lines, and people say, ``Well, it is expensive.'' Well, it is not all that expensive. Second, what can we do to help our small communities upgrade their water systems to meet the new regulations? Ms. Legg. Senator, those are very important issues. As we've been talking about all morning in some form or fashion, it's purely vital to our existence. I know what it's like to be on the county water system. I know what it was like when we first got on the county water system, too. I understand that need very, very much. I also know that it's an economic development issue, as well as a quality of life, and a health issue. What will we do? Obviously, regulations are always more difficult to adhere to in rural communities because of the lack of the tax base and the expense to do so. But I can assure you, if I am confirmed, that I will be working to try to address those issues, and along with the EPA, get that those regulations in place. We will be a loud voice of advocacy for those rural communities so our individuals can have clean drinking water and we can maintain the systems we have already invested in. The Chairman. I appreciate that. I just want you to know that I come from--you say you come from a small town. How big is your hometown? Ms. Legg. Actually, it was about 4,000. That was the county seat, and I lived out in the county. The Chairman. That is a big city. [Laughter.] Ms. Legg. Well, I lived in Knifley. Now, that was just a couple of hundred, at most. The Chairman. My hometown has 150 people. I still live there. I live in the house in which I was born. Very few people can say they actually wake up in the room in which they were born, but I can say that. Ms. Legg. That is true, Senator. The Chairman. But I remember when they came through in the 1970's, and they tested all of the wells and not one well tested fit to drink, not one well in our town, to which my political opponents always said, ``No wonder what is wrong with you, Harkin. Drinking that bad water all your life.'' [Laughter.] The Chairman. But we got an extension of a water line over, through Rural Water, and we got an extension in. What a blessing it was for people. Of course, now we have a sewer system. Ms. Legg. Big time. The Chairman. Big time, now. Of course, that caused some problems, but I am not going to go into that. But I also have firsthand experience of what it means to get good water in our hometown. I would look forward to working with you on that. I have some more questions for Mr. Rey, but I will yield to you, and now we will go around again here. Senator Lugar. Senator Lugar. Thank you very much, Mr. Chairman. Ms. Legg, following through on Senator Harkin's questions about the Internet and the broad-band, one of the problems that is highlighted by most of the financial press is that many of the telecommunications companies in the private sector have extended their lines, their facilities to a point that they are nearly in bankruptcy. In other words, the bond issues, the borrowings that have been required to lay out all of this have been sizable, and although the market may respond in due course, people may come on line, small towns may use it, there seems to be a time-lag factor here. I am curious, as you take a look at the management of what amounts to a very, very large utility that you are managing on behalf of the taxpayers, what are the policies of Rural Utility Services in terms of borrowing, extension of services and what have you? We had a pretty broad debate a couple of years ago about the need to have an Internet that united all of us in America, and especially rural America in remote areas, and, generally, Congress subscribes to that idealism. But, finally, you and your cohorts are left, as you say, where the rubber hits the road, to actually bring this into actuality, to raise the funds or to take the risks, in some cases, that are required. Have you given this thought and, if so, what kind of policies do you find there now and what kind of borrowing authority or other recommendations are you likely to make as you come to the Congress for budget authority? Ms. Legg. Senator, I have given some thought in terms of, and have been involved in trying, if you will, to create the demand from that private sector, what forces or not just forces, but entices the providers to provide service there. It is sort of a ``chicken or egg'' situation, which comes first? Senator Lugar. In other words, the public utility encourages the private people to make the investment so that the public is not at risk in these borrowings and what have you. Ms. Legg. Right. I think it's always a juggle of that public/private, if you will, concern and demand. To tell you I would be able to say today that I have some policy recommendations, I simply would like to ask if I could get your input on that in the future and also become more involved with the policy development folks at USDA. I've been hoping that this confirmation hearing would give me an opportunity to do that and would look forward to working with you. Senator Lugar. Very well. Let me ask to what extent now in the history of our country is everyone connected, at least in terms of basic electrical services? Is everybody online there? Ms. Legg. Electric just from the electricity demand? Senator Lugar. Yes. Let us take that for starters. Ms. Legg. Electricity demand is much, as you would guess, is much more available than the Internet connectivity. Senator Lugar. Right. Ms. Legg. Internet is about 7.3 percent in our rural communities, in terms of that connectivity. It's under 10 percent. In the rural electrification, I don't have an exact number to give you, but my perception from working with our folks is that it's more of a matter of looking at the last mile, if you will, of that connectivity. It goes back to Senator Harkin's statement about if they live out that far, then they need to just run their own electric out there or their own line. We hear those discussions. I've been a part of those discussions. It's not just 65 years ago with the beginning of the REA. There are still folks who have that discussion today. Senator Lugar. Right now, yes. Ms. Legg. I think what we'll be looking at is, again, those that have been left out, those last-mile connections are what I would like to get involved in as we pursue this issue. Senator Lugar. I appreciate that because I, you know, clearly the excitement now is the Internet. As you say, you've got about 7-percent-plus online there, but the old debate of 60 years ago is not really over with regard to basic electric services. Ms. Legg. That's right. Senator Lugar. Beyond that, other services that are intermediary to that, and that takes some doing. It has been a debate with the telephone people for quite a while as to that last phone. Ms. Legg. That's right. Senator Lugar. What really the obligation is, either private or public, in that respect. As you get into the position think, in terms of your further testimony before this committee or others, as to what you find, so that we have some parameters for what is still out there, what sort of challenge, and what the expenses are, and what the public policy recommendations that you and others have ought to be. Ms. Legg. I look forward to that discussion. You can't run those computers unless you have electricity, and you need a drink of water throughout the day if you're going to sit at that computer all day. I look forward to that, Senator. Senator Lugar. Thank you very much. Thank you, Mr. Chairman. The Chairman. Thank you, Senator. Senator Crapo. Senator Crapo. I do not have any more questions at this point. The Chairman. Thank you. I just have a couple. Mr. Rey, much of your background and the focus here has been on forest issues, but you have another important aspect that will come under your jurisdiction that I'm maybe more interested in called the National Resources Conservation Service. I just want to know what, in your background, might demonstrate that you can lead the NRCS, and how it works, and what its programs are. Can you just briefly give me some of your thoughts on the NRCS, and what its charges are, and how you might lead that agency. Mr. Rey. Certainly. One of the reasons I was enthusiastic about taking on this assignment, when the President offered me the opportunity, is that from 1976 through 1984, while I worked for the forest products industry, I was working on nonpoint source pollution issues from agriculture and silvaculture. During that time period, I had the occasion to work alongside the then-Soil Conservation Service in developing and implementing the first nonpoint source pollution control programs developed since--developed as a result of the 1972 and 1977 Clean Water Acts. During that time period, we had to sort out the debate about what the best way to address the water quality problems associated with runoff from rural lands, whether they be forest lands or farmlands, could be done, and I enjoyed the opportunity to work on those first programs. I was enthusiastic when the President offered the opportunity to come back, now 15 years later, to see what kind of progress that's been on those issues. On the one hand, as I began to read and be briefed on them, I was struck by the fact that some of the issues are still with us: wetlands protection, runoff from animal feedlots, et cetera. On the other hand, I was struck, at the same time, by how much progress we'd made, not only through the implementation of the Clean Water Act, but through the very creative and worthwhile programs that were developed through the Farm bills in 1985, 1990, and 1996, in which I didn't participate, but just watched as an observer. One of the exciting challenges that this job will bring to me is to work with you in the development of this new Farm bill and look at the EQIP program, the WRP, the WHIP program, and the FFP to see how we might improve on what we've done since you first put some of those programs into place over the last 15 years, when I dropped out of that debate and went into a different area. Some of the programs I find, as I've reviewed them, are extremely creative. The FFP program, in particular, is one where I'd like to work with the committee, if confirmed, to see if we can improve on that program, both by expanding its reach through the Farm bill provisions, but also looking at creative ways to involve other partners in purchasing easements for farmland protection. I do have some background in these areas. It's not as recent as my work with the Forest Service, but I have worked a lot with the then-SCS, now the NRCS, and look forward to working with them and with you, again, if confirmed. The Chairman. I appreciate that, and again I hope that you will be very diligent and careful in the personnel who run the professional end of the NRCS. They should be professionals, they should have a good professional background, and I would hope that, in no way, would any kind of political considerations be involved, in any way, in the selection of those professionals who need to run the Soil Conservation Service. They should be people with good backgrounds, and there should not be any thought of any political involvement there. Last, I would just say, as you mentioned, we are about to embark on a new farm bill, I hope that the new Farm bill will have as its centerpiece, a new conservation approach. I have been working on one for a number of years now. It just seemed odd to me that we, in the past, in fact, Senator Lugar brought this up the other day, and I am going to try to remember the figures, do you remember those, percentagewise, how much we put into land idling and how much we put into production? Senator Lugar. It is 85/15 now, and it used to be the other way around. The Chairman. Yes. Now we put 85 percent of our conservation money in land idling and only 15 percent in the producing side. Fifteen years ago, in 1985, it was 90/10--90 percent, I think---- Senator Lugar. The other way around. The Chairman. The other way around. While the CRP is a good program, I have supported the CRP, there are some moves now to try to expand it to 45 million acres, and I think that would be devastating, in many ways, for our small towns and communities. It is my idea to focus more of our attention on conservation on working lands. I hope you will take a look at a bill that I introduced with Gordon Smith from Oregon, and I think Representative Thune, is the main sponsor on the House side. It is a bipartisan approach, bicameral. The idea is to begin shifting and focusing funds to help farmers on producing land. We have titled it the Conservation Security Act. I hope you will take a look at that and keep an open mind about working with us on this aspect of the Farm bill. If you have any thoughts on it now or anytime, I would be glad to listen to those, but maybe you have not had a chance to look at it. Mr. Rey. In all honesty, Senator, I haven't really had a chance to look at either your proposal or any of the other ones that are being circulated. The Chairman. Fair enough. Mr. Rey. I know that the Department is working on its own proposal diligently to be able to participate with you in the Farm bill drafting. I would like, at a subsequent time, if confirmed, to visit with you and Senator Lugar and go through these alternatives in more detail. The Chairman. I appreciate that.. Do you have any more questions? We thank you both for being here. We thank you both for your past public service and your future public service. We wish you well. We look forward to working with you in the development of the new Farm bill, which we will be moving on fairly rapidly, and beyond that just to work with you on all of these issues. [The information of Mr. Rey follows:] [The information of Ms. Legg follows:] The Chairman. If there is nothing else to come before the committee, the committee will stand adjourned. Thank you very much. Ms. Legg. Thank you. Mr. Rey. Thank you, Mr. Chairman. 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